Shaoxing City etc. Products v. Keehn & Associates

FACTS AND PROCEDURAL HISTORY

An arbitrator determined that plaintiffs Shaoxing City Maolong Wuzhong Down Products, Ltd. (Shaoxing) and Shui Yan Cheng‟s (Cheng) (collectively, plaintiffs) were entitled to a total of $5.35 million from Aeolus Down, Inc. (Aeolus), Wei Xu, and Wei Dong (collectively, debtors). After the arbitrator issued its tentative ruling but before plaintiffs obtained a judgment confirming the arbitration award, Aeolus entered into a security agreement with Zhejiang Hengdi Bedding Co., Ltd. And Zhejiang Liuqiao Feather Co., Ltd. (collectively, Zhejiang), and Zhejiang filed a blanket lien attaching to all of Aeolus‟s assets. Soon after plaintiffs obtained the judgment, debtors filed for bankruptcy. Plaintiffs hired defendants Keehn & Associates and L. Scott Keehn (collectively, Keehn) as counsel in order to obtain discovery and challenge Zhejiang‟s lien as a fraudulent transfer. Pursuant to a stipulation of the parties, the bankruptcy court ordered that all discovery and any challenges pertaining to Zhejiang‟s lien be filed by an “Investigation Termination Date” of October 7, 2009. The deadline came and went without Keehn completing its discovery or filing any…