In re Fagel

AMENDED OPINION GRANTING MOTION FOR TURNOVER OF PROPERTY, WITH CONDITIONS

Bruce G. Fagel, a Law Corporation is the debtor in this professional law corporation chapter 11 bankruptcy case. Debtor’s principal Bruce G. Fagel has also filed a chapter 11 case. Both the corporation and the individual filed their chapter 11 cases after they jointly lost a legal malpractice action in Los Angeles County Superior Court. The jury, in a trial presided over by Judge Paul Boland, awarded a judgment for more than $15 million, plus damages of $250,000 for intentional infliction of emotional distress to Ruby Morales and her parents Robert and Denielle Morales. The inability of either debtor to post a bond pending appeal of this judgment led to the filing of the bankruptcy petitions.

In an unrelated action, the debtor law corporation was legal counsel for plaintiff Lauren Young in a medical malpractice case in the Sacramento County Superior Court. Pursuant to a settlement in the Young case, debtor earned a contingency fee of $461,666. After Morales filed a Us pendens in the Young case, the Sacramento County Superior Court ordered that the check for the contingency fee be made payable jointly to…