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Bankruptcy Law Blog

Monday, April 30, 2018

Rosa Parks’ Lawyer Might Be Committing Bankruptcy Fraud

We’ve talked before about bankruptcy fraud, and how the payoff is just not worth the potential punishment in the past, but we thought it was time to do so again since news about former Alabama resident Rosa Parks’ attorney is bringing this issue back into the spotlight.

You would think that the lawyer who represented iconic figures like Rosa Parks, Aretha Franklin, and Anita Baker would be a model citizen, but the bankruptcy case filed by attorney Gregory Reed is painting a different picture of his character.

According to news reports, after Reed filed for bankruptcy in 2014, the bankruptcy trustee assigned to oversee his case began to search for assets that could be sold to pay off his debts. Reed was apparently not as forthcoming as the courts would have liked, so an order was issued that allowed the trustee to search his home.

Inside Reed’s 15-room, Tudor-style home in a swanky Detroit neighborhood, the trustee found original artwork, valuable artifacts, antiques, autographed books, a baby grand piano, and museum display items. In the garage were six large, wooden shipping crates sent to Reed from the DuSable Museum of African American History in Chicago. The crates contained framed museum exhibits, autographs from The Four Tops and other groups, gold records from Motown artists, original sheet music from The Temptations, and the Jackson 5’s first contract with Steeltown Records.

Reed claimed most of the items belonged to a nonprofit he created called, Keeper of the Word Foundation, whose mission is buying and preserving historical documents. It is possible that Reed is telling the truth, but the court thinks Reed used the nonprofit as a personal piggy bank and a way to hide assets from creditors.

Several items documented during the trustee’s house search which were once owned by Parks, Franklin, and civil rights icons like Booker T. Washington disappeared from Reed’s possession as his case progressed. Late last year, there was talk that Reed could be jailed if the items didn’t turn up, or if they had been sold, the profits properly disclosed. Reed then turned a few missing items over to the court, but there are still a good number that are not accounted for.

This case is an interesting one to watch because the assets involved are so culturally significant. But it is also a good reminder that committing bankruptcy fraud is not a good idea. Whether Reed has done something wrong or not, this case shows just how seriously the courts are about tracking down abuse of the system. If you aren’t open and honest about your assets, the courts can order your property searched. If you are caught doing something shady, you can wind up in jail.

When it comes to bankruptcy fraud, the juice is just not worth the squeeze. Don’t listen to the people who claim their cousin’s friend’s aunt got away with charging a bunch of stuff on her credit cards, filed for bankruptcy, and never paid a dime. Many more people get caught than get away with abusing the system. And people who get caught pay a hefty price.

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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”