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Legends of Bankruptcy: Judge Duberstein

In 1981, a judge was appointed in the Bankruptcy Court in Brooklyn, New York, Conrad B. Duberstein.  When he took the bench he as already 65 years of age and had already been a very successful bankruptcy practitioner for many years.  He turned out to be an exceptional Judge.  He became the Chief Judge in 1984.
 
Numerous practioners have stories about this Legend of Bankruptcy, the late Judge Duberstein.  My name is David J Doyaga Sr, and one of my favorite personal stories about this Legend goes like this:
 
Many years ago, I was representing a man in a Chapter 13 case where he was trying to save his home and what little assets he had remaining; but he had numerous creditors.  Almost all of his creditors were casinos from Atlantic City because; he was a gambler with a lot a gambling debts.  Besides the over $100,000 in debts to the casinos, he had one other creditor.  The other creditor was his neighbor, a Romania woman who worked as a tailor and who unfortunately made a loan to my client of her total life savings: $10,000.
 
My client's Bankruptcy Chapter 13 plan provided for less than 10% payments to all creditors.  That was all he could pay. Under tradition Bankruptcy rules this would mean that every creditor in this case would be receiving a little less than ten cents on a dollar.  So this poor Romania woman, my client's neighbor, would only be getting $1,000 or less under the traditional Chapter 13 rules.  The woman appeared at the hearing on confirmation of the Plan and mentioned to Judge Duberstein that her entire life savings was lost.  She didn't speak English well, but Judge Duberstein was multilingual and he was able to communicate with her in a language which she understood.  As he did often, he began by comforting her. Judge Duberstein  recognized the emotional aspect of a Bankruptcy proceeding and what this woman was going through.
 
Seizing on an idea that came to him on the bench, the wise Judge told me in the open Court: “Doyaga, file a new plan in which there will be two classes of claims.  The first class would include any and all Romanian women who lived in Staten Island.  That Class would receive one hundred cents on a dollar.  The second class would include all of the Atlantic City casinos and they will receive zero cents on a dollar.”   This Plan would have the effect of paying the Romania woman in full.  Judge Duberstein told me be sure that I serve this Plan on all of the Atlantic City casinos and you put in the notice that if Casinos want to come to Brooklyn and object to this Plan their objection would probably be sustained.  Judge Duberstein knew from years of practicing that these casinos could care less if they got only ten cents on a dollar or zero cents on a dollar as it wasn't worth their hiring a lawyer to object.
 
The moral of the story was that the Romania woman got paid in full, the casinos got their due process and notice with an opportunity to be heard and my client got his discharge and saved his home and property.  Was that the result of a strict interpretation of the law, no.  But this is just one example of the creativity and humanity of Judge Duberstein, a legend in Bankruptcy. 
 

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