Mandelbrot Vows To Appeal U.S. Bankruptcy Court Judge Sheri Bluebond in Thorpe V. Mandelbrot

    SAN FRANCISCO, CA, April 18, 2014 /24-7PressRelease/ -- Novato, California, attorney Michael Mandelbrot of the Mandelbrot law firm has vowed to appeal the adverse orders of the bankruptcy judge, the Hon. Sheri Bluebond, entered on March 27, 2014. A Notice of Appeal and Motion to Stay Execution of the Order will be filed imminently. Judge Bluebond's orders currently prevent Mandelbrot and his law firm from filing asbestos injury compensation claims with the Thorpe Insulation, J.T. Thorpe, Western Asbestos, and soon-to-be-created Plant Insulation asbestos compensation injury trusts. Mandelbrot has made arrangements to have his office's asbestos injury clients represented by other, suitable asbestos counsel during the pendency of the appeal.

The dispute began with the filing of two mirror complaints for declaratory and equitable relief, one filed by the Western Asbestos Trust in the United States Bankruptcy Court, Northern District of California, and the other filed by the Thorpe Insulation and J.T. Thorpe trusts in the United States Bankruptcy Court, Central District of California.

The three trusts sought judicial declarations in two separate U.S. Bankruptcy Courts approving trust audit findings that Mandelbrot was an "unreliable" filer of asbestos injury compensation claims and other relief. The Hon. Thomas E. Carlson, in Northern California, dismissed the Western Asbestos trust case, as Judge Carlson viewed the case as unripe and failing to present a justiciable controversy.

To the surprise of Mandelbrot and his lawyers, the Hon. Sheri Bluebond, hearing an identical case in Southern California, brought by the Thorpe Insulation and J.T. Thorpe trusts, viewed the dispute quite differently. According to Mandelbrot, in the tentative ruling issued just prior to trial, Judge Bluebond had made every finding in favor of the trusts and against Mandelbrot. From Mandelbrot's perspective, Judge Bluebond further sought to impose relief for the trusts that exceeded even that than was alleged in their complaint.

The case settled on terms that Mandelbrot questioned were reasonable, and shortly thereafter, Mandelbrot terminated his relationship with his bankruptcy attorney, formally sought to rescind the settlement, and then post settlement motions were brought by the Thorpe Insulation and J.T. Thorpe trusts.

On March 27, 2014, Judge Bluebond granted the motions to enforce the settlement and issued orders that prevent Michael Mandelbrot and the Mandelbrot Law Firm from filing asbestos injury compensation claims with the Thorpe Insulation, J.T. Thorpe, Western Asbestos, and soon-to-be created Plant Insulation asbestos compensation injury trusts.

In opposing the motion to enforce, Mandelbrot urged that Judge Bluebond had exceeded her jurisdiction in the first instance by issuing orders that related to the Western Trust and yet-to-exist Plant Insulation Trust, where Judge Carlson in Northern California had jurisdiction over those trusts. Mandelbrot argued that Judge Bluebond's orders violated established rules that related to bankruptcy court jurisdiction. Further, Mandelbrot urged that the agreement was legally void and unethical, as it terms violated California Business and Professions Code Sec. 16600 and the California Rules of Professional Conduct, Rule 1-500(a). Mandelbrot also advanced arguments relating to the settlement being the product of fraud, duress and unconscionable conduct.

Mandelbrot submitted deposition testimony, federal filings by the trusts, and an Ohio State Court Order, that Mandelbrot urged had demonstrated self-dealing and other misconduct on the part of the trusts' lawyers and members of the advisory committee. Mandelbrot argued that the impetus for the cases against him were, substance over form, a means by other asbestos plaintiffs' attorneys of eliminating competition in the filing of asbestos injury claims and as a means of retribution for whistle blowing on the part of Mandelbrot that the trusts were engaged in self-dealing and conflicts of interest. A Notice of Appeal and Motion to Stay Execution of the Order will be filed imminently.

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