After years of effort, the Eleanor R. Cristol and Judge A. Jay Cristol Bankruptcy Pro Bono Assistance Clinic recently successfully completed the longest-pending case in the clinic's history. Since 2010, students of the clinic have lent their time and expertise to assist a client in his effort to hold on to his family's home in Homestead, Florida.
The clinic offers pro bono legal services to low-income individuals dealing with bankruptcy. The Bankruptcy Bar Association of the Southern District of Florida established the clinic.
In the beginning, the clinic pursued a Chapter 11 restructuring plan as it would let the client discharge their debt over time. More importantly, the plan would allow the client to keep the home for his family throughout the entire process.
Unfortunately, the client's untimely death occurred before he could witness the end of the process. Work naturally shifted toward ensuring the client's property would stay within the family.
"I feel so honored to have had the opportunity to work on this case," said Nicole McLemore, J.D. '19, and law clerk to Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern District of Florida. "My clinic class was involved in the Chapter 11 filing stage, so I was able to meet our client in person before he passed away. Helping him while I was in law school and seeing the difference our efforts made for the family was particularly rewarding. It was one of the highlights of law school for me and an experience I will never forget."
The clinic's plan was to structure a settlement involving the sale of the home from the father's estate to the family's eldest son. At the start of the case, the client's son was just a young child. By the time the plan was finally negotiated, he was a fully employed adult capable of handling the financial obligations on the home. At the end of the mediation, the young man broke down into tears, uttering, "Oh my God, I just saved my daddy's home!" The family's legal saga had almost reached its conclusion. However, this plan's implementation was not without two significant obstacles.
The first obstacle was getting the estate's creditors to agree to the plan. In discussions with the father's estate creditors, the clinic negotiated a private sale of the home to the son, with a lien and mortgage of $159,500.00 payable over 30 years at a well-established Till interest rate of 5.25%. (The Till rate, or trustee's rate, is a presumptive interest rate used in Chapter 13 cases paying off secured debts over the life of the Chapter 13 plan.)
The second obstacle was receiving court approval for the negotiated settlement and the sale therein.
Third-year clinic students Andrew Graykowski and Lucas Dawson sought this court approval before Chief Judge Isicoff in the United States Bankruptcy Court for the Southern District of Florida at a hearing scheduled for September 2021.
In September 2021, the students argued that the negotiated settlement was fair, reasonable, and adequate under well-established factors outlined in the Justice Oaks decision.
Moreover, they argued that the home sale was in the best interest of the bankruptcy estate. Approving the free and clear sale of the home from the father's estate to the son would relieve the father's estate of continuing exposure to liability and loss of value. Additionally, the sale would provide the father's estate with proceeds to pay a portion of the claims of its creditors. The argument was successful, and both the sale and settlement received approval.
"Nobody wants to lose their home, especially when, as in this case, there is such a deeply personal value attached," said Dawson. "I am glad we were able to go into court and achieve a result that would let the family could keep the home. Getting to see a decade's worth of frustration, anxiety, and worry instantly replaced by smiles and tears of joy was an experience I will treasure for the rest of my career."
With this approval, the clinic succeeded in accomplishing the client's goal of keeping the home for the family and allowing a son to continue preserving a monument to his father's legacy.
"It was an incredibly fascinating experience to come in as a law student and work on a case with such history behind it," said Graykowski. "Handling the unexpected while helping a client accomplish their goals is a significant part of the legal profession, and that notion is perfectly encapsulated within this case."
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