Well-Renowned Investigative Abilities

At Togut, Segal & Segal LLP, attorney Albert Togut’s investigatory skills are nationally recognized. Mr. Togut was appointed as the Chapter 11 examiner of David Malina, a well-known New York City retail operator, when fraud allegations stalled restructuring efforts and threatened asset values. Within one month, Mr. Togut filed a comprehensive examiner’s report that disclosed insider fraudulent conveyances and improper claims of exemption. Mr. Togut’s report led to the appointment of a Chapter 7 trustee who used the examiner’s report to recover assets for creditors when a recovery was not otherwise possible.

In a recent single asset real estate case before the now-retired Judge Shelly Chapman, Mr. Togut served as trustee and formed an opinion that the debtor’s attorney had done something very wrong, although the trustee did not know exactly what it was. But he had a gut feeling. His 40 years of trustee work at the time told him to investigate. Mr. Togut immediately obtained a Rule 2004 order to investigate all the financial dealings with the debtor, including the attorney’s Interest on Lawyer Account (IOLA) and estate account records as well as the debtor’s privileged communications. The attorney put up a fierce fight, appealing almost every ruling made by Judge Chapman, commencing his own Chapter 13 case in a state in which he had no residence, and moving to terminate the trustee in the case. Despite this resistance, the trustee continued his investigation and eventually obtained the banking records, thereby discovering that the attorney was misappropriating estate funds. Mr. Togut brought his findings to the attention of the Department of Justice, and the United States Trustee Program conducted its own investigation. It was found that this attorney misappropriated funds of several estates, which led to his indictment and New York state and federal convictions, earning him consecutive terms in the federal prison system and state prison system. Clifford H. White, the national director of the United States Trustee Program at the time, singled Mr. Togut out for his exemplary work in ferreting out fraud in the bankruptcy system.

Other examples of our investigative work include:

96 Wythe Acquisition LLC (The Williamsburg Hotel)

As counsel to the court-appointed Chapter 11 trustee for the debtor, the Togut Firm investigated extensive potential claims and causes of action against the debtor’s insiders, former management company, and other third parties and is pursuing litigation as counsel to the liquidation trust for the benefit of creditors.

Kossoff PLLC

Counsel to Chapter 7 trustee for Kossoff PLLC, a real estate law firm that was forced into an involuntary Chapter 7 bankruptcy proceeding after the firm and its founder were named in several lawsuits alleging fraud and misappropriation of millions of dollars of client escrow funds. Among other things, the case involves the alleged disappearance of Mitchell Kossoff, the firm’s founder and a high profile real estate lawyer who had represented many of Manhattan’s largest landlords. The Togut Firm is assisting the chapter 7 trustee with identifying, locating, and recovering assets, reconciling claims and liabilities, and making distributions to creditors.

McClatchy Newspapers

Co-counsel to the debtors. In connection with a global mediation for a transaction to reorganize the company, the Togut Firm conducted an investigation of the security interests asserted against the debtors in connection with a series of comprehensive refinancing transactions as well as the claims and causes of action potentially assertable by the debtors’ estates against the secured creditors and senior management under Chapter 5 of the Bankruptcy Code.

Delphi Corp.

Co-counsel to the debtors. Obtained a Bankruptcy Rule 2004 order and conducted an investigation of various investors in the debtors’ plan. The facts uncovered by the Togut Firm formed the basis of the debtors’ adversary proceedings against certain investors, and the debtors’ recoveries in that adversary proceeding substantially aided confirmation of the debtors’ plan of reorganization.

Relativity Media

Counsel to the Official Committee of Unsecured Creditors. Conducted an investigation of the claims and security interests asserted against the debtors as well as the claims and causes of action potentially assertable by the debtors’ estates under Chapter 5 of the Bankruptcy Code. Obtained a highly favorable settlement for the debtors’ estates, which included a significant portion of secured claims being subordinated for the benefit of general unsecured creditors.

Trident Holding Company, LLC

Co-counsel to the debtors. The Togut Firm led an investigation by the debtors’ independent director into potential estate claims and causes of action that the debtors may possess under Chapter 5 of the Bankruptcy Code and whether any such claims were likely to pose issues with respect to the approval of the proposed releases by the debtors provided for under the plan.

199 East 7th Street LLC

Counsel to Mr. Togut in his capacity as the Chapter 7 trustee. The Togut Firm conducted an extensive independent investigation that uncovered crimes committed by a debtor’s attorney that spanned years and other cases and had not been uncovered by other trustees.

  • The Togut Firm obtained subpoena power and injunctive relief from the bankruptcy court, enforced subpoenas, reviewed thousands of pages of financial records and pleadings, and worked closely with the United States trustee and the United States attorney.
  • Debtor’s counsel was indicted, convicted, and incarcerated in a federal facility.
  • The investigative work by Mr. Togut of the Togut Firm has been cited frequently by Clifford J. White, the director of the Executive Office of the United States Trustee, including as part of his September 26, 2018, testimony before the United States House of Representatives.

Corporate Resources Services, Inc.

Corporate Resources Services Inc.: Counsel to James S. Feltman, the Chapter 11 trustee. Obtained and enforced an Omnibus Bankruptcy Rule 2004 order authorizing broad subpoena power to assist the trustee with his investigation of potential causes of action concerning a $100 million tax fraud. The Togut Firm commenced and litigated more than one dozen fraudulent transfer actions, which have so far resulted in recoveries of approximately $10 million. The Togut Firm achieved a wide variety of litigation victories in these adversary proceedings, including obtaining orders: striking expert valuation testimony, dismissing counterclaims and affirmative defenses, and denying withdrawal of the reference.