from the too-bad-he-can't-monetize-the-hate-he's-earned... dept
Everyone behind the failed clown school that was Prenda Law deserves what’s happening to Paul Hansmeier. Unfortunately, it appears Hansmeier is taking the most damage from the fallout of Prenda’s disastrous copyright trolling… or at least he’s the one doing most of his suffering in public.
Of course, it’s his own fault. Rather than get out of the trolling business, Hansmeier doubled down. He swapped porn stars for wheelchairs, pursuing small businesses for Americans with Disabilities Acts violations. Fronting as a public interest, Hansmeier’s “Disabilities Support Alliance” is every bit the serial litigant Prenda was.
Now, it’s falling apart. As is Hansmeier himself. He’s currently facing possible disbarment for his participation in Prenda’s fraudulent behavior. He just lost one of his lawsuits against a Minnesota landlord for bogus ADA violations — one out of more than 100 lawsuits he’s filed against small businesses in the area. If Hansmeier’s asked to cough up legal fees, one wonders where he’ll find the money.
I suppose he might find some cash in the “trust” he claims handles his finances without his direct intervention. (Court filing via Fight Copyright Trolls)
According to the Trust Agreement:
a. the beneficiaries of The Mill Trust are Hansmeier’s parents, siblings, future spouse and any future descendants;
b. The Mill Trust is an irrevocable trust;
c. the trustee, Browne, had the sole discretion, subject to Hansmeier’s right to veto, to distribute the assets of The Mill Trust for the benefit of the beneficiaries; and
d. the Trust Agreement is executed by Hansmeier as “grantor” and Browne as “trustee” on December 28, 2010.
“Browne” is Padraigin Browne, Hansmeier’s wife. Browne has apparently been moving money out of bank accounts and into this trust — supposedly to handle “personal expenses.” Quite obviously, the moves are being made to keep money from being rerouted to pay off judgments from Prenda’s misdeeds and debtors seeking compensation. Hansmeier recently filed for bankruptcy, hoping to shield his assets from being seized/sold to pay Prenda judgments.
So, his cash — sitting in bank accounts where it could be seized — is being moved to his trust. (Hansmeier is also apparently using a Scottrade account and a shell entity [“Alpha Law Firm”] to keep his funds from being seized to pay off ~$400,000 in judgments. The “Monyet” name attached to the Scottrade account is another shell company.)
After Hansmeier had transferred $175,000 into the TCF Bank account held solely in Browne’s name (the “TCF Account”), Browne contacted TCF Bank and made arrangements for a TCF Bank branch to have $150,000 of cash on hand so that Browne could make a $150,000 cash withdrawal. Browne then went to the bank on December 13, 2013 and withdrew $150,000 in cash from the TCF Account.
On February 7, 2014, Hansmeier transferred an additional $70,000 from the Monyet Scottrade Account to the TCF Account.
Browne, after checking with TCF Bank to see what would be an appropriate amount that the bank branch would have “on hand” without making pre-arrangements, began to withdraw additional cash from the bank in $2,000 increments.
In the months of February-March, 2014, Browne withdrew at least $28,000 in cash from the TCF Account. She had also withdrawn $2,000 in cash from the TCF Account in November of 2013.
What Hansmeier refers to as “The Mill Trust” is actually something commonly utilized by small-time drug dealers and the lower rungs of the mob’s organizational chart.
Those cash withdrawals, when added to the $150,000 in cash already hidden at Browne and Hansmeier’s home, resulted in a total of approximately $180,000 in cash hidden in a box at the home shared by Hansmeier and Browne.
The court has been unimpressed with Hansmeier’s behavior so far. The following order was issued before his Cardboard Box In A Closet Trust came to light. (This opinion also provided by Fight Copyright Trolls.)
The debtor further argues that if he succeeded on the merits of the Claim Objections he would have been in a position to confirm a plan that paid 100% to general unsecured creditors, with interest. The deadline for filing claims is April 22, 2016, so there is no way of knowing at this point what the total claims will be in the case. To date a total of $2,493,510.17 in claims have been filed. Of that amount, $1,612,731.94 was the subject of the Claims Objections. Assuming for purposes of this motion only that the Claim Objections were sustained,2 the total claims would be reduced to $880,778.23.3 The debtor offered no evidence that he would have had non-exempt cash to fund an immediate payment of claims in full at the time of the conversion. Thus, the debtor would have to pay the claims over time with interest through his plan. The debtor is currently the subject of a disciplinary proceeding, the result of which could result in the suspension of his license to practice law or disbarment. The debtor has offered no evidence as to how he would fund plan payments if he is no longer licensed to practice law, which is his source of income.
The debtor asserts that the court’s decision to convert was based on prepetition conduct, a desire to punish the debtor for that prior conduct and an attempt to deny him a fresh start. While the court did recite rulings by numerous courts across the country that have found the debtor engaged in serious misconduct before those courts, and had been sanctioned for that conduct, those rulings merely established the background for the court’s finding that the debtor has continued his pattern and practice of being untruthful. The debtor’s misconduct did not stop when he filed his bankruptcy petition. Rather, the court found that the debtor had filed misleading or false documents in this case and provided potentially false testimony at his Rule 2004 examination.
Add to this the fact that Minnesota legislators — backed by the small businesses Hansmeier has pursued for dubious ADA violations — are now attempting to shut down Hansmeier’s new money train.
Rowland, who says her restaurant was in compliance with the disability access requirements, says she eventually settled the lawsuit for $8,500 to avoid paying even more in legal fees.
“This is someone taking advantage of a very big loophole in our legal system,” Rowland said. She testified before state lawmakers Thursday as lawmakers introduced a law that seems to be aimed directly at attorneys like Hansmeier.
One lawmaker even joked, “The suggestion was made that we make this the Paul Hansmeier Act.”
The Minnesota Chamber of Commerce worked on the bi-partisan legislation with the Minnesota State Council of Disability and the Human Rights Department.
“We’re really just trying to limit some of the litigation lawsuit abuse that’s been occurring,” Chamber of Commerce Vice President Beth Kadoun said.
The legislation would give businesses at least 30 days to respond to lawsuits, shift the burden of proof in some cases to those filing the lawsuit and restrict attorneys from demanding immediate settlements.
Hansmeier appears to be hiding the assets he does have and presumably is attempting to pay off his debts by intimidating small businesses into lowball settlements. If he’s disbarred — or if the legislation passes — his sole revenue stream will dry up. Then what?
The first step is already in place. Hansmeier has been ordered to liquidate his assets. His
appeal motion to stay Chapter 7 conversion pending appeal has failed and the judge presiding over his bankruptcy case is no more receptive to Hansmeier’s actions than the judges presiding over the tail end of the Prenda debacle.
The debtor has refused and continues to refuse to disclose complete and accurate financial information. The debtor has dissipated over $80,000 in estate assets since the case was filed. Other courts have already found that the debtor exhibits a “serious and studied disregard for the orderly process of justice” and “a relentless willingness to lie to the court on paper and in person.”
There’s certainly more to come in the next few months. Hansmeier hasn’t shown any interest in scaling back his trolling efforts and seems to be hellbent on pissing off every judge he appears in front of. He’s likely going to end up without a license to practice law — which appears to be his only marketable skill. And it’s a skill he can’t wield without being abusive and dishonest.
Might as well fire up another batch of Orville Redenbacher’s Schadenfreude-Flavored Gourmet Popping Corn and settle in. For a steady stream of updates, I wholeheartedly recommend following Sophisticated Jane Doe and the Minneapolis Star-Tribune’s Dan Browning, from whom much of the above has been sourced. For additional entertainment, Hansmeier himself has rather belatedly joined Twitter, although most of his posts are just self-interested hashtag ADA lawsuit spam.
Filed Under: ada, bankruptcy, hiding assets, padraigin browne, paul hansmeier, trolling
Companies: alpha law, mill trust, monyet, prenda, prenda law