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In Bankruptcy Court, Jalalpour Ends Plaintiff’s Blatant Abuse of Judicial System to Avoid Paying $5M to Former Spouse

May 5, 2023

Oh, what a twisted tale this plaintiff tried to weave.  After two decades of using the courts to avoid paying his former spouse her monthly maintenance fee, the plaintiff filed chapter 7 bankruptcy and sued her and her attorneys for violating the automatic stay in a last ditch effort to further forestall his former wife’s legal claims.  Johnson & Bell Shareholder, Ramses Jalalpour, was up to the task of unweaving the tale.  In the last verse, the US Bankruptcy Court, Southern District of Florida granted motion for summary judgment in favor of his wife and her attorneys, ending the plaintiff’s latest legal maneuver to avoid paying more than $5 million owed to his former spouse.

In this dispute, the plaintiff and his wife were divorced in 1995. Distribution of the marital assets took place in Cook County.  Soon after the Illinois court entered judgment addressing support obligations, plaintiff transferred his then existing business assets to an offshore Trust.  The Illinois court initially awarded the former wife, who suffers from several serious medical conditions, monthly maintenance payments of $20,000.  In 1999, the Illinois court entered a supplemental judgment increasing monthly maintenance to $22,000. In that judgment, the Illinois court found that plaintiff’s transfer of assets into the Trust was fraudulent and was done to avoid paying sums to his former wife.  Plaintiff was held in contempt and continued paying the monthly maintenance until 2006. 

After 2006, the former wife filed several motions with the Illinois court seeking to hold plaintiff in contempt for failing to make the monthly payments.  In 2009, plaintiff transferred all his personal property to the Trust.  In 2016, the former wife filed another motion that plaintiff should be held in contempt for not paying monthly maintenance.  Plaintiff claimed he was insolvent and could not pay the overdue maintenance, even though he reported more than $16 million in income on his 2016 tax return.  The circuit court ruled in the former wife’s favor and found plaintiff in contempt and issued a body attachment order for plaintiff’s arrest. On appeal, the appellate court affirmed and agreed with the circuit court that plaintiff created the Trust “with the obvious purpose of avoiding the payment of his maintenance obligations.”

In 2020, plaintiff filed a chapter 7 bankruptcy petition in the Southern District of Florida. In 2021, while his bankruptcy was pending, plaintiff was arrested in Illinois pursuant to the body attachment.  Plaintiff filed a motion seeking his release from jail due to his pending bankruptcy.  The former wife was represented by our attorney clients, who successfully argued that according to disclosures made by plaintiff under oath in his bankruptcy case, the assets of the Trust were not property of his bankruptcy estate.  Thus, the automatic stay from plaintiff’s bankruptcy filing did not prevent the former wife from pursuing assets outside of plaintiff’s bankruptcy estate.  The trial court (and, again, the appellate court) agreed, and plaintiff remained in Cook County jail for seven weeks until his current spouse posted his bond.

After being released, plaintiff filed an adversary proceeding against his former wife and her attorneys, claiming that they violated the stay by successfully keeping him in jail after he filed bankruptcy.  Plaintiff sought punitive damages and damages for emotional distress suffered as a result of being unlawfully imprisoned for seven weeks.  Plaintiff’s theory of liability was premised on the Trust assets being included in his bankruptcy estate, a position diametrically opposed to the one he was actively taking in his main bankruptcy case, where he was claiming that the Trust assets were not part of his bankruptcy estate and therefore not subject to collection by the U.S. Trustee.  Johnson & Bell represented the former wife and her attorneys in the adversary proceeding.

On May 3, 2023, the bankruptcy court granted our motion for summary judgment, finding that plaintiff was judicially estopped from simultaneously claiming that the Trust was part of his bankruptcy estate and not part of his bankruptcy estate.  The court found that plaintiff’s “two-faced approach makes a mockery of the judicial system.”  Thus, regardless of whether any violation of the automatic stay occurred, judgment was entered against plaintiff.


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