A1 Top Story Bankruptcy Deb Tarrant Federal Court Global Energies Plasma Power LLC Steven Lippman

Case pits Fort Lauderdale bankruptcy judge vs higher federal courts

U.S. Bankruptcy Judge Raymond Ray, left, and U.S. District Judge Darrin Gayles

By Noreen Marcus, FloridaBulldog.org

not often criticize one another in public. A judge hardly calls out a
colleague for holding a bogus trial.

But that’s exactly what Miami U.S. District Judge Darrin Gayles did final month to Fort Lauderdale U.S. Bankruptcy Judge Raymond Ray. In line with Gayles, Ray “should never have conducted” an 11-day trial in the case of Wortley v. Chrispus Enterprise Capital.

That’s just one of many oddities on this only-in-South Florida authorized saga. Other options are smoking-gun emails, a disgraced companion of the notorious Scott Rothstein, and a recreation plan to save lots of the planet with clean gasoline. The corporate shaped to try this, International Energies LLC, imploded into items which are still being collected, 9 years later, in bankruptcy courtroom.

years ago the 11th Circuit U.S. Courtroom of Appeals powered past one other taboo
when its judges accused bankruptcy lawyer Chad Pugatch of overlaying up a
shopper’s false statements and hiding incriminating emails in the Wortley case.
The courtroom advised Ray to ensure Pugatch, his shopper, and the shopper’s enterprise
companion did not “profit from their misconduct.”

In an trade
between 11th Circuit Judge Peter Fay and Pugatch, Fay blurted, “That’s an
outright lie,” based on the transcript of a July 30, 2014 hearing. Pugatch
had simply repeated shopper Richard Tarrant’s denial that the scheme at the middle
of the case ever existed.

The Atlanta courtroom’s opinion, handed down two
weeks after the listening to, lists the various Florida Bar rules Pugatch might have
violated by allowing his shopper to offer false testimony. The opinion apparently
launched a Florida Bar investigation of Pugatch.

The litigation additionally calls into question the
methods and rulings of Ray, who introduced in December he’ll retire from the
Fort Lauderdale bankruptcy bench later this yr.

Do-it-yourself lawyer

And it turned Boca Raton funding banker Joseph
Wortley into a do-it-yourself lawyer. When Ray ordered the trial that Gayles
just lately censured, Wortley needed to go purchase a ebook about courtroom process.

Wortley additionally maintains an internet site concerning the case.

In his order final month, Gayles reversed Ray’s
anti-Wortley ruling, the results of that pointless trial. Gayles ordered Ray
to rule for Wortley, assess his damages, and sanction Pugatch and the others
just because the 11th Circuit informed Ray to do five years ago.

Not solely has that not happened, Ray primarily
tried to overrule the 11th Circuit, a courtroom that sits one rung under the U.S.
Supreme Courtroom – and two rungs above him.

Lawyer Chad Pugatch

In an interview with Florida Bulldog, Pugatch denied the false statement cost and stated he didn’t withhold any e-mail evidence. Pugatch characterized the emails as benign and brought out of context.

He has asked Gayles to rethink his ruling
because the trial in entrance of Ray was the first time he was allowed to defend
himself and his shopper, Pugatch stated. Earlier than that, their due course of rights
have been ignored, he asserted.

“Anyone who reads Judge Ray’s order can see
that we didn’t do something flawed,” Pugatch stated. “That’s vindication in our

Judges are barred from talking about matters
which will come before them, and the Wortley case may return to Ray.

Wortley stated just lately he couldn’t recall
profitable a single argument in bankruptcy courtroom. “If I stated the solar rose within the
east, and Chad [Pugatch] stated it rose within the west, Judge Ray would say it rose
within the west,” he stated.

The 11th Circuit spots a plot

In 2014, the 11th Circuit ruled that James
Juranitch and Richard Tarrant, Wortley’s erstwhile companions in International Energies,
schemed to shove him out the door. International was owned by Wortley, Juranitch, and
Chrispus Venture Capital LLC, Tarrant’s company.

Suggested by Pugatch, the courtroom stated, Juranitch
and Tarrant used involuntary bankruptcy to drive an auction of International’s belongings.
The profitable bid was $750,000–a small fraction of what Wortley stated the company
was value. The successful bidder was Chrispus, the identify on the bankruptcy

James Juranitch

As Tarrant and Juranitch started a new company, Plasma Power LLC, Wortley sued them for allegedly filing the International Energies petition in dangerous religion.

Pugatch stated the petition was an excellent faith
try and revive International Energies. “The company was lifeless earlier than the bankruptcy
was filed,” he stated.

Ray agreed with Pugatch. It wasn’t till the
case reached the 11th Circuit that Wortley began gaining floor.

Wortley’s Exhibit A is a string of emails
between Tarrant and Juranitch that Wortley found late within the recreation. The
emails dated June 17-19, 2010 detailed their plan to purchase out International Energies on
a budget and open Plasma Power.

“Lastly the [new company] might have to face
as much as a authorized battle from [Wortley] and must dot its I’s and cross its
T’s,” Juranitch stated in a June 17 e mail to Tarrant.

The elusive e-mail drop

Through the legal battle, Wortley acquired a
load of documents from his former companions that ought to have included the
tell-tale emails, but didn’t, the 11th Circuit observed. Pugatch stated he’d
handed over each related communication.

Steven Lippman

Ultimately Wortley received the emails from Steven
Lippman, an affiliate at Pugatch’s regulation agency who was tidying up a related state
courtroom case earlier than going to prison. An ex-partner in Scott Rothstein’s Fort
Lauderdale firm, Lippman acquired a three-year sentence for aiding and profiting
from Rothstein’s large Ponzi scheme.

Pugatch stated the emails have been made obtainable to
Wortley, however he didn’t retrieve them. “The stuff he says was withheld was
sitting there in a box for months and his attorneys failed to select them up.”

The 11th Circuit disagreed. “In sum, the
events, who had the proof that Wortley needed to substantiate his claims,
blocked his entry to it and deliberately prevented him from finding it.”

The courtroom voided the International Energies sale and
ordered other next steps: Sanctions that Ray had imposed towards Wortley would
be vacated. Wortley was to be compensated “for any and all damages,” plus
attorneys’ fees and costs, the 11th Circuit decreed.

Ray’s supervisors on the appellate courtroom informed
him to do all the things essential “to make sure that Chrispus, Juranitch, Tarrant,
and Pugatch don’t profit from their misconduct and abuse of the bankruptcy
course of.”

Plasma Power continues to be in operation after 9
years. Juranitch declined to comment by way of an assistant.

A ‘resurrection’

Tarrant stated he needed to reorganize International Energies, and an e-mail stating his want to “resurrect” the company was shortened to remove that word and subsequently falsified.

Richard Tarrant

Tarrant denied ever
making a false statement about his talks with Juranitch earlier than the bankruptcy
submitting. In accordance with Tarrant, when he stated he by no means mentioned pushing Wortley
out of the corporate, he meant they by no means had a dialog about that.

Pugatch stated the company that succeeded International
Energies is another failure. “Plasma Power has by no means made a penny, by no means had a
deal come by way of.”

Tarrant stated, “Plasma Power is on the again burner as we
now pursue a water remediation know-how.”

In 2017, Ray held the 11-day trial during which
Wortley represented himself. Then Ray issued a 70-page order that blasted
Wortley and awarded him nothing.

“It’s the opinion of the Courtroom that Mr.
Wortley’s personal animosity and rancor in the direction of Mr. Juranitch and Mr. Tarrant
has fueled this case far past the rational stopping level of a standard
bankruptcy case,” Ray wrote in his June 25, 2018 order.

The judge held Tarrant and Juranitch blameless, finding they simply used bankruptcy as a car to reorganize the company. Based mostly on “new” and “substantially different” proof, he concluded that Wortley was the only one who benefited from the bankruptcy.

Enter the Florida Bar

And about those emails the 11th Circuit needed
Pugatch punished for concealing?

Ray stated the problem occurred in state courtroom,
so he had no proper to situation sanctions. Even when he might act, “the delay in
producing the ‘smoking gun’ emails was justifiable or excusable, and the
alleged misconduct solely rose to the level of recklessness, at the most.”

Wortley stated he filed a grievance towards
Pugatch with the Florida Bar after the 11th Circuit’s opinion. Pugatch
stated the matter was resolved years in the past in his favor. Asked for written proof,
he declined to share it.

The Florida Bar doesn’t publicly acknowledge
it’s investigating a lawyer until and till there’s a discovering of possible
cause to proceed towards the lawyer.

The International Energies bankruptcy, now a Chapter
7 liquidation, grinds on with out Pugatch. He’s nonetheless in the struggle, but solely on
his own behalf. He anticipates clarification from a higher courtroom.

“Someway, it’s going back as much as
the 11th Circuit and we’re going to seek out out what they meant,” Pugatch stated.

After Judge Gayles’ ruling final month, an
lawyer for Wortley asked him to step in and execute the 11th Circuit’s grasp
plan from 2014 because of Ray’s “hostility to Wortley’s position.” The movement
is pending.

Wherever the case lands, Wortley stated he’ll
struggle on. He spoke nostalgically about starting International Energies together with his previous
pals Juranitch and Tarrant. They moved in the identical social circle, assembly
and enjoying golf on the Royal Palm Yacht and Country Membership in Boca Raton.
Tarrant has particular standing as a result of he’s married to Hillsboro Seashore Mayor Deb

The three men needed to build an enterprise
that may flip trash into power. Juranitch contributed concepts, Tarrant seed
cash, and Wortley management.

“It will have been an enormous advance in dwelling
for human beings all through the world,” Wortley stated wistfully.

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