A comment left by a reader claims that a small but important detail in the bankruptcy law could have helped Grandma Heidi Powell keep her rightfully owned domain name.
Is it possible that Heidi Powell is going to lose her domain name because of bad representation?
On one of the latest updates in August Heidi Powell announced that she had substituted her previous attorney with a new one:
“August 14, 2017
Withdrawal and Substitution of Attorney Jacob DeGraaff to represent us. Involvement of Thomas Lester terminated.”
Again I would be happy to hear from any lawyer that knows about bankruptcy law.
Here is the comment left by reader Bethy that is an interesting read:
“Seems to me that there was a basic and obvious issue that was ignored that should have shut this down right away. Trainer Heidi went to the bankruptcy trustee and purchased the domain through the court for $20,000… meaning the court agreed the domain was actually worth $20,000 at the time of the bankruptcy filing in 2012. How is that even possible? At the time Grandma Heidi filed her bankruptcy in 2012, it was BEFORE Trainer Heidi had any web presence and long before she filed for her trademark in 2014. That’s two years AFTER the bankruptcy. How can they retroactively value an asset… especially from someone who wasn’t a party to the original bankruptcy? She forced herself into a discharged bankruptcy based on what would have been, at most, a $25 asset and likely exempt. The trustee wouldn’t have even bothered with it back in 2012 because it had no resale value worth the effort or would have fallen under the exemption schemes. But because of a minor issue and a sleazeball lawyer, they force them to reopen and revise a filing and claim it’s actually worth $20,000?? Not only did they manage to steal this woman’s domain name from her… they cost her additional money because of the forced bankruptcy amendments.
I mean, if you think about it this could set a really bad precedent for bankruptcy law. let’s say you had a piece of jewelry… a ring… that, at the time you filed for bankruptcy, was worth about $100. At the time, prices for precious metals were low and the ring needs some repairs because it was missing a stone. The $100 was based on several professional opinions on scrap value. This is a pretty legit value on old/broken jewelry. So… 5 years later, the spot prices of metal are higher and the ring has been repaired, thus, that $100 ring is now worth about $1500. Somebody randomly decides they want your ring and you refuse to sell it to them. They scour through your personal and financial life trying to find a way to get it from you and find that 5 years prior, you claimed the ring was only worth $100 in a bankruptcy filing. They say, “Ah ah! See! They lied to the court about the value of the ring. I’m going to claim they committed fraud to get the case reopened…. and force the court to sell it to me… because that ring is worth at least $1500. I’m going to offer $3,000 though, to the court/trustee to buy the ring… and tell the court that is the retail price of the ring today and what they should have declared 5 years ago as the value. I’m going to insist that they didn’t have enough exemption value to cover the full value of the ring back then, which is why they lied about its’ value… so the trustee wouldn’t take it from them and sell it, hence the lowball $100 value.
So, the trustee sees dollar signs. The trustee gets paid by bringing in as much money as possible. He sees a payday and goes with it…agrees the ring is (or was) actually WAS worth $3,000 5 years ago… and should have been sold by the trustee back then. (Even though there’s no way in any reasonable person’s mind they would have received $3000 for it back then). This ends up costing the debtors even MORE money in court and lawyer fees, as well as possible fines and amended filing fees, etc… and despite documentation that, at the time of the original bankruptcy, the ring really was only worth about $100… he decides to sell it…. because he can…. years later because somebody said it was worth more. So the debtors, who paid to have the ring repaired… now lose it entirely, in addition to all the additional fees paid out.
Seems to me that violates every tenet and purpose of the bankruptcy code, and the reasons for the exemptions and discharge. I can see creditors and other random people…or maybe ex spouses etc, filing similar cases out of spite… to be able to buy otherwise exempt possessions or even force a debtor to pay up on an old debt that was originally discharged years prior because of inflation, repairs, etc. If they think they can sit on an old debt, and go back to court and force the issue years later… I mean, why even bother with the protections of bankruptcy? Frankly… it’s kind of scary and I don’t know why Grandma Heidi didn’t have a lawyer who could argue such a simple concept to get this shut down. I’m not even a lawyer… so all of this is speculation based on my knowledge of the bankruptcy process (help people fill out petitions, work for lawyers, etc). I’m just confused by how it got this far and this messy over something so easy that could have, theoretically, stopped it cold. Of course… this is also why when you file for bankruptcy you list EVERYTHING, including online content like domain names. It’s easily overlooked because it’s not a really tangible items and is often and left off of petitions because most domains are relatively worthless to trustees and would likely fall under any exemption scheme. People just don’t even think to list them because they are so insignificant. Had Grandma had made sure her domain was on the original petition, this might have never been an issue. Still doesn’t sit right with me that somebody can come in years later and claim fraud because they want something and are going to play the rich, spoiled brat and keep them in court long enough until they cave…because they can afford to. I really hope Chris and Heidi Powell are proud of themselves.”
Here is a small history of the HeidiPowell.com case: