Lawyers file involuntary bankruptcy petition in Rothstein case
By: BY AMY SHERMAN AND JAY WEAVER
Published: Tue, 11/10 @ 7:02PM
Lawyers have filed a petition on behalf of three investors to force Fort Lauderdale attorney Scott Rothstein's law firm into involuntary bankruptcy.
Attorneys John Genovese and Jeffrey Sonn filed the petition Tuesday afternoon in federal court. They filed it on behalf of three investors who say they lost money through Rothstein's alleged investment scheme: Bonnie Barnett, who lost $500,000; Aran Development, $345,000 and Universal Legal, $7,800, according to the petition.
Barnett was a friend of Rothstein's.
``She thought they were friends,'' Sonn said. ``A lot of investors thought they were friends. They trusted him. They had a relationship with him. That's why they invested with him.''
Stuart Rosenfeldt, who is now the CEO of Rothstein Rosenfeldt Adler, could not be reached for comment Tuesday.
Rothstein -- who has not been charged criminally -- has been accused by investors of stealing hundreds of millions of dollars and by his law partners of wiping out their Fort Lauderdale firm. He is staying at an undisclosed location and could not be reached for comment.
The petition asks the court to appoint a Chapter 11 trustee to investigate Rothstein's alleged Ponzi scheme and to help investors reclaim losses.
``The filing is intended to take advantage of the much stronger powers we will have in bankruptcy to trace and recover assets and allows the law firm to continue to operate,'' Genovese said.
Under the involuntary petition, the law firm would have to consent -- which Genovese believes it will. Otherwise Genovese will have to prove that the firm is in financial distress.
``We believe this is in the best interest of the creditors and investors and the best venue that affords them the best opportunity to try to find money and return it,'' Sonn said.
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