Fee Arbitration Award Dischargeable In Bankruptcy
Attorney Scheer lost her bid to declare unconstitutional the State Bar’s process for suspending an attorney who does not pay a fee arbitration award.
Sheer then attempted to discharge the debt in bankruptcy. The State Bar contended that the award was a non-dischargeable fee or penalty.
Held: the debt was dischargeable. The court was reluctant to side with the defrocked attorney in this case and the State Bar suffered a rare loss in Federal court.