UPDATE: The Court granted the motion. Mark your calendar. Hazelrigg’s schedules are due April 9.
Here’s the latest update. The bankruptcy court is requiring Hazelrigg to produce schedules summarizing his assets and liabilities. Hazelrigg responds that he needs an additional sixty days because his bookeeper died and he is thus having trouble rounding up documents. The request for more time is here.
In the request, Hazelrigg doesn’t mention as one reason for delay the unnamed creditor that cleaned out his apartment – records and all – at his downtown Seattle condo (the Klee). This was the excuse offered in litigation in eastern Washington over interest in one of Hazelrigg’s Centurion entities. So we take the omission in the latest request, pictured above, to mean that he has since obtained the documents and could produce them, right? Also, what happened to his asserting the Fifth Amendment privilege against incriminating himself?
If we were Rigby, we would move quickly to get whatever information we could out of Hazelrigg, even if incomplete, to prevent memories from fading or documents from being lost. This would be one of those cases where an early deposition could be valuable …
Oh yeah, one other thing. If Hazelrigg is now pro se, he won’t be able to represent any of his LLC’s, even if he’s the only member. We posted about the pro se exception to single member LLC’s awhile back, and here’s the post.
Every litigator has debated this question with his/her partners: My opponent is acting pro se, and is not an attorney. Can he represent his LLC against my client? The arguments went both ways. In a single member LLC, which in some ways is like a partnership, the member is essentially representing himself. This is the same as representing oneself in court, which is allowed. But if a corporate entity is treated as a separate person from its members/shareholders, isn’t that practicing law on behalf of another?
For years, trial judges have gone both ways on this issue, until now. The Washington Court of Appeals, in Cottinger v. Employment Security Department, 162 Wn. App. 782 (2011), held that a single member LLC needs an attorney; its sole member cannot represent it under Washington State’s pro se exception to the unauthorized practice of law (the pro se exception is what allows non-lawyers to represent themselves in court). The appellate court reasoned that if one enjoys the benefits of the corporate form, he must also bear the burden, including the requirement of having an attorney in court. Id. at 790 (“Kirby chose to incorporate and enjoy the benefits of the corporate form. He must also, however, bear the burdens of that choice.”)
A bright line rule. We like it.