Court Opinion

ID: 9892197
Source: CourtListenerOpinion
Date Created: 2023-10-20 21:01:15.469106+00
Date Added: 2024-06-11T14:17:46.223848
License: Public Domain

FILED
                                                                                OCT 20 2023
                          NOT FOR PUBLICATION                               SUSAN M. SPRAUL, CLERK
                                                                              U.S. BKCY. APP. PANEL
                                                                              OF THE NINTH CIRCUIT
          UNITED STATES BANKRUPTCY APPELLATE PANEL
                    OF THE NINTH CIRCUIT

 In re:                                             BAP No. CC-22-1128-FLC
 DA & AR HOSPICE CARE, INC.,
              Debtor.                               Bk. No. 2:21-bk-19219-ER

 MICHAEL EUGENE REZNICK,
               Appellant,
 v.                                                 MEMORANDUM*
 UST- UNITED STATES TRUSTEE, LOS
 ANGELES; YVETTE HARGROVE-
 BROWN; DA & AR HOSPICE CARE,
 INC.,
               Appellees.

               Appeal from the United States Bankruptcy Court
                     for the Central District of California
                Ernest M. Robles, Bankruptcy Judge, Presiding

Before: FARIS, LAFFERTY, and CORBIT, Bankruptcy Judges.

                                 INTRODUCTION

      Attorney Michael Eugene Reznick filed a chapter 111 petition on

      *
        This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
      1
        Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all “Rule” references are to the Federal
Rules of Bankruptcy Procedure.
behalf of DA & AR Hospice Care, Inc. (the “Hospice”). The bankruptcy

court found that Mr. Reznick was not retained by the Hospice, did not have

authority to act on behalf of the Hospice, and knew that he had no basis to

file the petition. It referred him to a disciplinary panel for fraud on the

court and violation of Rule 9011. Mr. Reznick appeals, maintaining that the

Hospice’s medical director authorized him to initiate the bankruptcy case.

      All of Mr. Reznick’s arguments are meritless, and many of them have

nothing to do with the matter on appeal. We AFFIRM.

                                       FACTS2

A.    Prepetition events

      The bankruptcy petition was preceded by a murky dispute over

ownership and control of the Hospice and its affiliated businesses.

      Ailene Rivera was an officer and sat on the boards of directors of the

Hospice and its affiliated company, NobleQuest Health Foundation, Inc.

(“NobleQuest”). Mr. Reznick was NobleQuest’s attorney. In September

2021, on Mr. Reznick’s recommendation, Ms. Rivera was placed on

administrative leave and referred to a special litigation committee for

investigation into allegations of wrongdoing.

      In October 2021, the Hospice and others (represented by Mr. Reznick)

sued Ms. Rivera for fraud and embezzlement in the Los Angeles superior

      2
          We exercise our discretion to take judicial notice of documents electronically
filed in the underlying bankruptcy case and related cases. See Atwood v. Chase Manhattan
Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
                                           2
court. The complaint alleged that Dr. Jose De La Llana was the CEO,

medical director, and controlling shareholder of the Hospice and other

associated companies. But the complaint also contained a contradictory

allegation that Dr. Daniel Rose’s trust owned and controlled the Hospice.

     In early December 2021, Mr. Reznick filed a chapter 11 petition on

behalf of NobleQuest. The bankruptcy case was dismissed later that month

for the debtor’s failure to file schedules and other documents.

B.   The Hospice’s bankruptcy case

     1.    The chapter 11 petition

     In mid-December 2021, the Hospice filed a skeletal bankruptcy

petition under chapter 11 subchapter V. Mr. Reznick signed the petition as

the Hospice’s attorney. Dr. Yvette Hargrove-Brown signed the petition on

behalf of the Hospice, purportedly as its president.

     The petition contained a list of creditors but otherwise did not

include schedules or any other required documents. The bankruptcy court

issued a deficiency notice ordering the Hospice to file the missing

documents within fourteen days.

     The Hospice did not file the required schedules and documents by

the deadline. The bankruptcy court ordered the Hospice to file the missing

documents by January 19, 2022 or face dismissal.

     2.    The § 341(a) meeting of creditors

     Prior to the deadline, Mr. Reznick and Dr. Hargrove-Brown appeared

at the § 341(a) meeting of creditors on behalf of the Hospice. The meeting

                                      3
did not go well.

      Mr. Reznick admitted that he did not file a list of related cases,

including the bankruptcy case he filed for NobleQuest. He acknowledged

that he did not submit information required by the U.S. Trustee but

explained that “there’s nothing to – nothing meaningful I should say to

provide other than we have no clue.”

      Dr. Hargrove-Brown stated that she was recently appointed as the

CEO/president of both the Hospice and NobleQuest. But she could not

answer basic questions about the Hospice, such as the number of board

members or their names, whether the Hospice operated an in-patient

facility or provided in-home care, the number of its employees and

patients, the nature and amount of the Hospice’s creditors’ claims, or the

Hospice’s monthly income or expenses, business licenses, cash flow, assets,

or liabilities. She even admitted that she did not know the actual location of

the Hospice and had never been into the Hospice’s facilities. She said that

Dr. Rose owned the Hospice but neither she nor Mr. Reznick could confirm

that fact or his ownership percentage. Neither Dr. Hargrove-Brown nor

Mr. Reznick could confirm whether the Hospice was insolvent.

      3.    Dismissal for failure to file schedule and other documents

      The Hospice did not comply with the bankruptcy court’s order to file

schedules and other missing documents by the January 19 deadline. On

January 25, the bankruptcy court dismissed the chapter 11 case. No one

appealed that order.

                                       4
C.    The U.S. Trustee’s application for an order to show cause

      The U.S. Trustee then filed an application for issuance of an order to

show cause (“OSC Application”) directing Mr. Reznick and Dr. Hargrove-

Brown to explain (1) why the bankruptcy petition was not filed in bad

faith; (2) why Mr. Reznick should not be required to disgorge all fees;

(3) why Mr. Reznick should not be referred to the bankruptcy court

disciplinary panel for filing a fraudulent bankruptcy case; and (4) why

Dr. Hargrove-Brown should not be ordered to pay the subchapter V

trustee’s fees and barred from future bankruptcy filings.

      The U.S. Trustee based the OSC Application on three points. First, the

U.S. Trustee noted that the Hospice, Dr. Hargrove-Brown, and Mr. Reznick

were involved in a total of at least six other bankruptcy cases filed in late

2021 by medical businesses, including the recent NobleQuest filing, all of

which were unsuccessful.

      Second, the U.S. Trustee described the inability of Dr. Hargrove-

Brown and Mr. Reznick to provide basic facts at the meeting of creditors

and their failure to provide the U.S. Trustee with the requested information

and documents.

      Third, the U.S. Trustee said that, shortly after Mr. Reznick filed the

Hospice’s petition, Ms. Rivera contacted the U.S. Trustee and alleged that

the bankruptcy case was filed in bad faith and without authorization.

Ms. Rivera provided the Hospice’s business records and corporate

documents and a declaration signed under penalty of perjury.

                                       5
      In her declaration, Ms. Rivera asserted that she was the president of

the Hospice and owned fifty percent of its stock; Rosalie Manuel and Paul

Laurel owned the remaining fifty percent. She said that the Hospice and its

related entities were the targets of takeovers by certain individuals,

including Mr. Reznick, Dr. De La Llana, Miteshkumar Patel, Carlos

Escobar, and Daniel Callahan. She claimed that they used false corporate

filings to remove her as officer of the companies. Ms. Rivera declared that,

in December 2021, Dr. Hargrove-Brown appeared at the companies’ offices

claiming to be new management, but she was not an officer or employee of

the Hospice and had no authority to file the bankruptcy petition.

      The U.S. Trustee argued that the court should require Mr. Reznick to

show cause why he should not be referred to the disciplinary panel

pursuant to Local Bankruptcy Rule 2090-2(b) for initiating fraudulent

bankruptcy cases. He also cited Rule 9011 as a basis to impose sanctions.

Finally, the U.S. Trustee urged the court to require Dr. Hargrove-Brown to

show cause why she should not pay the case trustee’s fees and be barred

from future bankruptcy filings.

      The bankruptcy court granted the OSC Application and issued the

order to show cause (“OSC”).

D.    The OSC proceedings

      1.    Mr. Reznick’s and Dr. Hargrove-Brown’s responses

      In response to the OSC, Mr. Reznick filed a declaration in which he

asserted that the U.S. Trustee had been “duped” by Ms. Rivera, a “criminal

                                      6
mastermind.” He asserted that, as a physical therapist, Ms. Rivera could

not own, control, or operate a medical corporation. Rather, he maintained

that Dr. De La Llana owned the Hospice and was its medical director.

      Mr. Reznick stated that Ms. Rivera and others had engaged in an

embezzlement scheme against NobleQuest, the Hospice, and an affiliated

company called Care Plus, Inc. He said that he filed the superior court

complaint against Ms. Rivera, and JPMorgan Chase Bank froze the

Hospice’s bank accounts; as a result, the Hospice had to file for bankruptcy

protection.

      Mr. Reznick maintained that the Hospice was insolvent on the

petition date and that he did not act fraudulently or in bad faith. He

claimed that he told the U.S. Trustee that he intended to file an amended

petition and schedules. He said that the U.S. Trustee ignored his requests to

reschedule the § 341(a) meeting, evidencing bad faith by the U.S. Trustee.

      Mr. Reznick attached the following documents in support of his

declaration: (1) California Secretary of State filings showing that Dr. De La

Llana was the CEO, secretary, CFO, director, agent, and medical director of

the Hospice; (2) NobleQuest board minutes from September 2, 2021 noting

his allegation of Ms. Rivera’s misappropriation of funds; (3) an October 15,

2021 retainer letter from Mr. Reznick to Dr. De La Llana concerning the

scope of Mr. Reznick’s representation of NobleQuest; (4) the superior court

complaint against Ms. Rivera; and (5) an e-mail transmitting the superior

court complaint to the U.S. Trustee.

                                       7
      Dr. Hargrove-Brown, represented by counsel, stated in her

declaration that she was “Global Administrator” for Clinica Medica

General Medical Center, Inc. (“CMG”). She said that, in September 2021,

she joined the board of directors for NobleQuest and was appointed CEO.

      She stated that Mr. Reznick contacted her in early December 2021 to

file a bankruptcy petition on behalf of NobleQuest (which was in the

process of merging with CMG). Later that month, he had her sign another

bankruptcy petition on behalf of the Hospice.

      2.     Responses to the declarations

      The U.S. Trustee responded to Mr. Reznick’s and Dr. Hargrove-

Brown’s declarations. He contended that neither respondent presented any

evidence showing that the bankruptcy petition was filed in good faith. He

pointed out that the scant information provided in the petition was

unsupported and did not appear to be truthful. Furthermore, he argued

that Mr. Reznick represented two of the Hospice’s creditors, which created

a conflict of interest.

      The Hospice (no longer represented by Mr. Reznick) argued that

Mr. Reznick and Dr. Hargrove-Brown “neither owned nor had any

authority” to file the petition and that “[t]he fraudulent filing was an ill-

conceived hostile takeover attempt of the Hospice by Respondents.”3

      3 The Hospice stated that it was incorporated in California in 2014 by Lusine
Harutyunyian. Ms. Harutyunyian initially owned 100% of the Hospice, but in 2017 she
transferred her interest to four individuals with a 25% share each. In 2020, two of those
individuals sold their shares to Ms. Rivera, such that Ms. Rivera owns 50%.
                                            8
      3.    Further responses

      Dr. Hargrove-Brown then changed her tune. In a supplemental

declaration and exhibits that she filed pro se, she said that, based on the

documents filed by the U.S. Trustee, she believed that “my understanding

of what may have transpired is different than what I was led to believe.”

      Dr. Hargrove-Brown said that she was told that the NobleQuest

board had elected her its new CEO as a part of CMG’s merger with

NobleQuest and its affiliated companies. She was led to believe that

Dr. Rose owned the Hospice. When she signed the Hospice’s bankruptcy

petition, she believed that she was its president and was authorized to do

so. She later learned that there was a dispute over NobleQuest’s ownership

and that “Mr. Reznick did not have the information he indicated that he

did in the Retainer Agreement.” She stated that she never had a chance to

review her first declaration before it was filed. She concluded that, “[a]t

this point, I am not sure who or what to believe.”

      Dr. Hargrove-Brown attached exhibits to support her statements.

Among the exhibits was a lengthy April 2022 e-mail from Mr. Reznick to

Mr. Patel and others, in which Mr. Reznick admitted that he did not have

information about basic facts related to the Hospice. He stated:

            Everything I am doing right now is tied in some way to
      the Bankruptcy OSC involving [the Hospice], a company I have
      been told but have been unable to prove is apparently related
      in some way to NobleQuest, the nonprofit I do represent . . . [,]
      and Care Plus, Inc. a company that I was informed in October

                                       9
2021 was owned or controlled by Jose De La Lallana [sic] . . . .

     I was subsequently informed by Daniel Callahan . . . that
Daniel Rose, M.D., or one of his many related entities . . . now
owns or controls the Debtor, but I have never confirmed this.

      I have also asked repeatedly from [Mr. Callahan] and
alleged members of “new” management, including Hargrove-
Brown . . . to provide me with any documentation whatsoever
that proves the legitimacy of your or our team’s management
and control of any of these entities.

       Please be advised that beyond the [special litigation
committee notice] that I prepared nearly a year ago, I have
nothing to disprove that Ailene Rivera is not in fact the
legitimate owner of these medical practices but for the fact
that she is not a licensed California physicianbed [sic] by
[Dr. De La Llana]. I asked for anything from [Mr. Callahan],
Kelli [Williams], or anyone else connected with the underlying
matters to find something to show legitimacy.

      The United States Department of Justice and US Trustee
are accusing me of filing a fraudulent bankruptcy petition and I
have no documentation to prove otherwise . . . .

      Frankly, the answer I have been given by Hargrove
Brown, [Mr. Callahan] and Kelli Williams, namely, that
“Ailene Rivera took all the corporate records we have and we
don’t have a single document” doesn’t pass the smell test.

       Needless to say, I cannot fight this battle on my own but
if need be I will. Of course, that will make me adverse to you
and Hargrove Brown and everyone else in this sh*t storm of a
case. I trust that nobody wants that to happen and perhaps we
can get some cooperation with your help before the deadlines.

                                10
     ...

      Please be further advised that without some genuine
showing of legitimacy in my opposition, as opposed to the
bullsh*t I have received in the past, the OSC will likely be
granted and I will need to appear before the disciplinary
committee to justify what I did . . . . In the meantime, the
California and likely New York and Illinois Bars will suspend
my law licenses pending the committee’s investigation and
report. I will be out of business.

      Regrettably all of my requests for information
concerning the companies – since October 2021 – have thus
far fallen on deaf ears, with the same lame refrain, that
nobody has a single document because Ailene Rivera
embezzled everything.

      More importantly I do not know who is running the
show right now to get the kind of answers I need before filing
anything else concerning the companies that you and
[Mr. Callahan] are connected with that are also connected with
the OSC. I don’t know who if anyone is telling the truth out
there and don’t understand why we need to play “hide the
ball”? . . .

     ...

      In summary, the bottom line is that I cannot go into court
with the scant evidence we now have against Ailene Rivera.
We will be laughed out of court and it will be binding on us for
any future proceeding, including the pending OSC in the
[Hospice bankruptcy case].

     We will need to explain what happened with Ailene
without any further bullsh*t. We need to deal with the facts
we have, even the bad facts. I can fix or spin what I know, but

                               11
      not what is concealed from me. Right now all I have is thin
      air and I need help from everyone because Ailene looks to me
      and the judge and Department of Justice and Chase [Bank] like
      the one who is wearing the “white hat,” while we all look like
      common criminals.

(Emphases and asterisks added.)

      4.    The memorandum decision and order

      After a hearing, the bankruptcy court issued its memorandum

decision finding that Mr. Reznick committed fraud on the court and

referring him to the bankruptcy court disciplinary panel.

      The bankruptcy court found that, “[a]t the time Reznick filed the

petition, he did not have an objectively reasonable basis for concluding that

Hargrove-Brown, as opposed to Rivera, was the authorized representative

of the Hospice.” It considered Dr. Hargrove-Brown’s declaration and

extensively referenced the e-mail in which Mr. Reznick

      acknowledges that he lacked any information to substantiate
      his allegation that Rivera was not the legitimate owner of the
      Hospice; that he had conducted no due diligence to confirm the
      claim . . . that Rose, as opposed to Rivera, owned the Hospice;
      that he had no documentation to demonstrate that the instant
      bankruptcy filing was not fraudulent; and that he feared that
      the filing of the petition could ultimately lead to the suspension
      of his law license.

It similarly found that he “lacked any objectively reasonable basis to

conclude that he was authorized to [file the petition]. In an attempt to

distract attention from his own wrongful conduct, Reznick’s response to

                                      12
the OSC consists not of concrete evidence but rather further

uncorroborated allegations against Rivera.”

      The bankruptcy court found that, on the petition date, Ms. Rivera

was the president of the Hospice and a 50% shareholder. It found that she

and the other officers did not authorize Mr. Reznick to represent the

Hospice or file the bankruptcy petition. It noted that Mr. Reznick never

produced an executed retainer agreement showing that he was authorized

to represent the Hospice.

      The bankruptcy court concluded that, “[b]y signing the petition on

behalf of the Hospice, Reznick was representing to the Court that he had

authority to cause the Hospice to seek bankruptcy protection. That

representation constituted a fraud on the court” and violated Rule 9011.

Accordingly, his conduct was “sufficiently serious” to warrant referral to

the bankruptcy court’s disciplinary panel. It declined to order Mr. Reznick

to disgorge his fees, because he did not receive any fees for representing

the Hospice. Additionally, the bankruptcy court imposed prefiling

restrictions on Dr. Hargrove-Brown.

      The bankruptcy court entered its order (“OSC Order”) that

recommended that Mr. Reznick’s privilege to practice in the bankruptcy

court in the Central District of California be revoked for at least three years.

It further recommended that he only be allowed to apply for reinstatement

once he fulfilled certain requirements.

      Mr. Reznick timely appealed the OSC Order. Dr. Hargrove-Brown

                                       13
did not appeal the ruling.4

E.    The disciplinary panel proceedings

      Later, a three-judge disciplinary panel issued its memorandum

decision and agreed with the bankruptcy court that Mr. Reznick had

committed fraud upon the bankruptcy court and had violated Rule 9011. It

determined that the bankruptcy court’s recommendation for discipline was

appropriate and adopted it in full. Mr. Reznick did not appeal the

disciplinary panel’s order, and it is final.

      In May 2023, the United States District Court for the Central District

of California also conducted a reciprocal disciplinary review and issued a

similar suspension for three years. 5

                                   JURISDICTION

      The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(2)(A). Subject to our discussion below, we have jurisdiction under

28 U.S.C. § 158.

                                         ISSUE

      Whether the bankruptcy court erred when it (1) found that

Mr. Reznick had committed fraud on the court and violated Rule 9011 and

      4 After briefing was completed, Mr. Reznick’s law firm, Law Offices of Michael E.
Reznick, sought permission to file an amicus brief in this appeal. The motions panel saw
no reason to allow Mr. Reznick a second bite at the apple and denied the motion. We do
not consider any of the arguments raised therein.
      5
        Mr. Reznick included in his excepts of record his response to the district court’s
order to show cause. As discussed below, we will not consider any of this new evidence
that was not before the bankruptcy court in the first instance.
                                            14
(2) referred the matter to the bankruptcy court’s disciplinary panel.

                         STANDARDS OF REVIEW

      We review for an abuse of discretion the bankruptcy court’s

imposition of sanctions, including referral to a disciplinary panel, under

both Rule 9011 and under its inherent sanctioning authority. See Cuevas v.

Chandler (In re Cuevas), BAP Nos. CC-15-1032-KuKiTa, CC-15-1353-KuKiTa,

2016 WL 5845670, at *3 (9th Cir. BAP Oct. 5, 2016); see also Shalaby v.

Mansdorf (In re Nakhuda), 544 B.R. 886, 898 (9th Cir. BAP 2016), aff’d, 703 F.

App’x 621 (9th Cir. 2017).

      To determine whether the bankruptcy court has abused its discretion,

we conduct a two-step inquiry: (1) we review de novo whether the

bankruptcy court “identified the correct legal rule to apply to the relief

requested” and (2) if it did, we consider whether the bankruptcy court’s

application of the legal standard was illogical, implausible, or without

support in inferences that may be drawn from the facts in the record.

United States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009) (en banc).

      “We review our own jurisdiction de novo. Whether a bankruptcy

court’s decision is final, under 28 U.S.C. § 158(d)[,] is a question of law

reviewed de novo.” Silver Sage Partners, Ltd. v. City of Desert Hot Springs (In

re City of Desert Hot Springs), 339 F.3d 782, 787 (9th Cir. 2003) (citations

omitted). “De novo review requires that we consider a matter anew, as if

no decision had been made previously.” Francis v. Wallace (In re Francis),

505 B.R. 914, 917 (9th Cir. BAP 2014).

                                         15
                                DISCUSSION

A.    This Panel has jurisdiction to decide this appeal.

      The U.S. Trustee argues that the bankruptcy court’s OSC Order was

not a final order and that this appeal is moot. While we agree in part with

the U.S. Trustee, we hold that we have jurisdiction over this appeal.

      1.    The OSC Order is a final, appealable order.

      The Trustee argues that the OSC Order only referred Mr. Reznick for

“possible discipline,” so it was not a final, appealable order. However, he

also admits that the OSC Order “might be final nonetheless because the

bankruptcy court made a finding of specific misconduct.”

      The Ninth Circuit has adopted “a pragmatic or flexible approach to

finality in bankruptcy cases. . . . The test for finality in bankruptcy typically

asks two questions: (1) whether the bankruptcy court’s order fully and

finally determined the discrete issue or issues it addressed; and (2) whether

it resolves and seriously affects substantive rights.” Jue v. Liu (In re Liu), 611

B.R. 864, 870 (9th Cir. BAP 2020) (cleaned up).

      The bankruptcy court’s OSC Order is final, in that it fully addressed

the issues raised by the OSC (i.e., Mr. Reznick’s alleged misconduct), left

nothing more for the bankruptcy court to do, and seriously affected

Mr. Reznick’s substantive rights. Although the final determination of the

appropriate punishment was left to the disciplinary panel, that separate

proceeding did not affect the finality of the bankruptcy court’s OSC Order.

      Alternatively, even if the OSC Order was not final, we would exercise
                                        16
our discretion to hear the appeal. 28 U.S.C. § 158(a), (b)(1); In re City of

Desert Hot Springs, 339 F.3d at 787 (“It is within the discretion of the district

court and the BAP . . . to hear interlocutory appeals.”).

      2.    This appeal is not moot.

      The U.S. Trustee contends that this appeal is moot, because there is

no longer a live controversy: the bankruptcy court did not impose any

sanction and merely referred Mr. Reznick to the disciplinary panel;

conversely, the disciplinary panel imposed the sanction, and Mr. Reznick

did not appeal. Although the U.S. Trustee is correct that Mr. Reznick’s

appeal of the suspension is not properly before us, we disagree that we

could not grant him any effective relief.

      “We cannot exercise jurisdiction over a moot appeal.” Ellis v. Yu (In re

Ellis), 523 B.R. 673, 677 (9th Cir. BAP 2014). “The test for mootness of an

appeal is whether the appellate court can give the appellant any effective

relief in the event that it decides the matter on the merits in his favor. If it

can grant such relief, the matter is not moot.” Pilate v. Burrell (In re Burrell),

415 F.3d 994, 998 (9th Cir. 2005) (cleaned up).

      Mr. Reznick is confused about which court ordered his three-year

suspension. He asks that we “vacate the bankruptcy court’s June 27, 2022

order suspending him from practicing in the bankruptcy court for a period

of three years.” He later changes tack, arguing instead that the disciplinary

panel’s ruling was “ancillary” to the bankruptcy court’s ruling and that a

reversal of the OSC Order would necessarily undo the disciplinary panel’s

                                        17
ruling.

       The U.S. Trustee is correct that we cannot overturn the three-year

suspension. However, the bankruptcy court also found that Mr. Reznick

committed fraud on the court. If we were to reverse the bankruptcy court’s

decision, the suspension would stand, but the court’s fraud finding would

not. The existence of that finding might affect Mr. Reznick, including his

bar licenses or malpractice insurance. See Ellis v. Bhd. of Ry., Airline & S.S.

Clerks, Freight Handlers, Exp. & Station Emps., 466 U.S. 435, 442 (1984) (“But

as long as the parties have a concrete interest, however small, in the

outcome of the litigation, the case is not moot.”). Thus, we could grant him

some effective relief, even though it is not the primary relief he seeks. 6

       Therefore, we have jurisdiction to decide this appeal.

B.     The bankruptcy court did not err in referring Mr. Reznick to the
       disciplinary panel for committing fraud on the court.

       Mr. Reznick focuses his appeal on largely irrelevant arguments

attacking Ms. Rivera’s purported ownership of the Hospice. He also tries to

raise new facts and arguments on appeal that he claims (incorrectly) that he

could not raise in the bankruptcy court. We are not persuaded by any of

these arguments.

       6
        Because the disciplinary panel also determined that Mr. Reznick committed
fraud on the court and we cannot disturb the disciplinary panel’s order, a decision
overturning the fraud finding in the bankruptcy court might have no appreciable effect.
But there is still at least a possibility that a reversal of the bankruptcy court’s decision
might grant Mr. Reznick some relief.
                                             18
      1.    The bankruptcy court’s finding of fraud on the court is
            adequately supported by the record.

      The bankruptcy court determined that Mr. Reznick committed fraud

on the court when he filed the bankruptcy petition on behalf of the Hospice

and continued to advocate for the petition’s viability. When considering

fraud on the court, we must determine “whether it harmed the integrity of

the judicial process. Fraud on the court must be an intentional, material

misrepresentation. Thus, fraud on the court must involve an

unconscionable plan or scheme which is designed to improperly influence

the court in its decision.” United States v. Sierra Pac. Indus., Inc., 862 F.3d

1157, 1167-68 (9th Cir. 2017) (cleaned up); see also Fink v. Gomez, 239 F.3d

989, 991 (9th Cir. 2001) (“[A] court certainly may assess sanctions against

counsel who willfully abuse judicial processes.” (cleaned up)).

      Mr. Reznick completely ignores the bankruptcy court’s finding that

he knew that he did not have authority to file the bankruptcy petition. As

the bankruptcy court noted, Mr. Reznick admitted in the April 4, 2022 e-

mail that he could not prove the ownership of the Hospice or disprove

Ms. Rivera’s ownership claims. He characterized the information he had

been given as “bullsh*t” that “did not pass the smell test.” He begged

Mr. Patel and others for proof of corporate “legitimacy” and noted that his

previous requests had gone unanswered. The bankruptcy court also found

that Mr. Reznick could not produce a signed retainer agreement. In

addition, we note that Mr. Reznick never offered a declaration from Dr. De

                                        19
La Llana, the person who supposedly authorized the bankruptcy filing.

      Based on Mr. Reznick’s own admissions, the bankruptcy court did

not err when it found that he had no objectively reasonable basis to

conclude on the petition date that Dr. Hargrove-Brown was authorized to

sign the petition. The bankruptcy court rejected Mr. Reznick’s efforts to

deflect from these issues by pointing to alleged wrongdoing by Ms. Rivera

and her “cronies.” 7

      At oral argument, Mr. Reznick attempted to explain away his April

2022 e-mail by arguing that, when he signed the petition in December 2021,

he believed in good faith that Dr. De La Llana owned the Hospice and

could unilaterally authorize the bankruptcy petition, and he did not realize

until later that his belief might not have been true. But the e-mail

contradicts his argument: he wrote that he had been asking for information

about the Hospice since October 2021, two months before the petition date,

and that “all of my requests for information concerning the companies –

since October 2021 – have thus far fallen on deaf ears . . . .” His claim of

innocence on the petition date is a recent fabrication.

      7
         At oral argument, Mr. Reznick insisted that he had presented the bankruptcy
court with evidence that Dr. De La Llana owned the Hospice and could unilaterally
authorize the bankruptcy petition. Mr. Reznick repeatedly referenced the California
Secretary of State filing that he had attached as an exhibit to his declaration. However,
even if ownership was determinative, that document does not identify any owner of the
Hospice. More importantly, Mr. Reznick admitted in his April 2022 e-mail that he did
not have any proof of ownership and control of the Hospice and had not received any
corroborating information from Dr. De La Llana, Dr. Rose, and others.

                                           20
      The record abundantly supports the bankruptcy court’s findings.

Thus, it did not abuse its discretion when it determined that Mr. Reznick

had committed fraud on the court and made false representations.

      2.    Ms. Rivera’s ownership interest in the Hospice is irrelevant.

      Mr. Reznick primarily argues that the bankruptcy court erred in

finding that Ms. Rivera owned fifty percent of the Hospice. He contends

that a physical therapist such as Ms. Rivera cannot lawfully own shares in a

California professional medical corporation.

      As far as we can tell, there is no dispute that Ms. Rivera is a physical

therapist who cannot own a majority ownership interest in a California

professional corporation. There is no evidence, however, that the Hospice

was formed as a professional corporation, as opposed to a simple

corporation. Further, Mr. Reznick offers no authority for the proposition

that only a “professional medical corporation” can conduct the business of

the Hospice.

      But we need not definitively answer these questions, because

Ms. Rivera’s purported ownership of the Hospice is irrelevant for the

purposes of appeal. We need only decide whether Mr. Reznick had

authority to file the bankruptcy petition on behalf of the Hospice. Even if

Ms. Rivera could not or did not own the Hospice, it does not necessarily

follow that Mr. Reznick had authority to file the bankruptcy petition.

      Mr. Reznick claims that Dr. De La Llana had authority, as “medical

director” of the Hospice, to file the petition. State law governs whether a

                                      21
corporation has authorized the filing of a bankruptcy petition. See Price v.

Gurney, 324 U.S. 100, 106 (1945). In California, a corporation generally acts

through its board of directors. See Cal. Corp. Code § 300(a). Mr. Reznick

has not established that a “medical director” can unilaterally decide to file

for bankruptcy on behalf of a corporation.

      3.     We do not consider Mr. Reznick’s new arguments and
             evidence on appeal.

      Mr. Reznick raises a host of new arguments and facts on appeal. He

contends that the attorney-client privilege and attorney-work product

privilege barred him from offering this evidence to the bankruptcy court.

This argument is patently frivolous, and we will not consider his new

evidence.

      For the first time, Mr. Reznick claims that he had a face-to-face

meeting with Dr. De La Llana in late October 2021 at which Dr. De La

Llana “in fact expressly ‘authorized’ him to represent the Hospice.” He

says that, at this meeting, he provided Dr. De La Llana with a retainer

agreement to expand his scope of legal services,8 and Dr. De La Llana

provided him with a retainer check and proof that he was an officer and

medical director of the Hospice. Mr. Reznick also refers to events that

occurred after he filed his notice of appeal.

      8The retainer agreement letter was offered in the bankruptcy court. It only
proposes to expand the scope of Mr. Reznick’s legal services to NobleQuest. It does not
mention the Hospice in any way, much less evidence the Hospice’s retention of
Mr. Reznick.
                                          22
      Mr. Reznick admits he did not raise these allegations and evidence in

the bankruptcy court, and therefore we will not consider them on appeal.

See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009) (we do not

consider arguments and allegations raised for the first time on appeal). We

may consider new arguments when: “(1) there are exceptional

circumstances why the issue was not raised in the trial court; (2) the new

issue arises while the appeal is pending because of a change in the law; or

(3) the issue presented is a pure question of law and the opposing party

will suffer no prejudice . . . .” Momox-Caselis v. Donohue, 987 F.3d 835, 841-

42 (9th Cir.), cert. denied, 142 S. Ct. 402 (2021). “The court will only excuse a

failure to comply with this rule when necessary to avoid a manifest

injustice.” Greger v. Barnhart, 464 F.3d 968, 973 (9th Cir. 2006) (cleaned up).

      We discern no manifest injustice here. Mr. Reznick claims on appeal

that he could not reveal this information because he was prevented from

doing so by the attorney-client privilege and attorney work product

privilege. Yet, contradictorily, he asserts that he is free to break the

privilege because there is no longer a risk of harm to his client after the

superior court dismissed a lawsuit by Care Plus, Inc. against him.

      Mr. Reznick’s position is untenable. He never raised the privilege

defense in the bankruptcy court, so he has waived that argument. See

Padgett, 587 F.3d at 985 n.2. Furthermore, his explanation as to why he is

now free to disclose the allegedly privileged information lacks any

credibility. Assuming the privileges applied, he may not disregard the

                                        23
privileges merely because he unilaterally determines that he and the client

will not personally face any adverse consequences. Finally, he has made no

showing that any of the basic information that was relevant to the OSC –

that he was retained by the Hospice and that he had been authorized to file

the bankruptcy petition – would have been subject to any privilege.

      Thus, we will not consider any of Mr. Reznick’s new arguments or

evidence in the first instance on appeal.9

      4.     Mr. Reznick’s remaining arguments are meritless.

      Mr. Reznick contends that the bankruptcy court erred in accepting

the U.S. Trustee’s argument that he had filed multiple other fraudulent

bankruptcy petitions. He claims that those cases were filed by a different

attorney and that he was unaware of any other related bankruptcy case.

      Mr. Reznick is misguided. First, the bankruptcy court did not

attribute the many filings to him. Rather, it noted that Dr. Hargrove-Brown

had been involved in seven bankruptcy cases and that Mr. Reznick had

been counsel on two of those cases. It is patently false for Mr. Reznick to

claim that the bankruptcy court attributed all of those filings to him.

      Second, as the U.S. Trustee pointed out, Mr. Reznick filed the

Hospice’s bankruptcy petition shortly after NobleQuest’s petition was

dismissed for failure to file documents. He knew that NobleQuest was

      9
        Even if we did consider the new allegations, we would reach the same
conclusion; the new information and exhibits do not convince us that the bankruptcy
court erred.
                                          24
“definitely” a related entity and admitted as much at the meeting of

creditors. Therefore, his continued insistence that it was proper for him not

to disclose any related cases is plainly wrong.

C.    The bankruptcy court did not err in referring Mr. Reznick to the
      disciplinary panel for violating Rule 9011.

      Finally, we note that Mr. Reznick does not directly address the

bankruptcy court’s ruling that he violated Rule 9011. He has waived any

objection to this ruling and, in any event, we discern no error.

      Rule 9011(b) provides (in summary) that when an attorney presents a

bankruptcy petition, the attorney is certifying that the attorney has

conducted a reasonable inquiry and that the petition is not being presented

for any improper purpose and has a sufficient basis in fact and law. An

attorney who presents a petition without proper authorization by the

debtor violates this rule. See, e.g., Winterton v. Humitech of N. Cal., LLC (In re

Blue Pine Grp., Inc.), 457 B.R. 64, 77 (9th Cir. BAP 2011) (affirming the

bankruptcy court’s ruling that the attorney violated Rule 9011 when he

proceeded with a frivolous bankruptcy case and “failed to undertake an

objectively reasonable inquiry into the facts and law supporting the

bankruptcy petition, relying instead on information others told him.”), aff’d

in part, vacated in part, 526 F. App’x 768 (9th Cir. 2013) (vacating sanction

amount).

      Mr. Reznick signed the Hospice’s petition, thus certifying that he had

undertaken a reasonable inquiry that the petition was not filed for an

                                        25
improper purpose and that the allegations therein had evidentiary support.

Yet, as discussed above, Mr. Reznick later admitted that he did not perform

due diligence to verify that he had authority to sign the petition, did not

know who owned or controlled the Hospice, had no evidence as to the

“legitimacy” of Mr. Patel’s and Dr. De La Llana’s representations, and

knew that the information he had been given was “bullsh*t” that did not

“pass the smell test.” His signature on the petition and continued advocacy

for the viability of the petition thus violated Rule 9011.

                               CONCLUSION

      The bankruptcy court did not err. We AFFIRM.

                                       26