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Bankruptcy process 'hijacked', says Hall

Julian Hall's bankruptcy case attracted a number of high-profile lawyers and MPs to the public gallery at Supeme Court. He is pictured here on the left, chatting with Zane DeSilva MP and Michael Scott MP outside the court.

Julian Hall believes attorneys for an elderly widow, from whom he was once accused of stealing, are contriving to keep him bankrupt in a case of "blacklisting of the worst kind".

He made the claim as he asked Chief Justice Richard Ground to lift the bankruptcy order he has been under since January 2000.

The former PLP politician remains barred from practising as a barrister or standing for Parliament while it is in force.

He claims that until it is lifted, he will be prevented from earning enough to pay off his $3.3 million in debts, despite working as a legal consultant to clients including Government.

His request is being opposed by Official Receiver Stephen Lowe and lawyers for two of his creditors — the executors of the estate of his former employer, lawyer Charles Vaucrosson, and the receivers of the estate of Mr. Hall's client, wealthy widow Betty McMahon.

Mr. Hall's opponents told the Chief Justice on Friday that he has not paid a cent of his debts since being declared bankrupt. They have also accused him of failing to comply with requests to disclose his finances and assets — a claim he denies.

There is a long history of litigation between those acting for Mrs. McMahon, who has been deemed unfit to handle her own affairs under the Mental Health Act since 1996, and Mr. Hall.

Civil proceedings against him in 1997 led to a court order that he should pay Mrs. McMahon $1.6 million.

A Police investigation later resulted in Mr. Hall being charged in 2002 with stealing more than $500,000 from the elderly woman. He was acquitted after a high-profile Supreme Court trial in 2005.

Yesterday, he accused attorneys from law firm Mello Jones and Martin (MJM), which represents the receivers of Mrs. McMahon's estate, of influencing a report by the Official Receiver asking for him to remain bankrupt until he provides full disclosure of his finances.

He claimed the MJM lawyers are acting with an "improper motive" — to prevent him becoming trustee and executor of Mrs. McMahon's estate when she dies.

He told the court he believes they want to keep him bankrupt for the full 15 years possible under the Bankruptcy Act because they believe him guilty of "great misdeeds" despite being cleared of theft.

He told the Chief Justice the Official Receiver had been "kidnapped" and "hijacked" by the MJM lawyers.

"Is it the object of the Act to keep this man dangling for 15 years, by which time he can be discharged (but) by which time he could be on Court Street, cap in hand, getting high?" he asked.

In an apparent reference to MJM attorney Alan Dunch, who once handled the case, and Saul Froomkin QC, representing the receivers of the McMahon estate in the bankruptcy hearing, he claimed: "This whole process was hijacked, taken more than by at least two if not one and a half partners in Mello Jones and Martin for the improper motive of making sure that I would never ever be in a position to serve as executor or trustee of this lady's estate.

"Or, to make sure that I would never ever — in punishment for my great misdeeds which the jury accepted never happened — be allowed to rejoin this august club the Bermuda Bar. It really smacks of blacklisting of the worst kind. It goes beyond Victorian, what was done."

He also complained that instead of bringing the statutory review of his bankruptcy status before the Chief Justice as soon as possible, the Official Receiver dragged the matter out for three and a half years longer than necessary.

"That is potentially three and a half years of lost income... which nobody would be surprised to hear, would be significantly higher than the $1.6 million being claimed by the petitioning creditor (the McMahon estate)," he claimed.

The case continues.