TRAVERSE CITY — A prominent Traverse City attorney’s law practice remains open after he sought bankruptcy protection amid a lengthy and potentially costly legal battle with a former client.
Clarence Gomery, of Gomery Law Offices, said his April 2 bankruptcy filing is a “separate matter” from a 13th Circuit Court jury’s verdict that left him with a nearly $350,000 tab.
“All it is, is a reorganization and the practice will go on,” he said.
The filing could impact Gomery’s long-running dispute with former client Fred Topous Jr., a registered sex offender who won $57 million from the state lottery.
An acrimonious, six-day civil trial last May ended with jurors finding that Gomery defrauded Topous in a business deal for the former Mitchell Creek Golf Course property off Three Mile Road. Thirteenth Circuit Court Judge Thomas Power later ordered Gomery to pay about $315,000 in sanctions for Topous’ attorney fees, in addition to other costs.
But Gomery’s bankruptcy filing puts any payments on hold, at least temporarily.
Topous’ attorney Christopher Cooke said sanctions in fraud cases can’t be discharged in bankruptcies.
“We intend on filing adversarial action,” he said.
Paul Bare, a Traverse City attorney who represents Gomery in the bankruptcy case, said his client’s Chapter 13 filing allows for a financial reorganization.
“In terms of the reorganization, Mr. Topous would of course be treated as any other creditor,” Bare said. “Those matters will be resolved in a bankruptcy proceeding.”
The bankruptcy runs parallel to Gomery’s appeals against the jury’s judgment and the grounds for the sanctions.
Cooke argued in the trial that Gomery manipulated an operating agreement to give himself a 50 percent stake in the Mitchell Creek property.
Jurors found Topous owned the property and Gomery violated rules of professional conduct by entering into a business partnership with a client.
Liisa Speaker is a Lansing-based attorney who represents Gomery in his case before the Michigan Court of Appeals.
She declined to speak on specifics, but she said she hopes the automatic stay from the bankruptcy is lifted so the appeals can move forward.
“There are legitimate and viable issues for appeal and we’ll pursue everything we can,” she said.
Gomery said his practice will remain open and continue to serve clients.