In AZ, U.S. Trustee BK Subpoenas Wells Fargo

This bankruptcy order–signed today or yesterday, I believe, I didn’t bring it home but will update this post with a better cite—that someone sent over is interesting.  Apparently, in this bankruptcy case, the US Trustee intervened because of the debtor’s objection to Wells Fargo’s proof of claim and other issues.  The bankruptcy Trustee filed a motion requesting a subpoena for Wells to produce documents and produce a corporate representive to testify as to the documents.  The motion stated in part:

In the course of the United States Trustee’s role of supervising bankruptcy cases the United States Trustee has reviewed the bankruptcy filing[s] by Wells Fargo Bank, N.A. in this case,  as  well  as  the  Objection  filed  by  the  Debtors,  and  has  taken  note  of  conflicting  factual allegations associated with the status of the loan regarding Wells Fargo’s bankruptcy filing and papers including, but not limited to such filing and papers as are incident to proving a claim in bankruptcySpecifically, the conduct of Wells Fargo Bank, N.A. and its agents regarding seeking relief from the automatic stay in a bankruptcy proceeding to proceed with a potential foreclosure action under a state law forum.  

These  issues  directly  relate  to  administration  of  this  bankruptcy  estate  and  the integrity  of  the  bankruptcy  system.    The  United  States  Trustee  seeks  to  ascertain  whether  the conduct of Wells Fargo Bank, N.A.. deviated from the standards established by the bankruptcy code,  and/or  whether  its  particular  actions  threatened  an  abuse  of  the  bankruptcy  system  or  its procedures.  28 U.S.C. § 528(3)(G); 11 U.S.C. § 307; In re A-1 Trash Pickup, Inc., 802 F.2d 774, 775 (4th Cir. 1996) (Congress intended the United States Trustee to be an enforcer of bankruptcy laws).   See In re DePalma, United States Bankruptcy Court District of Arizona (emphasis mine).

Among other items related to the loan application and origination, the trustee sought:

All documents evidencing, relating to or referring to the secured status of the mortgage of the Debtors, together with any assignments and endorsements thereof.

The court signed the order:

The United States Trustee having filed a motion seeking authority for issuance of a

subpoena duces tecum compelling Wells Fargo Bank, N.A. to produce certain documents and to

submit a designated representative to an examination pursuant to Federal Rules of Bankruptcy

Procedure 2004 and 9016, and the court having found sufficient cause to grant the requested relief, it is:

ORDERED that the United States Trustee’ Motion for Entry of Order Authorizing the

Examination of and Requiring the Production of Documents by Wells Fargo Bank, N.A. pursuant to Fed. R. Bankr. P. 2004 and 9016 is hereby GRANTED; and it  is

FURTHER ORDERED that the United States Trustee is authorized to issue a subpoena compelling: Wells Fargo Bank, N.A. to produce and permit inspection and copying of those documents identified in Exhibit A attached hereto, upon not less than 10 days notice; and

(b)       Compelling Wells Fargo Bank, N.A. to appear for an examination, to be recorded verbatim by stenographic means, through one or more duly authorized representatives most familiar with the documents identified in Exhibit A, to give testimony under oath regarding the categories of documents and testimony identified in Exhibits A, upon not less than 20 days’ notice.

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