Bankruptcy Trustee: Rothstein Partner Adler Is Broke and Owes IRS

Instead of a big showdown in court with big-time witnesses like U.S. Sen. John McCain, former Gov. Charlie Crist and Broward Sheriff Al Lamberti, Russell Adler and the bankruptcy attorneys representing his former law firm settled the clawback suit today with little fanfare.

The Rothstein Rosenfeldt Adler bankruptcy trustee sued Adler last February for $1.2 million in clawbacks they claimed the attorney had received in dirty and undeserved money from his former partner, Scott Rothstein, who is facing 50 years in federal prison for his town-rocking Ponzi scheme involving hundreds of millions of stolen dollars.

rothsteinadler1.jpg
Adler and Rothstein before the fall
​Adler's flamboyant (and able) attorney, Fred Haddad, was calling for a trial in which he was promising to bring in public officials like McCain, Crist and Lamberti to show that his client wasn't the only one who didn't realize that Rothstein was a far-flung fraud.

All of those officials were friendly with Rothstein and accepted huge sums of money from him and his firm in campaign contributions. "Russell did nothing wrong and I expect to go to trial and be vindicated very quickly," Haddad told the Sun-Sentinel recently. "We're looking forward to a trial."

Yeah, not really. Today's Adler agreed to pay $350,000 to the bankruptcy court, a number that balloons to $500,000 if he fails to pay within 30 months.

It might be seen as a victory for Adler, considering the disparity between the settlement amount and the sum bankruptcy lawyers claim he received from Rothstein. Bankruptcy lawyers wrote in court documents filed moments ago that they agreed to settle because they have little hope that Adler and his wife, Katie, have the financial wherewithal to pay much of anything.

Not only is Adler broke, court documents allege, but the IRS, which gets first dibs on his assets, is coming after him for $234,000 in liens "or other action," court documents allege. On top of that bankruptcy attorneys wrote that they were concerned Adler could face disbarment, which would cripple his ability to pay in the future, and possible criminal charges related to his relationship with Rothstein.

"Critical to determining settlement was a detailed analysis of the Adlers' current financial condition, which based upon mediation related financial disclosures revealed that the Adlers have no existing bank, securities or other accounts upon which to execute, no equity in their home, leased vehicles and no other liquid non-exempt assets that could be used to satisfy any potential judgment," the attorneys wrote. "Further, it appears as if the Adlers may be subject to an IRS notice of lien or other action in an approximate amount of $234,000 and Mr. Adler could be facing other types of exposure in potential Florida Bar or criminal proceedings."

Adler released a statement to the Sun-Sentinel: "I did nothing wrong and was eager to go to trial and be vindicated. The settlement was purely a business decision that will put this case behind us and let me focus on my family, my future and the pursuit of justice for my clients."  

Inside photos and read the terms of the settlement from the court documents.

In considering the circumstances, and taking into account the nature of the claims against the Adlers, the potential defenses available to such claims and the risks associated with litigating this matter, the Trustee believes that the terms of the Settlement are favorable to the
estate. Critical to determining settlement was a detailed analysis of the Adlers' current financial condition, which based upon mediation related financial disclosures revealed that the Adlers have no existing bank, securities or other accounts upon which to execute, no equity in their home, leased vehicles and no other liquid non-exempt assets that could be used to satisfy any potential judgment. Further, it appears as if the Adlers may be subject to an IRS notice of lien or other action in an approximate amount of $234,000 and Mr. Adler could be facing other types of exposure in potential Florida Bar or criminal proceedings. Thus, the Trustee could have spent a significant amount of money to prepare for and conduct a lengthy trial which he believes would have resulted in a favorable jury verdict, but the likelihood of a successful collection on any such judgment would have proven difficult.

rothsteinadler2.jpg
Adler and Rothstein on NYC trip. Among the clawbacks was a loan for Adler to buy an apartment in the city.
​12. Pursuant to the Settlement, and as more fully described in the Settlement Agreement, the Adlers agree to entry of a non-appealable final judgment, joint and severally, in the amount of $500,000 (the "Judgment") against them in the Adversary Proceeding. In order to pay the Judgment and in consideration of the Trustee agreeing to stay execution of the Judgment
provided there is no default under the Agreement, the Adlers agree that:

a. Russell Adler shall provide the Trustee with a recordable attorneys charging lien of 50% of any attorneys fees recoveries (net of referral fees) obtained by Adler on all lawsuits that Adler is prosecuting on behalf of clients that were originated while Adler was an employee of RRA, regardless of when the case was filed.

b. Russell Adler shall provide the Trustee with a recordable attorneys charging lien of 15% of any attorneys fee recoveries (net of referral fees) obtained by Adler on all lawsuits that Adler began prosecuting on behalf of clients originated subsequent to Adler's departure from RRA.

c. Russell Adler shall forthwith liquidate his IRA, (which would otherwise be an exempt asset and the Adlers' only other exempt asset excepting their homestead), presently valued at approximately $90,000 and turnover to the Trustee all proceeds from the IRA after payment of any taxes and/or penalties due upon its liquidation.

d. The Adlers have 30 months, from the date of approval of the Agreement to prepay the Judgment in the amount of $350,000.

rothsteinadler2.jpg
Rothstein with the Adlers
​e. The Judgment shall be non-dischargeable pursuant to the provisions of 11 U.S.C. §523(a)(4) and (6) in the event that either or both of them file a future bankruptcy, and that the Adlers are judicially estopped from asserting otherwise.

f. The Adlers are to provide the Trustee with a joint financial statement (the "Financial Statement") by January 31, 2011, to be followed by a deposition on their assets and liabilities conducted by Trustee's counsel. The Financial Statement shall be certified by them as true, correct, complete under penalty of perjury. Within 6 months from the date the Court approves the Agreement the Trustee discovers that the Adlers' net worth was materially greater than
that revealed prior to or at the Janurary 26, 2011 mediation and the Adlers owned an assert with a value of $10,000 or greater that was not disclosed by them prior to the January 26, 2011 mediation the Trustee may take all action he deems appropriate to obtain custody and tile of said asset for the benefit of the RRA Estate, exclusive of the settlement amount.

13. Additionally, upon the occurrence of the events described in paragraph 12 above,
and an order of this Court approving the Settlement Agreement becoming a final, non-appealable order, excepting the Judgment and the Settlement Agreement, Adler will be released from any and all liability to the Trustee, RRA or the Debtor's estate, and the Trustee and the Debtor's Estate will be released from any and all liability to the Adlers.

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59 comments
Popelaw24
Popelaw24

 Organized content is the best way to display or post an article, thank you for making it easy to digest your post.

Florida Probate
Florida Probate

In my opinion court decision is right. In some cases it may happen.

Guest
Guest

Katie Adler looks good in that pic.

Jcrimes76
Jcrimes76

the real story here is that stettin and his lawyers billed hundreds of thousands of dollars on this case and in the end, get nothing (because russell is uncollectable).

most lawyers usually delve into the collection issue while simultaneously fight on the merits. apparently, that wasn't done here.

Guest
Guest

It's baffling how this man still is allowed to practice law. He claims to not have been aware of Rothstein's crimes? If that's so, then it was wilful ignorance. If not prision then he should be stripped of all he has and made to start over.

Anon33024
Anon33024

I understand Russ Adler is facing a few more lawsuits associated with his Rothstein scamming. The trauma and depositions and bills and losses won't stop for a long time. A different kind of payday

Christy
Christy

OK Galleria area residents.East Bayview and Holiday park! This Pervert was at Bayview Elementary taunting kids with Lollipops and toys. (heard it from neighbrhood kids) He was arrested at Holiday Park. Beware and educate your kids just a matter of time before he is out again..Read story

http://www.sun-sentinel.com/ne...

http://www.sun-sentinel.com/ne...

Christy
Christy

A key member of the infamous Miami-based Black Tuna Gang, the biggest U.S. marijuana-smuggling operation of its time, was arrested by the U.S. Marshals Service Thursday morning in West Palm Beach -- more than 31 years after he skipped out of a federal trial.Mark Steven Phillips, 62, was captured in his rented apartment at Century Village, a senior living community where he had been living in recent months, law enforcement officers said.

Read more: http://www.miamiherald.com/201...

DeathFrog3
DeathFrog3

@ C1

I dont know if you"re around but I'm guessing its a guy you know, Stephen Phillips of the black tuna gang was just arrested in West Palm, The article is in the SS

skydove
skydove

"Lying isn't detestable so much for itself but because people wind up believing the lies."Marcel Arland

Guest
Guest

The true hypocrite is the one who ceases to perceive his deception, the one who lies with sincerity. ~André Gide

TwoCents
TwoCents

My guess is Rothstein is getting a monthly allowance, a little 3/2 somewhere in BFE and a lot of glances over his shoulders.

Christy
Christy

Scott Rothstein is getting 3 square meals a day, shelter and medical for the next 50 years.

herbcaenentertainmentaward
herbcaenentertainmentaward

It's just the beginning. These guys robbed international banks. It was an inside job with help from an employee of the bank. A rather large bank account heist. I would guess the banks are on the line for the missing money. Then they stalked and terrorized the person they robbed since 2005 on a daily basis. It's still going on. Stay tuned.

Parkland man
Parkland man

Hey i agree with the bottom feeder the florida bar protects there own it's almost like being a cop how many speeding tickets would you give to your mother,give me a break,if your a cop and your wife steals something from publix would you arrest her he'll no,we'll thats what this bs fla bar is like,go get em feds.

bottomfeeder hater
bottomfeeder hater

the florida bar is a joke a bunch of no good lazy bastards only protecting lawyers. the bar also has non lawyers on it also. they should indict every attorney on the florida bar. you have florida lawyers stealing, cheating, money laudering etc and all these idiots do is sanction them and send them to school to learn accounting and ethic lessons. they should line each one up and cane them. florida bar is a f-----king joke and has no credibilty

Ddean
Ddean

Bunch of high flyers on other peoples money. Typical South FL shakers and bakers!

Where will it come from?
Where will it come from?

So Adler gets off for $350 because he is broke and has a $250K tax lien - because they expect him to be able to earn it. Meanwhile poor Kimmie has nothing, no house, no car, a $10M tax lien and they are still trying to squeeze $1.2M from her -- from her Bartender salary? Where is the reality here?

Virgil Starkwell
Virgil Starkwell

I'm shocked that a guy who reportedly settled some big cases over the years has very little to show for it.

"It is preoccupation with possessions, more than anything else, that prevents men from living freely and nobly." Bertrand Russell

Ttruth6
Ttruth6

"Today's Adler agreed to pay $350,000 to the bankruptcy court, a number that balloons to $500,000 if he fails to pay within 30 months"

What a joke. How much has this guy got out of the country? Another one walks a way with a slap on the wrist.

Watch the same will happen to Levin and others. A mere slap on the wrist. No wonder this goes on and on and on - and will continue. The consequences don't equal the deeds.

Richard Keys
Richard Keys

I can imagine that Russ is whispering to Katie

"Just smile dear, the buffoon is paying me an absolute fortune".

I hope it was worth it.

Nucky Thompson
Nucky Thompson

No doubt about it, your man Rothstein could certainly strike a pose . I wonder if he's still smiling right now .... hopefully he's just grimacing

unowho
unowho

Adler is far from broke on paper maybe but nobody is that stupid not to have hidden money put away in a safe place.Even people who are legitimate have money hidden for various reasons ..Ofcourse it works to his benefit to say he is broke for sympathy and make him look like the victim to the people he owes money too and the criminal case against him ......."Adler broke".....KEVINK!!!

Obermann
Obermann

Good work, Pulp. Did you get the pulitzer yet? And what is happening with those other scoundrels, Levin, Levy, Rosenfeldt and Szfranski? Did they start a new law firm - good name for one.

It's been about 500 days since you blew up the Rothstein scheme and still no disbarments. Let's everyday do a post until we make a laughing stock out of the Florida Bar.

Anonymous
Anonymous

That NYC pic is surreal, Ed Hardy shirt and all. God I love this sh*t!

Christy
Christy

Ms. Katie Adler, HeadmistressThe idea for starting a Charm School first came to Ms. Katie as she contemplated the best way to teach her own two daughters about poise, confidence, manners and grace.

Guess Ms. Katie forgot to teach her husband about manners and grace.

parkland man
parkland man

We need one more R to fall in RRA, LOL lets hope it comes fast that will be the last of rra lawyers then they get the smaller lawyers in that bs firm,what a pac of loosers sueing loosers,what happened to all the overtime lawsuites that scott's mother was working on,mabey he's fat sister can help her with them,scott bought kimmie lips,tits and ass,why did he leave his mother and sister so ulgy,adler's wife is ready to move on,he hasent banged her since the money stopped over a year ago,looks like she got her lipps tits and ass ready to go.Parkland is a great place for that mabey she can hang out with stacy,and show her the ropes alittle,adler should listen to the rolling stones tonight a great song is, you can't always get what you want.but you might get what you need. A divorce ,disbarment, jail time, poverty ,all for being a sueing lawyer!!!!!!!!!!!!!!!!!!!

CourtHouse Mouse
CourtHouse Mouse

Russell Adler is representing Larry Seidlin right now in North Palm Beach probate court. So Haddad and Adler didn't sign moments ago. This is a scheduled release of information.

AnonLawer
AnonLawer

Was in court yesterday and learned that Haddad has been in trial in Boston for a week. He probably doesn’t know anything about this. I wonder who has the balls to tell him.

parkland man
parkland man

Hey adler i wouldn't worry about the family so much you can kiss your wife goodbye ,she's gone she will find a new lawyer that is stealing from people like you were to take care of her just fine shes hot,it wount take long look at kimmie lol No women want's a broke worn down disbared lawyer,say goodbye to hollywood baby easy come easy go,send her over to bellasara in parkland she might find somebody over there,enjoy poverty and the time you spend in prison.

Steve-O
Steve-O

Was Katie Adler a former BOVA girl? If so, she must have been the dumbest one.

Anonymous
Anonymous

Lawyers pay dues to the Bar. The Bar is only there to defend these corrupt lawyers and create the illusion that some kind of legal system is in place. Look who was chair of Ethics with the JQC. Scott Rothstein. Does that tell you everything you need to know. This illegal system has got to go. Don't know how, but it has to be dismantled.

P_Nis
P_Nis

Why hasn't the bar filed an emergency motion to suspend this MF??? Why does this guy still have a license? Florida Bar, why don't you go after this MF with the same voracity as you do Hispanic attorneys?

Just another instance of the powers that be at the bar protecting fellow tribe members. Here's my question, if the bar is charged with watching over attorneys and prosecuting them at will (fair or not), who's watching the Bar?

unowho
unowho

Last I heard C1 was headed to Morroco for business....LOL.....JK

Christy
Christy

DF3 Great picture of Phillips in Miami Herald read posted above.

unowho
unowho

MC....If only you could put in the new lyrics: .".Prison love."..Davey dont hurt me..dont hurt me..no more..".Prison love"..Davey dont hurt me..dont hurt me..no more....Whoa ohhhh ohhhh ohhhh.ohhh. Whoa ohhh ohhh ohhh..............

Linda
Linda

I still think you're an illiterate ignorant slug.

Abouttime83
Abouttime83

You actually think anybody involved in Rothsteins scam has no money? Especially "poor" Gold Digger Kimmmmmmie give me a F#(king break with all the Jewellery Money and Gifts Scottie was throwing at her she probably made out better than anyone close to her so called Jackpot (SR)...another KEVINK!!! ..or..." ka chink ..kachink"..kachink..kachink.....

WhiskeyForMyMenBeerForMyHorses
WhiskeyForMyMenBeerForMyHorses

I love Bertrand....One of my favs

"Education should aim at destroying free will, so that, after pupils have left school, they shall be incapable, throughout the rest of their lives, of thinking or acting otherwise than as their schoolmasters would have wished. . . . Diet, injections, and injunctions will combine, from a very early age, to produce the sort of character and the sort of beliefs that the authorities consider desirable, and any serious criticism of the powers that be will become psychologically impossible." Bertrand Russell: 1953

Goldilocks
Goldilocks

Shocked, really? Or shocked, as in Casablanca? ("Shocked! Shocked! - that gambling is going on here" - Captain Renault)

Dustin Mifartz
Dustin Mifartz

Levin already negotiated his deal.He is going to pay a small pecentage of the the proceeds from selling his properties.Problem is, he has no equty in them.He agreed to pay a percentage of nothing.Whle the feds were sniffing Scottys balls, he was packing away all of his assets,selling jets and packing his cars into containers and shipping them to Japan.No issues in his camp.

Leno
Leno

You mean they have kids who will have the pain of knowing what a scumbag their dad is? Some people shouldn't be allowed to procreate!

natasha
natasha

Linda, parkland man is not ignorant. You, on the other hand, are a stupid cunt and this describes you:

"Education should aim at destroying free will, so that, after pupils have left school, they shall be incapable, throughout the rest of their lives, of thinking or acting otherwise than as their schoolmasters would have wished. . . . Diet, injections, and injunctions will combine, from a very early age, to produce the sort of character and the sort of beliefs that the authorities consider desirable, and any serious criticism of the powers that be will become psychologically impossible." Bertrand Russell: 1953

Thank you to WhiskeyForMyMenBeerForMyHorses

unowho
unowho

I dont know why Disqus converts "unowho" to my first moniker I used over a year ago !!!hmmm....

Goldilocks
Goldilocks

Regrettably, I think the time lag allowed (enabled, in the purerst sense of the word) many of them to >uh< make "arrangements", too.

Goldilocks
Goldilocks

Wow. You, Natasha, are obviously an enlightened free-thinker to use words that the rest of us sheep would consider to be reprehensible, malicious and disgusting. Thanks for your two cents' worth.

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