iPayment Loses Motion in Bankruptcy Case Brought by U.S. Bankruptcy Trustee

LOS ANGELES, CA – iPayment, Inc. today was handed a defeat in the case of ITSV Inc. v. iPayment et. al., pending in the United States Bankruptcy Court, Central District, Los Angeles, California. At a hearing today in the Courtroom of Bankruptcy Judge Vincent Zurzolo, Greenberg & Bass, iPayment’s long-time attorneys and present counsel defending iPayment against the fraud claims brought against the company and its principals by Howard M. Ehrenberg, United States Bankruptcy Trustee, were disqualified from further representation when the Judge ruled that they were in violation of the Rules of Professional Responsibility and the California Business and Professions Code by representing iPayment after they had previously represented adverse party, ITSV.

The Motion to Disqualify was successfully brought by Special Counsel to Trustee Ehrenberg, Pratter & Young, Attorneys, who alleged that the conduct of iPayments lawyers was a violation of the lawyer’s Canon of Ethics. Judge Zurzolo agreed and ordered their immediate removal. iPayment is now in search of new lawyers.