Tuesday, November 12, 2024
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Saying that it had received information that he mishandled trust accounts, the North Carolina State Bar won an order in Wake County Superior Court last spring blocking Hendersonville attorney J. Michael Edney from receiving or disbursing money to clients or other people and from serving in any fiduciary capacity until the bar completes an audit of the trust accounts.
A Superior Court judge on April 12 granted a consent order of preliminary injunction after the Bar argued in a court filing that “prompt action” was needed to “preserve the status quo and ensure that entrusted funds are not mishandled.”
Edney, who represented himself in court, and attorney Jennifer A. Porter of the state Bar consented to the order.
Although the Bar said Edney “desires to cooperate with the North Carolina State Bar,” it also said that in the period leading up to the order he had “failed to provide documents subpoenaed from him by the State Bar necessary for the State Bar to identify clients and transactions” so it could “determine whether all funds that should be in the trust accounts for his clients are present in the accounts,” the order’s findings of fact said.
Edney, who is also a sixth-term Henderson County commissioner and the board’s vice chair, called the order “six-month-old news” and said he would prefer that the Lightning “hold off on doing the story until the audit is completed and I can show everything is good.” He went on, however, to respond to questions the Lightning asked via text message.
The preliminary injunction, he said, was the “result of (a) normal routine audit (that) showed that funds had been taken from my attorney trust account by third parties. Those funds have been recovered. The Bar requested to do a complete audit and I agreed and have provided all documents and records they have requested. Now just waiting for them to complete their work. … I agreed not to do legal work involving trust accounts until everything was done.”
The four-page court order:
The last bullet, barring him from fiduciary-related parts of a legal practice, does not mean he cannot work at all, he said.
“Office and practice continue as normal,” he said.
Katherine E. Jean, counsel for the North Carolina State Bar, responding to the Lightning’s questions via email, said last week that the order is still in effect and that there are no other filings subsequent to the April 12, 2023, order.
“Grievance investigations are confidential and documents in the possession of the Grievance Committee relating to grievance investigations are not public records,” she said. “It would not be appropriate for the State Bar to comment on an ongoing investigation.”