The North Carolina State Bar has withdrawn its motion to hold Raleigh lawyer A.P. Carlton in civil contempt for allegedly violating an injunction against several debt settlement companies accused of swindling state residents.
The bar had asked Business Court Chief Judge James Gale to hold Carlton and his client at the time, World Law South, in contempt in early December 2014. WLS dissolved in February after about a year and a half of operation.
Carlton incorporated WLS for its parent company, World Law Group, which the bar asserts is subject to an injunction that a Wake County Superior Court judge has issued against debt settlement companies Orion Processing and Swift Rock Financial, which do business under various World Law names.
The bar and state Attorney General’s Office are suing Swift Rock and Orion for allegedly masquerading as law firms and duping residents mired in credit card debt into paying advance fees to enroll in a debt adjustment scheme. Carlton also briefly represented Swift Rock.
The bar argued that Carlton had helped World Law Group create WLS after the injunction was issued in an attempt to circumvent the court’s order. Carlton and his attorney, Daniel Boyce of Nexsen Pruet in Raleigh, contended that the contempt motion was a retaliatory effort to have Carlton removed from the case
“Unfortunately, it appears there may be ulterior motives for the Attorneys in this case to have sought judicial intervention against Mr. Carlton personally,” Boyce wrote in response to the contempt motion
In the wake of that motion and the dissolution of WLS, Carlton resigned as secretary and general counsel of the company and withdrew from the case in April. He agreed in an affidavit that served as the basis of the July 24 contempt motion withdrawal that he would obey the terms of the injunction.
Carlton, who did not admit wrongdoing, also stated that he would make himself available to be deposed by the bar and attorney general on any non-privileged information concerning WLS and the other defendants in the case.
The bar agreed that it would not bring further contempt proceedings against Carlton related to actions that he took in the case before he withdrew as WLS’s attorney.
Katherine Jean, an attorney for the bar, declined an interview request.
Boyce said in a phone interview that the withdrawal of the contempt motion against Carlton “had been a long time coming.”
“We’re pleased that we were finally able to get the matter straightened out,” he added. “We are fully convinced that he never intentionally violated the order and we appreciate the state bar realizing he had acted appropriately at all times.”
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