A federal bankruptcy judge has ruled that former Maryland health secretary and diet guru Neil Solomon cannot shield all of his retirement income from the claims of three former patients who have sued him, alleging that he lured them into sexual relationships.
U.S. Bankruptcy Court Judge E. Stephen Derby said yesterday that if Dr. Solomon refuses to draw income from his $1.5 million retirement savings or takes too little in order to minimize payments to his accusers, the court may determine a "reasonable" income that could then be tapped to pay them.
The judge said his ruling "will protect [the women's] reasonable expectations and frustrate excessive asset protection" by Dr. Solomon.
The ruling was a partial victory for the former patients, who are seeking compensation in bankruptcy court because their civil suits against Dr. Solomon were blocked by his Chapter 13 bankruptcy filing.
The court ruled against the women on two other motions, including one that would have converted the case to a Chapter 7 filing more favorable to the women. Further motions will be discussed at a May 19 hearing.
Edward C. Dolan, the women's attorney, said he was gratified by Judge Derby's ruling on Dr. Solomon's retirement income. That victory "will ultimately mean more dollars" than the issues on which they lost, he said.
Alan M. Grochal, attorney for Dr. Solomon, could not be reached for comment.
Dr. Solomon filed for Chapter 13 bankruptcy protection Sept. 20 after three former patients and the husband of one sued him for damages in Baltimore Circuit Court.
To protect their privacy, the court sealed their names. Their suits in state court were automatically suspended when Dr. Solomon filed for bankruptcy.
On Oct. 27, a state panel permanently took Dr. Solomon's medical license after he admitted to having sex with at least eight patients in the past 20 years.
In his proposed bankruptcy plan, Dr. Solomon, 62, listed almost $2.2 million in assets. But he claimed that all but $44,000 was owned jointly with his wife or held in retirement savings and therefore beyond his accusers' reach under Maryland law.
He has admitted his liability to the former patients, however, and proposed a bankruptcy plan that would pay them a total of $750 a month for five years -- $45,000 in all -- from his state pension and interest income.
On Jan. 1, Dr. Solomon reported that his income had fallen to $3,260 a month after losing his medical practice. His attorney has said that Dr. Solomon's living expenses have also fallen by an unstated amount from the $14,000 a month he had previously reported.
The difference between his income and whatever expenses remain, Dr. Solomon told the court, is being paid from voluntary withdrawals from his retirement savings.
The former patients argued that even if the principal in Dr. Solomon's retirement savings is exempt by law from their claims, the interest income he is taking from those savings to meet his monthly living expenses should not be exempt. It should be counted as disposable income and used to calculate the monthly payments to his accusers.
Judge Derby agreed yesterday, and said the wide gulf between the former patients' claimed damages and Dr. Solomon's "relatively modest" proposal for compensating them raises "fundamental public policy questions about the function and purpose of Chapter 13."