The Littlest Brother

Sitting in the boardroom of Bethesda’s Linowes and Blocher, Paul Sweeney reflects on growing up the youngest of three brothers in Clinton, Conn.

“When we were swimming, [my brothers] would say, ‘That cliff looks like a good thing to jump off of—let’s have Paul go first just to make sure it’s safe.’ I remember bicycling down this embankment and launching myself into the air at age 4 or 5 because they suggested it would be fun.”

Sweeney, 44, specializes in bankruptcy litigation and commercial disputes. He made his mark in May 1998 when he became the bankruptcy trustee for Inphomation Communications, the Pikesville-based company that owned and operated the Psychic Friends Network.

In its heyday, the Psychic Friends Network made roughly $3.99 a minute when viewers dialed a 900 number that flashed on their television screens; its gross revenues were in excess of $110 million. But things started to unravel in 1996. AT&T, and then MCI, in charge of the 900 connection service, mishandled the call traffic as well as the billing and collection of revenue for Inphomation calls.

One of Sweeney’s primary roles: pursuing breach of contract actions against AT&T and MCI, and charging MCI with a violation of the Racketeer Influenced and Corrupt Organizations Act. (Sweeney alleged a pattern of racketeering activity and mail/wire fraud; that case settled out of court.)

“The first order of business was to make sure I had my hands around this thing,” says Sweeney, whose ninth-floor office was filled with files from the case. “And it was impossible because usually you have a business where you have a product, but here the product was fluffy. You didn’t have inventory.”

His client’s reputation didn’t help matters. “I was up in New York at the MCI bankruptcy,” Sweeney says. “[The Federal Bankruptcy Court in New York City] is supposedly the crème de la crème of courts, and I’m the trustee for the Psychic Friends Network complaining about the fraud of MCI? You could hear the courtroom break out in a chuckle.”

Don’t tell Sweeney the jokes; he’s heard them all. “People would say, ‘You know how much money I owe’ or ‘You should have seen this coming.’”

He didn’t let the stale jokes get him down. “I find my field exciting,” he says. “I find trying to create order out of chaos to be challenging. It’s not that I’m necessarily combative, but I enjoy a good challenge.”

Sweeney worked on the case for four years before settling with AT&T for $4.5 million and MCI for a claim of $7.5 million. In the end, those early childhood experiences helped. “I told my brothers when I left New York having reached a settlement in the MCI bankruptcy, ‘I want to thank you for making me as belligerent and stubborn as possible.’ I think my childhood really helped me form my philosophy of life, which is, ‘They may be bigger, and they can pound on you, but that doesn’t necessarily mean they are going to win at the end of the day.’”