Bank: Lexington judge failed to disclose appointed receiver was her impeachment lawyer

Lawyers for a major U.S. bank are asking a Fayette circuit judge to recuse herself from presiding over a property dispute after they say she failed to disclose that the receiver she appointed to handle the case is also representing her in ongoing impeachment proceedings.

Lawyers for Bancorp, a Minnesota-based lender aiming to recoup money on several dilapidated properties in Lexington, claim Fayette Circuit Judge Julie Muth Goodman did not inform them that James Frazier III, acting as receiver in their case, is also representing the judge as she fights an effort by the Kentucky General Assembly to impeach and remove her from office, according to a March 30 filing.

“It is similarly reasonable to doubt that Judge Goodman will impartially listen to objections made by parties in this case to attorney Frazier’s actions, when Judge Goodman is currently trusting attorney Frazier and his judgment in arguably the most important case of Goodman’s career,” wrote Allison M. Bortner, Drake Staples and James Irving, lawyers in the civil suit.

Bancorp is asking Goodman to restore its liens on several Lexington properties and confirm the borrowers still owe money to the bank.

Frazier, in an interview Thursday with the Herald-Leader, noted that he is not a party in the case — neither defendant nor plaintiff — and called the recusal motion a “political diversion” from the real issues involving safe homes for families.

A receiver is appointed by a judge to manage distressed assets, including bankrupt companies and foreclosed homes, when the owner loses possession for failing to pay creditors. The receiver works with lenders and the judge to determine how best to salvage value from the assets.

Frazier is a real estate lawyer by trade, and he serves as master commissioner of Fayette County Circuit Court. In that role — which prompted his appointment as receiver in the Bancorp case — he conducts court-ordered property sales in cases such as foreclosures.

Bancorp’s lawyers did not object when Frazier was first appointed to the case in February 2025. But beginning earlier this year, Frazier has also been one of several lawyers defending Goodman against state lawmakers’ unprecedented effort to remove her from office.

A former state lawmaker filed an impeachment petition against her in January, alleging she abused her position, and the Kentucky House of Representatives voted last month to impeach her. A Franklin Circuit Judge voided her impeachment documents this week, but a Senate committee is scheduled to hear the case against her on April 16 anyway.

Goodman is asking the Supreme Court to halt the impeachment proceedings, arguing her due process rights are being violated.

Goodman did not respond to a request for comment Thursday.

Bancorp lawyers seek recusal

Goodman is presiding over a mortgage foreclosure involving several West Lexington apartments, totalling up to 400 units. Bancorp filed suit in January 2025 against the apartment owners, Creekside Holdings and Cambridge Homes Holdings, claiming nonpayment of debts.

As part of the litigation, Frazier was appointed by Goodman to serve as receiver, acting as a third party to take control of the properties while the suit moves through the courts. Frazier is paid $550 an hour for the work, and it goes to back to the court system rather than his law firm, he said.

Frazier is also CEO of the Lexington law firm McBrayer, and in that capacity is representing Goodman in her impeachment proceedings.

Bancorp’s lawyers claim ethics standards required Goodman to recuse herself in their case unless she had disclosed her other relationship with Frazier and the lawyers were amenable to continuing, which they say did not happen.

They also noted she has recused herself in at least three other cases involving McBrayer.

“Any reasonable observer apprised of these facts would question, for example, Judge Goodman’s impartiality in reviewing the objections in this case to attorney Frazier’s and the McBrayer Firm’s fees, when she is personally and simultaneously paying invoices to the McBrayer Firm in the impeachment proceedings,” attorneys said in their affidavit filed March 30.

Frazier says disclosure was not necessary

Frazier told the Herald-Leader that because he is not a party in the case, and is merely a receiver, Goodman did not have to disclose that he was representing her in an unrelated case.

Still, one day after Bancorp’s lawyers requested a recusal, Frazier resigned as receiver.

Frazier said with the amount of time it would take to settle the recusal motions, he wanted to resign to help solve the litigation in court, which would help restore heat, water and sewer to homes.

“It’s just not worth it,” Frazier said about staying on the case. “It’s what’s best for the people out there to help fix families’ homes.”

Frazier gave an example of a family using charcoal grills inside to help heat their homes. The case had made significant progress, he said, and he did not want to prevent it from moving forward.

“It is taking attention away from the families,” Frazier said.

Despite Frazier’s resignation, the case will be on pause until the Kentucky Supreme Court decides whether to appoint a special judge. After that ruling, a replacement will be named for Frazier.

It’s unclear whether the attorneys will drop their motion now that Frazier has resigned. Two of Bancorp’s lawyers — Irving and Staples — declined to comment on the case. The third, Bortner, did not respond to a request for comment.

This story was originally published April 3, 2026 at 5:00 AM.

Taylor Six

Lexington Herald-Leader

Taylor Six is the criminal justice reporter at the Herald-Leader. She was born and raised in Lexington attending Lafayette High School. She graduated from Eastern Kentucky University in 2018 with a degree in journalism. She previously worked as the government reporter for the Richmond Register.