A trustee has begun the work of liquidating the assets of a bankrupt Austin company that was accused of duping indebted clients into thinking lawyers were helping to settle their debt.

Orion Processing filed for Chapter 11 bankruptcy in February as it was battling litigation by states across the country that generally alleged that the company engaged in the unauthorized practice of law and violated debt-settlement and consumer-protection laws. A Chapter 11 bankruptcy would have allowed Orion to reorganize and continue to operate. But a federal bankruptcy judge instead converted the case to a Chapter 7 bankruptcy, which will liquidate the company's assets and cease its operations.

“Orion operates under various 'World Law' entities to target vulnerable consumers who are in financial trouble as a result, mostly, of credit card debt. Orion tells consumers that it is a law firm and that it will provide local licensed attorneys to resolve consumers' unsecured credit card debts. In reality, Orion employs no local attorneys and charges consumers illegal up-front fees for substandard debt negotiation services,” said a July 20 motion to convert filed by the state of Oregon and the Oregon Department of Justice in In re Orion Processing.