Attorney Michael S. Manning sounds downright chipper in his tape-recorded telephone message.

"Please be advised," he tells his clients, "that we have closed our offices permanently. . . . We can recommend an attorney that is familiar with your case but is not associated with me. Or you can hire an attorney of your choice. Please leave a message. We will return your call as soon as possible."
Manning's law firm closed in July, and he's in a world of hurt. His woes include a class-action lawsuit filed on behalf of ex-clients, and an ongoing criminal investigation by the United States Attorney.

It's no wonder Manning is playing hard-to-get these days.
"Mailbox is full," a disembodied female voice has intoned at the end of his message machine for three weeks. "Please try your call again later."
Mike Manning's crash has been momentous even for Phoenix, the home of the financial free fall. Manning and Associates had taken Arizona's bankruptcy bar by storm last August, opening with a big-bucks ad campaign aimed at consumer debtors. The pitch sounded compelling: Got money problems? We'll take care of your bankruptcy for no money down!

Almost overnight, Manning snatched a hefty share--an estimated 20 percent--of the Valley's lucrative bankruptcy market. His primary competition was another "zero-down" firm named Hessinger and Associates.

Much has happened in the wake of a New Times probe into the firms' practices (Debt in the Water," February 2, 1994).

Although the glory days of zero-down bankruptcy in Phoenix are over, maybe forever, greedy practitioners have continued to pull scams on clients and Bankruptcy Court judges even as their empires crumble.

The New Times story showed how no-money-down attorneys were preying on thousands of vulnerable citizens in financial crises. Zero-down firms had been gouging clients for twice the fees--about $1,400 per case--as attorneys who demand payment prior to filing.

The high fees were especially reprehensible because the zero-down attorneys spent little time with clients, often meeting them for the first time moments before crucial court proceedings.

The Valley's two largest zero-down firms collected fees in different ways: Manning and Associates asked clients to sign over to them enough postdated personal checks to cover monthly payments. Hessinger and Associates required clients to sign promissory notes at 18 percent annual interest before filing for bankruptcy.

Manning and Associates is no more, but Hessinger and Associates remains open for business, although the firm is doing few bankruptcy cases.

In recent months, however, the Manning and Hessinger firms cashed in untold thousands of dollars from their clients, even after Arizona's bankruptcy judges ordered them to stop:

In June, a man at a Phoenix bank presented postdated checks signed by Manning and Associates clients, probably for transfer into a cashier's check. This happened days after a judge had ordered Mike Manning to turn the checks over to authorities. Manning had claimed he didn't know where the checks were, then said he'd "sold" most of them to a Mexican businessman.

Finance companies working through Hessinger and Associates have continued to harass bankruptcy clients for payment, also in violation of a court order. Hessinger's former lead bankruptcy attorney, J. Murray Zeigler, has admitted to several judges that he made "false statements" about his firm's collection efforts.

Arizona's bankruptcy judges have been slower in dealing with zero-down companies than jurists in other states. Last month, a San Francisco judge banned Hessinger and Associates from practicing law in northern California. He also fined the firm $100,000.

"The evidence has revealed an incredibly ugly and evil enterprise," Alan Jaroslovsky, the San Francisco judge, wrote August 9 of Hessinger. "In the guise of being a law firm, Hessinger is able to lure debtors into its offices with the sole intent of extracting as much money as possible from them with no concern whatsoever about counseling them."
@body:Zero-down bankruptcy came to Arizona through Larry and Wayne Majors, nonlawyer brothers whose rsums are dotted with white-collar scams and criminal convictions.

Hessinger and Associates was the brainchild of Larry Majors. He served almost a year in jail in 1991 after a felony conviction for stealing from Indian customers as general manager of a Payson car dealership.

The Hessinger firm grew like a weed after it started advertising zero-down in 1992. It later opened seven branches in California after offices in Phoenix and Tucson hit paydirt. (Joe Hessinger, whose name tops the masthead, is a Pinetop attorney who is more figurehead than force at his own firm.)

The power over at Manning and Associates resided in Larry Majors' brother, Wayne. He, not Mike Manning, hired and fired attorneys, and made girlfriend Jennifer Metzger the firm's manager and bookkeeper.

Like his brother, Wayne Majors is a convicted scamster who spent almost two years in a federal prison in the late 1980s after a Minnesota mail-fraud conviction.