After several rounds of litigation between Hayes and the Foundation, an Appellate Court ruled he had been overpaid, violated his fiduciary duties to the Estate  and owed them over a million dollars. On August 23, 1996, Hayes filed for bankruptcy according to the Second Circuit's opinion in the case. Hayes filed a complaint against the Appellate Judge who ruled against him, Justice Francis Murphy, on the grounds that Murphy had a relationship with the lawyer for the Foundation that he should have disclosed.
Following multiple rounds of lawsuits between Hayes and the Foundation, an Appellate Court decided he had been overcompensated, breached his trust obligations to the Estate, and owed them more than a million dollars. On August 23, 1996, Hayes filed for bankruptcy in accordance with the Second Circuit's ruling in the case. Hayes lodged a complaint against the Appellate Judge who ruled against him, Justice Francis Murphy, on the grounds that Murphy had a connection to the lawyer representing the Foundation that he should have disclosed.