The Seattle Weekly News yesterday published the other end of the Arpaio/Seattle Scammer story. Writer Rick Anderson went to visit Dennis Montgomery at his Yarrow Point “mansion” to seek confirmation of Montgomery’s confidential informant work for the Arizona Sheriff.
What happened?
“Have you done any work for Joe Arpaio?”
“I, I, I have no comment.”
This is how the story begins. Does this ring true ? A 2 million home sold by the court to the debtors lawyer for 1 percent of it’s worth ? For me – unbelievable.
” When I knocked on the door of Dennis Montgomery’s Yarrow Point mansion around noon, several large dogs began howling inside. I could hear them barking and sliding on the hardwood floors of the $2 million home in the Eastside enclave, a neighbor to Hunts Point, Medina, and the rest of the Bill Gates Wonderland.
Montgomery had lost the home to bankruptcy, but his attorney bought it for $20,000 from the court and apparently allows Montgomery to live there. ”
No….it doesn’t ring true.
It certainly wouldn’t have sold for that amount within bankruptcy. The trustee simply wouldn’t allow it.
If he was a debtor in possession I can’t imagine the other debtors not raising a stink. Same with the judge.
If it occurred prior to the filing then it could constitute bankruptcy fraud.
There’s also the question of the lawyer having just a little conflict. Not sure how that might factor in. Maybe one of our real lawyers can offer some insights.
Unless his lawyer is Saul Goodman.
(BREAKING BAD joke)
According to Zillow it sold for $20,000 in April, 2013.
http://www.zillow.com/homedetails/3812-94th-Ave-NE-Yarrow-Point-WA-98004/49145893_zpid/
It was more like a rhetorical question …. Having worked as a trustee for quite some time (in Germany) I could not imagine this to be true. But now that KKKlayman gets $$ 181.000 for his imaginary damages, everything seems possible …….
And Zillow says it is worth $2.7-million. Why can’t I find a deal like that?
Looks like a story inside a story ……
City-Data lists this for the property:
Sale date: 01/14/2013
Price: $20,000
Seller: RUND JASON M -CHAPTER 7 TRUSTEE
Buyer: MICHAEL JOSEPH FLYNN
Sale instrument: Quit Claim Deed
Read more: http://www.city-data.com/king-county/N/NE-94th-Avenue-6.html#ixzz34Ln3zcdC
The Kings County property records confirm the sale price of $20,000. Perhaps we have an attorney who is conversant in bankruptcy case who could explain this.
http://146.129.54.93:8193/imgcache/OPR2597692-1-2.pdf
I can imagine that he bought the property not free of debts. If that is possible in your jurisdiction I do not know.
Actually that is the way things are sold out of bankruptcy by a trustee….totally unencumbered.
That is amazing. It was sold by the chapter 7 trustee so its legit. Now the question is what’s the rest of the story?
I haven’t had a PACER account for several years. Anyone with an active one should be able to get the details.
This just gets stranger and stranger.
I said “not” free of debts, the contrary of unencumbered.
I will make an educated guess about what happened there – based on Germany’s bankruptcy law, but these laws are similar all over the world:
– on the house was a mortgage higher than the market value;
– the owner of the mortgage (a bank) wanted the house to be sold;
– the trustee was not interested in the house – with a mortgage higher than the market valute it was no asset for the trust;
– the lawyer of Montgomery – probably as a trustee for Montgomery – made a deal with the bank, Of this deal we
I will make an educated guess about what happened there – based on Germany’s bankruptcy law, but these laws are similar all over the world:
– on the house was a mortgage higher than the market value;
– the owner of the mortgage (a bank) wanted the house to be sold the easiest way;
– the trustee was not interested in the house – with a mortgage higher than the market value it was no asset for the trust;
– the lawyer of Montgomery – probably as a trustee for Montgomery – made a deal with the bank, This deal allowed the trustee to sell the house. He got 20 grand for the trust (and so one day his fee for his work) for a non-asset. All the rest depends on the deal with the bank, which we will never see.
In the end: nothing to be seen here.
I understand. It may be a language thing but sales out of bankruptcy here are clean…..no debts, no recourse for prior owners or lenders and hence….unencumbered.
In a chapter 7 bankruptcy all assets are liquidated and then the creditors are paid based on their ranking…..secured to unsecured being the lowest….and the availability of funds.
State laws do come into play here despite the fact that bankruptcies are handled in federal court so there may be something in Washington state law that explains this. If so I can’t wait to hear it.
This is the answer:
http://en.wikipedia.org/wiki/Quitclaim_deed
I am not a lawyer, but I am and have been involved in insolvency law for most of the past two decades.
The Trustee is NOT the debtor’s lawyer — Trustees are are independent lawyers and officers of the Court, appointed by the United States Trustee’s Office (part of DOJ). The Debtors are usually represented by their own counsel (or go pro se (see, generally, fool for a client, etc.))
A debtor’s property passes to the “bankruptcy estate” upon filing of the case. The Trustee stands in the shoes of the debtor(s), and may sell or otherwise use the property of the estate and convert same into cash and pay creditors in pro-rata shares. Debtors are allowed to exempt certain property from liquidation by the estate.
Actually, aside, Carl Orcas, secured creditors may not be paid at all, if the trustee does not administer assets subject to those creditors’ liens. Those creditors generally have the same lien rights after bankruptcy as they did before, but are subject to a stay during the pendency of the case.
In this case, it appears that the trustee sold the bankruptcy estate’s interest in the subject property to the buyer for $20,000. (this may or may not be the entirety of the subject property, but rather just the estate’s interest, which the new owner may proceed to enforce). Property sold by the bankruptcy estate is nearly always sold free and clear of liens and encumbrances, with such liens and encumbrances, if any, attaching to the proceeds of the sale.
Yes. Been there, done that….as they say. But like all creditors they place a claim that is prioritized, right?
In the cases I was involved in the asset was sold at auction (court auction in the court room) and proceeds went to the first lien holder (seconds got nothing) and any remaining debt was eventually discharged when the case was finalized.
Nothing survived against the creditor once the 7 discharged. Except, of course, the IRS.
I’m still trying to figure out how a multimillion dollar asset got sold for $20,000. I’m not going to reactivate my PACER account to find out but it would be interesting to know.
It didn’t. Only the Trustee’s interest was sold. Any other creditors’ liens survive bankruptcy. I did look at the docket and it appears that another creditor with an interest in that property obtained relief from the automatic stay, Someone would have had to made a deal with that creditor. It’s unlikely that someone was the debtor.
Rickey explained it in the other thread. It included the assumption of over $800.000 in liens against the property.
http://www.obamaconspiracy.org/2014/06/the-corsiwndarpaiozullomontgomery-connection/#comment-333947
The revelation that Montgomery has a gambling problem is interesting – it’s always about the money.