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The Price of Arrogance: Far-Reaching Order Sets Precedent that MERS Scheme is Unlawful
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SERVICE 520-405-1688 — My apologies. A draft of this article was accidentally published yesterday. Judge Grossman’s decision dates back one year. It is not a recent decision but it has huge significance right now in my opinion. The draft left the impression that Judge Grossman had just ruled. That is not correct.
“This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.” — Judge Grossman, 2/10/11
No Retroactive Effect Because of Rooker Feldman Doctrine
EDITOR’S NOTE: Five years ago, while thinking about the “business model” Wall Street invented I concluded that in the end the issue would be decided by title law — and its effect on the so-called debt, the promissory note containing false declarations of fact, and the mortgage or deed of trust that also contained false declarations of fact and which also explicitly did not travel with the note (which didn’t describe the real transaction anyway).
The rule was that the note generally traveled with the mortgage and that the note was equivalent to the obligation unless the parties intentionally acted to the contrary. Because Wall Street needed a colorable claim in order to purchase insurance and credit enhancements on loans it did not own, it intentionally split the note from the obligation and the mortgage from both the obligation and the note. Thus I concluded that at some point, unless 300 years of common law was going to be turned on its head, the obligation from borrower (homeowner) to lender (investor) existed but it was both unsecured and undocumented.
The answer to the entire housing problem was a lawsuit to quiet title.
From that conclusion the rest was easy. All the documents pouring into the foreclosure system had to be fabricated, falsified, forged and lack both authenticity and authorization. The Banks had stepped on a huge rake and it was eventually going to hit them square in the face. A courageous Judge dealing with a level of arrogance not usually seen in court has killed MERS and all that flows from MERS or anything else like it.
It took years for the likes of Judges Boyco in Ohio, Shack in New York, and other Judges around the country to start questioning the “dance.” Finally Judge grossman last year, enetered an order that amde it clear that the MERS business model was not just flawed, it was illegal..His reasoning was impeccable and the Banks took notice and started the “negotiations” for a “settlement” right away. After all, if Grossman’s ruling was applied across the board, virtually every prospective foreclosure would be off the table and every fictitious asset relating to mortgages would be written off of the balance sheets of the banks claiming ownership. It is still a wonder to me how any auditing firm can look at those books, see that the funding came from the investors, understand that the loan receivable asset was owned by the creditor investor and still allow the bank to claim the asset and losses from devaluation of the asset.
The bottom line is that Judge Grossman’s 2011 ruling, especially in bankruptcy court means that the debt is unsecured and is therefore fully dischargeable unless the issue had already been litigated in that case in state court where a contrary decision was reached. It means that foreclosures cannot proceed without an explicit ruling from another Bench stating that Grossman was wrong.
It also means that at least half, probably closer to 85% of all the homes subject to foreclosure were stolen — a violation of the civil rights of each and every homeowner subject to foreclosure and eviction on a loan that was securitized, especially those that overtly used MERS. remember that just because MERS doesn’t show on the mortgage or deed of trust, doesn’t mean that MERS is not in use. In one form or another MERS or its equivalent was in use, using the layered or Laddered” (a Goldman Sachs term) shell game of entities, none of whom owned anything, none of whom were properly capitalized and none of whom could or would pay a judgment for damages no matter how large or how small.
United States Bankruptcy Judge Robert Grossman has ruled that MERS’s business practices are unlawful. He explicitly acknowledged that this ruling sets a precedent that has far-reaching implications for half of the mortgages in this country. MERS is dead. The banks are in big trouble. And all foreclosures should be stopped immediately while the legislative branch comes up with a solution.
For some weeks I have been arguing that MERS is perpetrating foreclosure fraud all across the nation. Its business model makes it impossible to legally foreclose on any mortgaged property registered within its system — which includes half of the outstanding mortgages in the US. MERS was a fraud from day one, whose purpose was to evade property recording fees and to subvert five centuries of property law. Its chickens have come home to roost.
Wall Street wanted to transform America’s housing sector into the world’s biggest casino and needed to undermine property rights to make it easier to run the scam. The payoffs were bigger for lenders who could induce homeowners to take mortgages they could not possibly afford. The mortgages were packaged into securities sold-on to patsy investors who were defrauded by the “reps and warranties” falsely certifying the securities as backed by top grade loans. In fact the securities were not backed by mortgages, and in any case the mortgages were sure to go bad. Given that homeowners would default, the Wall Street banks that serviced the mortgages needed a foreclosure steamroller to quickly and cheaply throw families out of the homes so that they could be resold to serve as purported collateral for yet more gambling bets. MERS — the industry’s creation — stepped up to the plate to facilitate the fraud. The judge has ruled that its practices are illegal. MERS and the banks lose; investors and homeowners win.
Here’s MERS’s business model in brief. Real estate property sales and mortgages are supposed to be recorded in local recording offices, with fees paid. With the rise of securitization, each mortgage might be sold a dozen times before it came to rest as the collateral behind a mortgage backed security (MBS), and each of those sales would need to be recorded. MERS was created to bypass public recording; it would be listed in the county records as the “mortgagee of record” and the “nominee” of the holder of mortgage. Members of MERS could then transfer the mortgage from one to another without all the trouble of changing the local records, simply by (voluntarily) recording transactions on MERS’s registry.
A mortgage has two parts, the “note” and the “security” (not to be confused with the MBS) or “deed of trust” that is usually just called the “mortgage”. The idea behind MERS was that the “note” would be transferred from seller to purchaser, but the “mortgage” would be held by MERS. In fact, MERS recommended that the “note” be held by the mortgage servicer to facilitate foreclosures, but in practice it seems that the notes were often lost or destroyed (which is why all those Burger King Kids were hired to Robo-sign “lost note affidavits”).
At each transfer, the note and mortgage are supposed to be “assigned” to the new owner; MERS claimed that because it was the “mortgagee of record” and the “nominee” of both parties to every transaction, there was no need to assign the “mortgage” until foreclosure. And it argued that since the old adage is that the “mortgage follows the note” and that both parties intended to assign the notes (even if they did not get around to doing it), then the Bankruptcy Court should rule that the assignments did take place in some sort of “virtual reality” so that there is a clear chain of title that allows the servicers to foreclose.
The Judge rejected every aspect of MERS’s argument. The Court rejected the claim that MERS could be both holder of the mortgage as well as nominee of the “true” owner. It also found that “mortgagee of record” is a vague term that does not give one legal standing as mortgagee. Hence, at best, MERS is only a nominee. It rejected MERS’s claim that as nominee it can assign notes or mortgages — a nominee has limited rights and those most certainly do not include the right to transfer ownership unless there is specific written instruction to do so. In scarcely veiled anger, the Judge wrote:
“According to MERS, the principal/agent relationship among itself and its members is created by the MERS rules of membership and terms and conditions, as well as the Mortgage itself. However, none of the documents expressly creates an agency relationship or even mentions the word “agency.” MERS would have this Court cobble together the documents and draw inferences from the words contained in those documents.”
Judge Grossman rejected MERS’s arguments, saying that mere membership in MERS does not provide “agency” rights to MERS, and agreeing with the Supreme Court of Kansas that ruled “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant — their description depended on which part they were touching at any given time.”
He went on to disparage MERS’s claim that since in legal theory the “mortgage follows the note”, the Court should overlook the fact that MERS separated them. He stopped just short of saying that by separating them, MERS has irretrievably destroyed the clear chain of title, although he hinted that a future ruling could come to that conclusion:
- “MERS argues that notes and mortgages processed through the MERS System are never “separated” because beneficial ownership of the notes and mortgages are always held by the same entity. The Court will not address that issue in this Decision, but leaves open the issue as to whether mortgages processed through the MERS system are properly perfected and valid liens. See Carpenter v. Longan, 83 U.S. at 274 (finding that an assignment of the mortgage without the note is a nullity); Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 166-67 (Kan. 2009) (“[I]n the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable”).”
That would mean not only the end of MERS, but also the end of the banks holding unenforceable mortgages because they were not, and cannot be, “perfected”. MERS and the banks screwed up big time, and there is no “do over” — there is no valid lien on the property, so owners have got their homes free and clear.
There have been numerous court rulings against MERS — including decisions made by state supreme courts. What is significant about the US Bankruptcy Court of New York’s ruling is that the judge specifically set out to examine the legality of MERS’s business model. As the judge argued in the decision, “The Court believes this analysis is necessary for the precedential effect it will have on other cases pending before this Court”. In the scathing opinion, Judge Grossman variously labeled MERS’s positions as “stunningly inconsistent” with the facts, “absurd, at best”, and “not supported by the law”. The ruling is a complete repudiation of every argument MERS has made about the legality of its procedures.
What is particularly ironic is that MERS actually forced the judge to undertake the examination of its business model. The case before the judge involved a foreclosed homeowner who had already lost in state court. The homeowner then approached the US Bankruptcy Court to argue that the foreclosing bank did not have legal standing because of MERS’s business practices. However, by the “Rooker-Feldman” doctrine (or res judicata), the US Bankruptcy Court is prohibited from “looking behind” the state court’s decision to determine the issue of legal standing. Hence, Judge Grossman ruled in the bank’s favor on that particular issue.
Yet, MERS’s high priced lawyers wanted to push the issue and asked for the Judge to rule in favor of MERS’s practices, too. So while MERS won the little battle over one foreclosed home, it lost the war against the nation’s homeowners. The Judge ruled against MERS on every single issue of importance. And it was MERS’s stupid arrogance that brought it down.
As I predicted two weeks ago, MERS would be dead within weeks. Judge Grossman has driven the final stake through its black heart. The half of America’s homeowners whose mortgages are registered at MERS have been handed a “get out of jail free” card. Wall Street has no right to foreclose on their property. The tide has turned. It won’t be easy, but homeowners in those states with judicial foreclosures now have Judge Grossman on their side. Those in the other states (just over half) will have a tougher time because they can lose their home before they ever get to court. But the law is still on their side — foreclosure by members of MERS is theft — so class action lawsuits may be the way to go.
MERS is dead, but can the banks survive? There are two separate issues. First, there are the “reps and warranties” given by the mortgage securitizers (Wall Street investment banks) to the investors (pension funds, GSEs, PIMCO, and so on). We now know that a quarter to a third of the mortgages bundled to serve as backing for the securities did not meet stated quality. Worse, we also know that the banks knew this — they hired third parties to undertake “due diligence” to check quality. This was not done to protect the investors, rather, the purpose was to strengthen the bargaining position of the securitizers, who were able to reduce the prices paid for the mortgages. Now, the investors are suing the banks for restitution–forcing them to cover the losses and buy-back the bad mortgages at original price. To add insult to injury, even the NYFed is suing them. That is a lot like having your parents sue you for their inadequate parental oversight of your behavior.
The second issue is that the mortgages backing the securities were supposed to be placed in Trusts (affiliates of the securitizing banks), with the Trustee certifying not only that the mortgages met the reps and warranties but also that the documents were up to snuff and safely locked away. We know they were not. As mentioned above, MERS told the servicers to hold the notes, and many or most of them were destroyed or lost. Further, the notes were separated from the mortgages — making them null and void. In any case, they are not at the Trusts. This means the MBSs are not backed by mortgages, meaning the MBSs are unsecured debt. MERS’s business model ensures that. So, again, the banks must take back the fraudulent securities — paying off the investors.
What can Wall Street do? Well, I suppose the “help wanted” signs are already up at MERS and Wall Street banks: “Needed: Burger King Kids to Robo-sign forged quasi-professional-looking docs”. The problem is that even with tens of thousands of Robo-Kids, Wall Street will not be able to pull off a vast criminal conspiracy on the necessary scale. Think about it: 60 million mortgages, each sold ten times, means 600 million transactions and assignments that have to be forged. MERS’s documentation was notoriously sloppy, relying on voluntary recording by members. The Robo-Kids would have to go back through a decade of records to manufacture a paper trail that would convince now-skeptical judges that there is a clear chain of title from the first recording in the public record through to the foreclosure. It ain’t going to happen.
The only other hope is that Wall Street can call in its campaign contribution chips and get Congress to retroactively legalize fraud. That is what they do in those dictatorships that protestors are now bringing down in the Middle East. Is Washington willing to take that risk, just to please its Wall Street benefactors?
The court document is available here. It is terrific reading.
This post originally appeared at Benzinga.
Michael Premo
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: 60 minutes, AHMSI, appraisal fraud, attorney general, auction fraud, bankruptcy court, Chris Koster, credit bids, DocX Indictment, foreclosure fraud, FORECLOSURE SETTLEMENT, foreclosures, forgery, Grossman, housing market, housing prices, investors, linda green, LPS, MERS, Missouri, mortgage fruad, mortgages, Robo-Signing, settlement, strategic default 
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Slavery Museum Files Bankruptcy-Exit Plan
The U.S. National Slavery Museum recently filed a plan to exit bankruptcy protection and restart fundraising so it may someday share its collection of slavery artifacts and documents with the public.
Five months after filing for Chapter 11 protection, the nonprofit organization on Friday filed its plan of reorganization, which describes how it will use charitable donations to continue operating.
“The debtor is committed to making its best effort to broaden its donor base and to utilize lower-cost options to effectuate fundraising,” the museum said. “The debtor is optimistic that its fundraising efforts will be sufficient to perform under the plan.”
The museum added that it expects to raise $ 900,000 in a year’s time and even more in subsequent years.
The National Slavery Museum filed for bankruptcy last September to stop the city of Fredericksburg, Va., from selling its 38 acres of property in order to satisfy three years of unpaid real-estate taxes. The nonprofit had racked up significant debts as it worked to construct its museum and found itself reeling from tax bills and other challenges.
Now, the city is one of two secured creditors whose claims the museum must address under its Chapter 11 plan. The other is Pei Partnership Architects, which designed the museum. Both creditors would be repaid within a four-year span and would also be required to “provide reasonable cooperation” with the museum’s construction.
To pay these claims, the museum said it would use the income generated from its operations.
The plan is subject to the approval of the U.S. Bankruptcy Court in Richmond, which will first consider an outline of the plan at an April 11 hearing.
The U.S. National Slavery Museum was founded in 1993 to educate the public about slavery in the U.S. through displays of historical artifacts, documents and rare books as well as lectures. It was the brainchild of former Virginia Gov. L. Douglas Wilder, the first elected African-American governor in the U.S. who is now a professor at Virginia Commonwealth University.
Among the museum’s possessions are shackles, handwritten bills of sale, musical instruments, clothing and memorabilia employing racial stereotypes, like an Aunt Jemima syrup pitcher and a photograph of minstrels in blackface. You can view a full accounting of its extensive holdings here, here and here.
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What happened to Joe Nocera?
Sometimes you just have to wonder. Nocera has been an excellent, even if somewhat reluctant investigative reporter who brought almost as much daylight as Gretchen Morgenstern. Like others reporting on the mortgage mess, he has not yet attempted to quantify or even describe the financial damages to investors and homeowners, much less the total financial damage to our society. The amount of damage, as anyone knows, is hidden behind layers of denial and attempts to distance the banks from their own behaviour.
Which is why I don’t understand Nocera in his article “3 Cheers for the settlement.” if we know anything, it is that at least $ 17 TRILLION has been spent, that we know of, repairing the damages caused by these banks. So why is Nocera saying that prosecuting the banks for intentionally causing these damages to all of us would not be productive? Who got to him? And why is 1 cent on the dollar a good deal?
Why does Nocera assume that it will take years to prosecute? We already half the evidence we need. why does Nocera assume that the threat that the banks to stop negotiating would be a bad thing? Why does he assume it is anything other than a bluff?
And why does Nocera now write that the settlement represents more monetary relief to homeowners than they could ever hope to get in court? Really? When did Nocera quantify the damages? in which article? if he doesn’t know, why pretend that he does know (and we know he Lacks the information to compare the value of a settlement that has not been finalised with the $ 17 Trillion we already know about).
Or is this another swipe at borrowers — echoing the latest lines from the bankers’ playbook that these were innocent victimless crimes? Explain to our audience how falsely inflating the property value, false statements in the mortgage documents, false statements in the mortgage bond documents causes trillions in damage without victims. please ! Explain how collecting multiple times on the same debt creates no victims. explain why homeowners should lose title and possession to a house in which they poured their heart and soul — even after they paid the illegal debt multiple times with their tax dollars, their pensions, and their credit reputations.
Filed under: bubble, CORRUPTION, currency, Eviction, evidence, expert witness, foreclosure, GTC | Honor, investment banking, Investor, MODIFICATION, Mortgage, Pleading, politics, securities fraud, Servicer, STATUTES Tagged: false declarations, measure of damages, multiple-state, Nocera, Robo-Signing, settlement 
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Bloomberg: Whistleblower at Citi Sets the Standard for Attacking Mortgages
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SERVICE 520-405-1688
Editor’s comment: The article below summarizes the bad loan analysis: “finding flaws in new loans that included altered tax forms, straw buyers and borrowers who listed fictitious employers.” What’s missing? — flaws in loans that included altered or fraudulent appraisals, altered or fraudulent disclosures under TILA, altered or fraudulent settlement statements, straw lenders, and mortgage brokers who listed fictitious creditors and underwriters.
The media and law enforcement still refuse to take the extra step — simply looking at the origination of each loan and determining whether the same standards they are using to disqualify the underwriting of the loans should be used to invalidate the enforceability of the loans.
I know this is a hot button, but I remind you that it is our position here that IF there is a balance due on the obligation, the homeowner still owes it — but that the amount of the claim is being falsely reported and the identity of the creditor is being fraudulently presented.
Most importantly, the collateral for the obligation — the home — has never attached to the loan, particularly as to “strangers to the transaction” who were neither parties to the borrower’s transaction nor parties to the lender’s transaction.
Strategically the path of least resistance is to start by attacking the mortgage and not the the obligation. Tactically, the and realistically, the entire obligation, if it is documented at all, is contained in BOTH the closing documents with the investors lenders (the securitization documents) and the closing documents with the borrower (the escrow closing with the homeowner). Even then, since the two sets of documents don’t refer to each other, and the two sets of people — lenders and borrowers — are not identified properly in either set of documents, some equitable reformation of the entire transaction must be used, which means there can’t be any summary judgment or non-judicial foreclosure.
And unless the actual creditor shows up in the courtroom with proof of a claim of loss, there is no action, period. Strangers tot he transactions are not permitted to enter into a court proceeding claiming a debt owed to another person merely because they learned of the debt. They must possess their own claim and they can recover only up the amount of their own claim, if they prevail. AND they are not parties to the security instrument (mortgage or deed of trust) so they are not secured.
The current pilot program of naming the pool is a strategic rope-a-dope. In more than 50% of the cases, the pool does not exist anymore having been resolved (settled) or succeeded by another pool with different terms. In short they have been paid.
In 95% of the cases, the loan never made it into the pool nor could it have been accepted by the manager or trustee because the loan was
- (a) non performing at the time of the “assignment”
- (b) not supported by an actual monetary transaction in which the loan was sold and
- (c) was imperfectly “assigned” by unauthorized clerks acting as officers using methods not approved by the PSA AFTER the cutoff date (meaning that even if they were right about assigning the loan late into the pool and even if the pool “accepted” the assignment despite the prohibition against doing so, the principal and material representation to investors regarding tax treatment by the Internal Revenue Code (activity is considered nontaxable event) would be breached.
In the end I return to my basic question: if the original loans were valid, if the loan documents did not contain false declarations of fact, then why would any of the banks have ever needed to resort to fabrication, forgery and fraud? We keep hearing the latest mantra that renting the properties is the way out of the foreclosure mess. No, that isn’t true. All the title problem and monetary losses suffered by victims of fraud would remain under that scenario.
LAWYERS GET THIS POINT!: The fact that an assignment document has been presented does not mean the assignment occurred. Each one says “for value received.” Attack that through discovery and you will find that in no case was any money paid for the sale, transfer or assignment of any loan because the original transaction already took place between the lender investors and the borrower homeowner. There was nothing to pay and nothing to receive because the obligation was already owned legally and equitably by the investors at the time of the alleged sale, transfer or assignment. And the fact that an assignment is offered does not mean that it has been or could be accepted. Discovery directed at the assignee will clear that up in 30 seconds.
The real way out of the foreclosure mess is (a) reverse the wrongful foreclosures (even if you want to narrow them down to those in which the borrower actually owes money and can’t pay it) and (b) stopping any future foreclosures by strangers to the transactions that are based upon false declarations in fabricated documents identifying the wrong parties, and omitting key elements of the terms of repayment.
It is simple. Give back what was stolen in money, property, and reputation (credit scores etc.) and the whole country will have its middle class restored with money to spend in our consumer driven economy.
Citigroup Whistle-Blower Says Bank’s ‘Brute Force’ Hid Bad Loans From U.S.
By Bob Ivry, Donal Griffin and Andrew Harris
Four years after rotten mortgages helped trigger a global financial crisis, Sherry Hunt said her Citigroup Inc. quality-control team was still finding flaws in new loans that included altered tax forms, straw buyers and borrowers who listed fictitious employers.
Instead of reporting the defects to the Federal Housing Administration, the bank saddled the agency with losses by falsely declaring the loans fit for its federal insurance program, according to a complaint filed yesterday by the U.S. Attorney’s Office in Manhattan. Citigroup agreed to pay $ 158.3 million to settle the claims, and admitted that it certified loans for FHA backing that didn’t qualify.
Hunt, who filed a sealed lawsuit against New York-based Citigroup in August that the government joined, will collect $ 31 million of that sum — before taxes and attorney’s fees — as a whistle-blower, she said in an interview yesterday. The settlement, which encompassed misconduct spanning 2004 to the present, indicates Citigroup has lingering problems in its O’Fallon, Missouri-based CitiMortgage unit.
“Citigroup in particular received government funding, taxpayer dollars, because of its risky operations,” said Peter Henning, a law professor at Wayne State University in Detroit. “It shows that they hadn’t really learned much of a lesson from the financial crisis.”
Inspector General
The inspector general for the U.S. Department of Housing and Urban Development faulted Citigroup’s quality-control program during a 2008 audit, according to the complaint. Taxpayers rescued the bank with a $ 45 billion bailout that same year and guaranteed more than $ 300 billion of its risky assets after the lender’s stability was threatened by mounting costs on soured loans. The bank lost a total of $ 29.3 billion in 2008 and 2009.
Hunt’s co-workers, instead of checking for fraud or making reports about underwriting defects to the FHA as required, argued with her over the soundness of the loans, she said. Employees who acted as “gatekeepers” applied “what they describe as ‘brute force’ to pressure Citi’s quality control managers” into downplaying defects, according to the government’s complaint.
Some colleagues had pay incentives tied to reducing the number of reported problems, and they spent hours trying to get her to relax her warnings, including those about the most basic deficiencies, Hunt said.
‘Beating Us Up’
“They started beating us up over the quality-control reports,” she said.
Last year, she said, she became convinced she was being asked to look the other way on serious flaws. That’s when she decided to become a whistle-blower.
“All a dishonest person had to do was change the reports to make things look better than they were,” Hunt said in an interview. “I wouldn’t play along.”
Citigroup has approved about 30,000 loans with a value of $ 4.8 billion for FHA insurance since 2004; more than 30 percent of those borrowers have quit paying, the Justice Department said in its complaint. Almost half the bank’s FHA loans originated in 2006 and 2007 have defaulted, the government said, with HUD paying out almost $ 200 million in insurance claims on mortgages Citigroup originated or underwrote since 2004.
citigroup-whistle-blower-says-bank-s-brute-force-hid-bad-loans.html
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: 60 minutes, AHMSI, appraisal fraud, attorney general, auction fraud, Chris Koster, Citi, credit bids, DocX Indictment, foreclosure fraud, FORECLOSURE SETTLEMENT, foreclosures, forgery, housing market, housing prices, investors, linda green, LPS, Missouri, mortgage fruad, mortgages, Robo-Signing, settlement, strategic default, whistleblower 
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Differences between Debt Consolidation and Chapter 13 Bankruptcy
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The Broke and the Beautiful: Busey Redux Edition
This week on The Broke and the Beautiful, Gary Busey’s assets are revealed. Also, Tionne “T-Boz” Watkins’s bankruptcy case has been dismissed, and Don Henley’s nonprofit group will return half of the donation it got from Ponzi-scheme operator Scott Rothstein.
- Valerie Macon/AFP/Getty Images
When Gary Busey filed for bankruptcy last week, he reported less than $ 50,000 in assets. This week, we found out just what those assets are. According to documents filed Thursday with the San Fernando Valley, Calif., bankruptcy court (h/t TMZ), Busey is the proud owner of several guitars, artwork and a variety of home furnishings. On the more nostalgic side, Busey also has 300 VHS tapes, 200 cassettes, old Nikon film and a boombox to his name. Will the actor and former “Celebrity Apprentice” star end up having to auction any of his prized possessions like other celebs have done? Guess you’ll just have to stay tuned.
Tionne “T-Boz” Watkins ain’t gettin’ no love from a bankruptcy judge. According to Bankruptcy Beat, the TLC singer’s third bankruptcy case has been scrubbed. Reasons for the dismissal, which was requested by Watkins’s Chapter 13 trustee, included failure to file necessary paperwork and failure to provide for creditor Mercedes-Benz Financial Services in her proposed bankruptcy plan. “Such failure represents an unreasonable and prejudicial delay in protecting the rights and interests of the estate and debtor’s creditors,” Judge James R. Sacca of the Atlanta bankruptcy court wrote.
- Associated Press
Broke last mentioned Marilyn Monroe a few weeks ago, when Monroe’s estate was making a settlement with deceased photographer Sam Shaw’s archive. Now, as Bankruptcy Beat reported, a firm that helps companies with brand management is losing its rights to license a bunch of photographs of the blond bombshell. Bradford Licensing LLC said it would give up its rights to license the photos, which were taken by Shaw, for $ 75,000 from the Monroe estate. The White Plains, N.Y., bankruptcy court will consider the requests at a hearing on Feb. 28.
It’s been a while since we’ve written about actor Armand Assante, who filed for bankruptcy last October. But according to the Times Herald-Record, Assante’s ex-wife has sued him for $ 1.8 million in matrimonial support. Karen Assante said her ex-husband shouldn’t be able to avoid paying her the $ 15,000 a month he owes even though he’s in bankruptcy. Because the money he owes is considered domestic support, it has a higher priority than other claims, Karen Assante said.
- Reuters
- Don Henley performs in New York in September 2010.
The bankruptcy case of South Florida Ponzi-scheme operator Scott Rothstein’s law firm has had its share of celebrity sightings, often in the form of photos of Rothstein with people like former boxer Muhammad Ali and former Florida Gov. Charlie Crist. Now, musician Don Henley has been affected by Rothstein’s life in the fast lane. The South Florida Business Journal reported that the Caddo Lake Institute, a nonprofit environmental group Henley founded, will return $ 50,000 of a donation it got from Rothstein before his dirty laundry—i.e., his $ 1.2 billion-plus Ponzi scheme—was aired in 2009.
- Associated Press
- Molly Sims
High-end jeans designer Rock & Republic filed for bankruptcy in 2010, and its transition to its new home at Kohl’s department stores hasn’t been without speed bumps. But the brand, whose apparel had previously been sold in stores like Neiman Marcus and Bloomingdale’s, is finally back, and some celebs came out to show their support. According to the Los Angeles Times, stars like Molly Sims, Zoe Saldana (who’s no stranger to formerly bankrupt businesses) and Ashlee Simpson were tapped to give the press unveiling. Sims told the Times she’s been a fan of the brand since its “very beginning,” adding that it was “one of the first brands that had the long flowing-leg jeans for the skinny girl.”
Last but not least, the sale of the Los Angeles Dodgers has entered its second round of bidding this week, Bankruptcy Beat reported. Eleven bidders who passed the first round have now been asked to revamp their offers within a week, and the bids that make the next cut will then go before MLB officials for approval. (You didn’t think we’d have an episode of Broke without mentioning the Dodgers, did you?)