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College’s charitable funds at risk in bankruptcy court

Posted on Wednesday, November 28th, 2012 at 8:35 pm    

Lon Morris College in Jacksonville, a liberal arts school located less than 120 miles southeast of Dallas, filed for bankruptcy in July with only $11 million in assets from endowment money. Now, bankruptcy attorneys want the court to use its charitable funds to pay off its bills to creditors. The college, the only United Methodist-affiliated school, is fighting to keep the money.

According to the Wall Street Journal, a lawsuit has been filed by the Texas Methodist Foundation, the holders of the endowments, to protect the money. The foundation argues that the individuals who donated their funds in wills or family trusts did not intend for the money to be spent on creditors. However, where the money goes after bankruptcy is not clearly defined in the Bankruptcy Code.

Similar conflicts arose in the late 1980s and 1990s. The court ruling over Bishop College’s bankruptcy case in 1987 denied bankruptcy attorneys from using the school’s charitable money to pay for its debts, claiming the money was not part of the bankruptcy estate. However, in 1996, a hospital in bankruptcy was forced to use charitable donations to cover expenses.

If your business is considering filing for Chapter 11 bankruptcy, a bankruptcy lawyer can explain your options and legal rights. The legal team at the Law Office of Russell Van Beustring can help you through the bankruptcy process to ensure that you are making the right decisions for you and your company.

Lenny Dykstra guilty of bankruptcy fraud

Posted on Monday, July 2nd, 2012 at 8:48 pm    

Former outfielder for the New York Mets, Lenny Dykstra, has pleaded guilty to three charges of bankruptcy fraud in Los Angeles. Dykstra was accused of not disclosing all of his assets during his 2009 filing.

The former baseball player could possibly face up to 20 years behind bars for money laundering, bankruptcy fraud, and concealment of assets. In his bankruptcy application, he listed $31 million in liabilities and only $50,000 in assets. However, prosecutors say he illegally sold, hid, or destroyed $400,000 worth of property.

The Sacramento Bee reports that Dykstra was also accused of lying while under oath about what he did with his assets. He is currently in prison for grand theft auto, providing a false financial statement, and indecent exposure.

Filing for bankruptcy can be confusing, making it easy to make mistakes. To ensure mistakes don’t lead to fraud charges, contact the bankruptcy attorneys at the Law Office of Russell Van Beustring, P.C. today at 713-973-6650 to schedule a consultation.

Residential Capital’s bankruptcy investigated

Posted on Monday, June 18th, 2012 at 8:14 pm    

An examiner has been appointed to investigate Residential Capital LLC’s bankruptcy filing under allegations that its pre-bankruptcy transactions with Ally, a company that may buy up ResCap’s assets, were improper.

A bankruptcy examiner, who is usually a bankruptcy lawyer, is typically appointed in cases where fraud, mismanagement, incompetence, and dishonesty are suspected.¬†Warren Buffett’s Berkshire Hathaway Inc. supported an investigation. Berkshire owns most of ResCap’s debt.

Reuters reports that unsecured creditors and ResCap’s lawyers are against the appointment of a examiner, claiming there is already an investigation underway with its creditor committee. They fear an additional investigation will slow down its reorganization plan.

If you are wondering if your business’s debts are eligible for discharge, contact the legal experts at the Law Office of Russell Van Beustring, P.C. at 713-973-6650.

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