November 30, 2013
Bankruptcy judge denies debt relief for Parsons, THR
The latest turn in the bankruptcy cases of Jeff Parsons and THR & Associate is no bankruptcy at all.
Chief Judge Mary Gorman of the U.S. Bankruptcy Court for Central Illinois has denied the bankruptcy petitions of Parsons and THR after trustees in the cases accused Parsons of attempting to hide millions in cash and assets.
In effect, according to bankruptcy experts, Parsons and THR would remain liable for hundreds of millions of dollars’ worth of debt listed in the original bankruptcy petitions filed in September 2012.
The Nov. 14 ruling can be appealed, though an appeal had not been filed as of this week, according to court records.
“The bankruptcy code requires a debtor to cooperate with the trustees and to surrender to the trustees all properties and assets,” Gorman wrote.
She granted default judgments to Charles Covey, trustee for Parsons’ personal bankruptcy, and Jeffrey Richardson, trustee for the THR & Associates corporate filing.
Parsons and THR filed for bankruptcy following the 2012 collapse of their road-show company, which conducted buying events across the country of precious metals, jewelry, antiques and collectibles.
Covey and Richardson accused Parsons of attempting to conceal assets, including by destroying property, transferring cash to family members and taking property to a new residence in Texas.
The trustees have conducted a series of auctions of Parsons’ properties, including the $850,000 sale early this month of 242 acres of recreational land in Pike County, 75 miles west of Springfield.
Denial of a bankruptcy petition is unusual, said John Penn, a Dallas attorney who serves as an expert for the American Bankruptcy Institute.
“The whole goal of bankruptcy is to get the debt discharged,” said Penn. “Denial of discharge means his debts are still owed. He goes through the burden of bankruptcy and gets none of the credit.”
Penn said default judgments typically are awarded after debtors miss response deadlines, fail to provide required information or have admitted to the allegations of bankruptcy trustees.
“It’s the big kahuna,” said Penn. “Imagine going in for surgery to fix an ailment. You have the surgery and are recovering, but you still have the same ailment. That’s what this judgment is.”