Dale C. Bartlett recently had his Chapter 11 bankruptcy reorganization converted to a Chapter 7 liquidation — and not everyone’s happy about it.
The Official Unsecured Creditors’ Committee urged U.S. Bankruptcy Judge Richard D. Taylor to reconsider his order that allowed Bartlett to liquidate his assets.
The committee said in its filing that “bad faith” is an exception that could keep Bartlett in Chapter 11.
The committee had a number of examples to support its claim of bad faith, including Bartlett listing his wife as a partner in his farming operations on his Chapter 11 operating reports. He transferred “substantial sums” of money to her for “farming income despite the fact that the debtor’s tax returns fail to show his wife as earning any farming income over the previous three years,” the committee’s motion said.
Bartlett’s monthly operating report for February listed no salary income for the month but a $30,000 grain sale. He also gave half of his 2013 farm income to his wife; her share was $18,437.
The committee wanted to handle the liquidation of Bartlett’s assets, which would have left more money for creditors.
Other creditors also pushed to keep the bankruptcy in Chapter 11.
“The court ruled yesterday that it wouldn’t set aside the order,” Bartlett’s attorney Frederick “Tripp” Wetzel III of Little Rock, told Whispers Thursday.
When Bartlett filed for bankruptcy protection in September, he listed $5.5 million in debts and $2 million in assets. Since his filing, other creditors have filed claims pumping up the potential liabilities by more than eight times his original estimate. Bartlett’s March operating report showed $2.5 million in debt and $1.9 million in assets.