Bankruptcy Case Winds Down For Felonious Exec, Steve Clary

by Mark Friedman  on Monday, Feb. 18, 2013 12:00 am  

Steve (inset) and Cynthia Clary’s $1.2 million home in west Little Rock was his main asset in his Chapter 7 bankruptcy. They listed $168.6 million in debts.

He also sold a number of his household goods, including art, lamps and chairs and generated $10,475.

He said that he sold his 2004 Mercedes-Benz for $27,000 around the first of 2009, but the bank garnished most of the proceeds, so he decided to start using cash and avoided his bank account.

Bankruptcy

Collection lawsuits started piling up against Clary in 2008.

By the time of Clary’s bankruptcy filing in 2010, most of Clary’s businesses were closed. He listed nearly $12 million in judgments against him or his businesses.

Clary’s largest unsecured creditor was M&I Marshall & Ilsley Bank of Milwaukee for $116.5 million. The debt was tied to his Shackleford Crossings, which fell into the hands of a receiver after he defaulted on a $74 million funding agreement.

In May 2011, though, the Dallas office of Invesco Real Estate bought the debt for an undisclosed sum from M&I Marshall.

In July 2011, Invesco Real Estate received the 271,675-SF center on about 40 acres of property with a $42 million foreclosure bid. Clary’s personal finances were a mess too.

The bankruptcy filing showed that Clary’s home had nine liens on it, totaling $26.73 million.

In the September 2010 bankruptcy meeting, Clary said that he didn’t know what the home was worth.

He said he was making his $5,600 monthly mortgage. The mortgage amount increased, however, to $5,800 in 2010 because he didn’t have a fixed-rate mortgage.

Clary told Rice he intended to hold onto the home, and he has.

“With any type of post-bankruptcy activity we’re able to generate enough income to [pay the mortgage]. We certainly want to do that,” he said.

The bankruptcy filing didn’t shed light on how Clary was able to continue making the payments.

Clary didn’t submit the required financial data to demonstrate that he was eligible for a federal public defender. But he was appointed one anyway because “he is entitled to immediate representation and it is in the interest of justice,” U.S. Magistrate Judge H. David Young wrote in his Sept. 13, 2010, order.

 

 

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