A bankruptcy trustee wants a judge to toss a Mountain Home oncologist’s $1.6 million bankruptcy case.
The acting United States trustee, Daniel Casamatta, filed the complaint in November in Dr. Kristie Lynn Gast’s Chapter 7 bankruptcy liquidation seeking a denial of her discharge, which, if successful, would prevent Gast from being excused from paying her debts.
In the year before she filed for bankruptcy protection, Gast allegedly “removed, transferred, or concealed property of the estate,” including her interests in property, vehicles, jewelry and art, according to the trustee’s complaint filed by Kathryn M.C. Worlow of the Office of the United States Trustee in Little Rock.
Gast denied the allegations of wrongdoing in her answer filed last month by her attorney, Stanley Bond of Fayetteville. Bond didn’t immediately return calls for comment.
Gast listed $1.93 million in assets in her bankruptcy documents filed in April 2021.
Gast blamed the failure of her Fort Smith Radiation Oncology for triggering the bankruptcy, according to Worlow’s filing.
In 2011, Gast opened the business, where she provided cancer treatment services. But in 2019, the business began “experiencing severe financial difficulties,” and she struggled to pay the clinic’s bills, Worlow said in the filing. Gast stopped making mortgage payments on FSRO’s building in September 2019.
Gast closed the business in 2019, and she took a job as an oncologist practicing in Mountain Home, earning $450,000 annually, according to her bankruptcy filings. In 2019, Gast’s gross income was $234,610 from operating her business.
She purportedly filed for bankruptcy to discharge the remaining debts of FSRO that she had personally guaranteed, Worlow said. But Worlow alleged that Gast had transferred property to her husband, Ronnie Martin, whom she married in 2014, and her adult children, to hide assets.
Worlow said in the filing that Gast concealed from the bankruptcy court and interested parties her transfers of her interest in her home in Oklahoma, a condo and a Mountain Home house she bought in 2020 by not disclosing them in her bankruptcy filing.
Gast, however, did report her transfer of her Mountain Home house during a bankruptcy proceeding, but she didn’t report at any time her transfer of her interest in the condo or the Oklahoma house, Worlow’s filing said.
Gast’s reports about her assets also drew attention. She listed in her bankruptcy filing that she had $850 total in household goods, furnishings and electronics, $850 in sporting equipment and clothes, and $4,200 in jewelry. Her collectibles, including paintings, prints or other artwork, had no value, the filing said.
But an insurance policy renewal notice with a date mailed March 3, 2021, less than a month before her bankruptcy filing, showed that she and Martin “actually owned many valuable jewelry items and fine art by high profile artists such as Peter Max and Romero Britto,” the filing said. The policy notice also listed 27 pieces of women’s jewelry owned by Martin and Gast with a policy coverage of more than $190,000, Worlow’s filing said. The art listed on the notice shows coverage of about $67,000.
And while Gast listed seven cases in which she paid or transferred property worth a total of $14,000 that benefited her immediate family within a year of her filing for bankruptcy protection, the trustee allegedly discovered more. Worlow said that there were more than $331,000 in payments from Gast that benefited insiders, namely Martin, and her two adult children.
The trustee said that Gast’s discharge should be denied because “with intent to hinder, delay, or defraud a creditor or the chapter 7 trustee, Defendant removed, transferred, or concealed property of the estate” within a year of filing for bankruptcy, the filing said. That included her interest in property, vehicles, jewelry and art.
A hearing in the case is scheduled for Aug. 2 in front of Judge Bianca Rucker in Fayetteville.
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