It’s a move designed to rapidly clear away one’s debts, and the pre-petition receiver of the radio stations formerly licensed to Ed Stolz‘s Royce International Broadcasting wants the U.S. Bankruptcy Court for Nevada to make it.
Larry Patrick wants Stolz’s case converted from Chapter 13 to Chapter 7. It’s a request that comes in response to Stolz’s recent sale of property in Rancho Mirage, Calif., during the pendency of his bankruptcy case — bringing him more than $1 million in proceeds.
An emergency motion to convert the case in the Nevada federal bankruptcy court to Chapter 7, drafted February 28 by Fox Rothschild attorneys in Las Vegas, brings Judge August B. Landis a refresh of the record that indicates a residence owned by Stolz at 1 Toscana Way West in Rancho Mirage, Calif., was sold.
Patrick “just learned” of this, he told the court, and the transaction occurred without any notice to creditors, or any court approval.
According to RBR+TVBR‘s analysis of the home sale, an auction was conducted that saw a winning bid of $1.3 million for the 4 bedroom, 5 bathroom residence.
“This foreclosure property is a great opportunity to invest in this neighborhood and generate potential profit,” Zillow.com shows for the property.
With the Toscana Way property no longer the property of Stolz, Fox Rothschild attorneys representing Patrick argue that, if Stolz’s schedules are to be believed, he’d have approximately $500,000 in sale proceeds for which he has not accounted.
That’s problematic, given his debts. Thus, a shift to Chapter 7 status by Landis would liquidate Stolz’s assets and ensure his creditors are paid. If that doesn’t transpire, Patrick’s attorneys argue, “there is every possibility that the debtor [Stolz] will abscond with the sale proceeds and sell his other assets outside the bankruptcy process to frustrate satisfaction of his creditors’ legitimate claims.”
Patrick has a judgment claim of $2,174,839.35 against Stolz, $2,126,657.35 of which is also secured by the Toscana Way property.
With a conversion to Chapter 7 of the case would come the appointment of a Chapter 7 Trustee.
