Henrik Dorssers asked the Court to hold off on distributing cash to creditors. With little analysis, the Court denied the motion, paving the way for unsecureds to get paid.
By the way, who is Henrik Dorssers anyway? And what is his connection to the eastside/Mastro? Anyone know?
Here is Rigby’s opposition to Dorssers’ motion in the Mastro bankruptcy. And here is the declaration in opposition to the motion, with numerous transcripts from the court’s oral rulings.
UPDATE: The Court granted the motion. Mark your calendar. Hazelrigg’s schedules are due April 9.
Here’s the latest update. The bankruptcy court is requiring Hazelrigg to produce schedules summarizing his assets and liabilities. Hazelrigg responds that he needs an additional sixty days because his bookeeper died and he is thus having trouble rounding up documents. The request for more time is here.
In the request, Hazelrigg doesn’t mention as one reason for delay the unnamed creditor that cleaned out his apartment – records and all – at his downtown Seattle condo (the Klee). This was the excuse offered in litigation in eastern Washington over interest in one of Hazelrigg’s Centurion entities. So we take the omission in the latest request, pictured above, to mean that he has since obtained the documents and could produce them, right? Also, what happened to his asserting the Fifth Amendment privilege against incriminating himself?
If we were Rigby, we would move quickly to get whatever information we could out of Hazelrigg, even if incomplete, to prevent memories from fading or documents from being lost. This would be one of those cases where an early deposition could be valuable …
Oh yeah, one other thing. If Hazelrigg is now pro se, he won’t be able to represent any of his LLC’s, even if he’s the only member. We posted about the pro se exception to single member LLC’s awhile back, and here’s the post.
The plot thickens.
Tom Hazelrigg III’s attorney, Marc Stern, filed a motion to withdraw from representing Hazelrigg in his bankruptcy. The reason given is that there is nothing for him to do. He says that he was hired only to contest venue, and that is lost, and since Hazelrigg intends to not submit schedules, or answer any questions (under the Fifth Amendment to the U.S. Constitution (right against self-incrimination)), there is no role for him as Hazelrigg’s attorney.
Of special note, Stern states in the subjoined declaration that “there is no money to pay [him].” Correct me anyone, but I think declarations made “to the best of one’s knowledge” are insufficient foundation for admissibility. We think declarations must be based on personal knowledge, right? If we were Stern, we sure wouldn’t be signing a declaration attesting that Hazelrigg has no money. Just sayin’ ….
TEP has no clue how the petitioning creditors will respond. We guess if Hazelrigg remains silent – i.e. won’t be defending - it will be easy for Rigby and Co. to win the numerous fraudulent transfer actions and other veil-piercing lawsuits we expect against Hazelrigg, his kids, the various Centurion entities, ANT ONE, TRH Lenders or whatever else is out there… So maybe Hazelrigg just made Rigby’s job easy.
Most people think of prenuptial agreements as something rich men use to keep their assets from falling prey to their new, less wealthy (and usually younger) wives — the gold-diggers.
Others see it as a sign of mistrust. If you need a
prenuptial agreement, you must not trust your future spouse.
I see it differently.
When I married my wife, neither of us had assets to protect, so our agreement was not about protecting assets. Rather, it was about what in our relationship we would value and how we would value it. We committed it to writing because memories fade over time and because we are both lawyers.
Click here to read more.
Hendrik “Harry” J. Dorssers and Concept Dorssers – who are Mike Mastro creditors – filed an emergency motion in the U.S. District Court for the Western District of Washington, seeking to block the bankruptcy trustee, Jim Rigby, from distributing approximately $2.8 million to unsecured creditors. The Seattle Times reported on the anticipated distribution here.
Here are the facts: In December, 2008 Dorssers loaned $1.2 million to the Mastros, secured by real property. (Mike Mastro is pictured above.) The note rate was 10 percent, callable “on demand.” Dorssers were in second position. After receiving their deed of trust, they realized they were not sufficiently secure, there being insufficient equity in the real property. (See TEP’s upcoming post on “Classic Mastro & Hazelrigg Maneuvers.”)
So Dorssers threatened to call the note. Mastro then offered up his Medina home as new security, and signed a new note for “as much as may be disbursed to or for the benefit of [Mastro] to a maximum of $12 million.” This blanketed up the house from other creditors.
Rigby sued Dorssers, claiming that the loan was a fraudulent conveyance – meaning that Mastro either intentionally hindered other creditors while he was insolvent, or did not receive equivalent value for what he gave up. In other words, the loan was a sham in order to protect Mastro’s assets from other creditors. See TEP’s older post on asset protection/fraudulent conveyances, here. Rigby won. Dorssers has appealed.
In the meantime, Rigby is set to distribute the bulk of the bankruptcy estate to creditors. If Dorssers wins the appeal, and the money is already distributed, then Dorssers could be left high and dry (unless Rigby wants to personally make Dorssers whole). Hence the request to block the funds’ distribution pending the appeal.
The emergency motion is a good read, and well written, and available for download here.