Anybody can fall on hard times — even people whose lifestyle afforded them the ability to amass collections of significant historical and actual value.
However, when those people end up filing bankruptcy, the bankruptcy trustee usually requires those debtors to turn over their collections so that they can be liquidated. The cash is then used to repay creditors.
Sometimes, however, debtors get creative in order to try to hang onto their collections.
In this case, the former attorney to the Civil Rights Era’s icon Rosa Parks and singer Aretha Franklin is accused of using a nonprofit shell to hide his collection of memorabilia.
The issue seems to have turned into a war between the debtor and the bankruptcy trustee. The legal fees amassed trying to collect the memorabilia have already exceeded four times the value of the items so far recovered.
In frustration, the trustee’s attorney had filed a motion seeking to jail the debtor for hiding assets. The debtor finally surrendered many of the items in his possession — including a first-edition book written and signed by Booker T. Washington in 1901. However, several key items still haven’t been located.
Missing items include the key to Detroit that Rosa Parks once received, a rough draft of the book Parks wrote, iron shackles once worn by African-American slaves and gold records awarded to Aretha Franklin.
The items still missing are supposed to be worth several hundred thousand dollars.
It remains to be seen what happens next. Cases like this show how deep trustees can dig when they’re determined to keep debtors from violating the intent of bankruptcy laws. Bankruptcy is meant as a safety-net for debtors in genuine distress — not a shield that people can use to protect their wealth when their debts get out of control.
Asset forfeiture is something that most people filing personal bankruptcy can avoid — but those with items of extraordinary value should expect to have to surrender some items in order to receive the benefits of a fresh start.
Source: US News Best States, “Detroit Lawyer Turns in Rose Parks Items in Bankruptcy Case,” Dec. 05, 2017
