Bankruptcy Fraud Attorneys; The Importance of Disclosing Assets
When Peter Pocklington declared bankruptcy in 2008, he filed documents with a U.S. bankruptcy court indicating ownership of only $2,900 in assets. What the former owner of the National Hockey League team Edmonton Oilers failed to disclose led prosecutors to charge Peter Puck, as he is known, with bankruptcy fraud. Puck’s unreported assets included valuable Stanley Cup rings, Andy Warhol prints, two offshore bank accounts and numerous other valuable assets hidden away in storage facilities, according to federal prosecutors. Pocklington owed $19.7 million to creditors.
Pocklington and his wife reached an agreement with the trustee appointed by the bankruptcy court to oversee the bankruptcy case allowing the trustee to distribute many of the newfound assets to creditors. Assets such as the Stanley Cup rings and Warhol prints were seized in raids on the Pocklingtons’ home, while agents from the FBI later found other assets in rented storage facilities near Pocklington’s California residence, according to Canwest News.
Bankruptcy Laws: To Protect or Harm?
The bankruptcy laws are designed to provide relief to a debtor such as Pocklington by either restructuring debt payments or forgiving debt altogether (“discharge”). The debtor files schedules with the bankruptcy court listing all debts to all creditors and all assets. In complicated cases such as Pocklington’s, a bankruptcy trustee is sometimes appointed to work with the debtor and creditors to divvy up the assets. Certain assets, for example, a primary residence and personal items such as clothing, are excluded from the pool used to repay creditors.
There’s a pecking order among the creditors according to the priority the bankruptcy code assigns to their claims. Creditors whose loans are secured with liens on specific property may get full payment, while general creditors at the bottom of the heap may get pennies on the dollar. Concealing assets to keep them from creditors is a federal crime, bankruptcy fraud.
The Edmonton Journal reported that Peter Puck’s trial on bankruptcy fraud charges is set for June 29. If convicted, Pocklington could be sentenced to 10 years in jail.
The Charges Against Pocklington
The bankruptcy fraud charges against Pocklington stem from an August 2008 bankruptcy filing. On his bankruptcy schedules, Pocklington disclosed only $500 in memorabilia and trophies among his total $2,900 reported assets. Two months earlier, Pocklington participated in a public auction to sell five Stanley Cup rings for more than $300,000. Pocklington listed other sports memorabilia in the same auction. At the time of the auction, Pocklington said he was selling the Stanley Cup rings to fund his grandchildren’s education.
Despite reports that the rings were bought at auction, Pocklington apparently retained ownership, according to the Edmonton Journal, and these are the same rings apparently turned over to the trustee after the bankruptcy fraud case was filed.
Beyond the hidden assets, the bankruptcy fraud filings charge that Pocklington “swindled scores of people” then fled to Canada with “an international trail of creditors hot on his heels,” the Vancouver Sun said. The bankruptcy filings contend that Pocklington gained control over various plaintiff companies with personal guarantees backing promises of cash infusions only to squander their assets and declare them bankrupt.
Consult With a Bankruptcy Fraud Attorney
The Pocklington case illustrates how failure to disclose assets can land an individual in hot water, with charges of bankruptcy fraud. Bankruptcy laws can be complex and confusing to navigate, if you are facing bankruptcy fraud charges or have questions about reporting your assets during a bankruptcy, speak to an attorney in your area.