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Trustee Claims Arnold Smith Bankruptcy Filed in Bad Faith

Monday, September 7, 2015, 5:15 pm News Flash Archive

The Bankruptcy Trustee, Harold J. Barkley Jr., has called upon the bankruptcy court to throw out Dr. Arnold Smith's bankruptcy petition because, among other reasons, "the Debtor is solvent and not delinquent on any debts and therefore this case has been filed in bad faith."

The Trustee's motion asking for dismissal may be viewed here: Trustee's Objection to Bankruptcy Plan

Smith had filed for bankruptcy on March 27, 2015, as first reported by The Taxpayers Channel: Dr. Arnold Smith files for Bankruptcy

When Smith's wife finally filed the details of his bankruptcy claim, it transpired that Smith claims to be worth $10 million, including over $8 million in retirement and profit sharing plans. Smith claims to owe a grand total of only $268,448, with $177,000 of that "owed" to his wife, Mary K. Smith, who is also the person filing Smith's bankruptcy petition on his behalf. These bankruptcy disclosures may be seen here: Smith Bankruptcy Schedules.

In addition to alleging Bad Faith, the Trustee also claims that Smith has paid his bankruptcy attorney, Craig Geno of Memphis, more legal fees than allowed for this bankruptcy. The Schedules disclose that Geno has received more than $25,000 for his services to Smith thus far, and a number of additional attorneys and law firms have also been hired by Smith in the matter.

The Trustee also claims that the plan is not feasible, that it is missing critical pieces of information, and that Smith has failed to list all of his unsecured debts properly.

When the bankruptcy was first filed, it appeared that its real purpose was to stymie the court proceedings against Smith by Lee Abraham, whose suit against Smith for allegedly plotting to kill him was set for trial this summer. The Bankruptcy filing by Smith blocked that trial from proceeding as scheduled.

But now, the Bankruptcy Trustee has told the court that Dr. Smith is not bankrupt, is not behind on his debt obligations, and is not entitled to protection under the bankruptcy process.

John Pittman Hey
The Taxpayers Channel

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