In California’s East Bay, Efforts By Bankruptcy Trustee To Collect Money Angers Creditors
A number of investors who lost money when trusting East Bay investment executive Francis "Bill" Reimers to make investments for them are angered by the decision of a federal trustee to get money from them as part of the bankrupty proceedings involving Reimers and his companies. At least 20 individuals say they collectively lost $10 million dollars in investments because of Reimers. Yet bankrupty trustee John Kendall may have grounds to collect payment from them for the money that Reimers owes because these investors became creditors the moment Reimers filed for bankruptcy. The trustee has claimed in court records that the transfers of money up to one year prior to Reimers filing bankruptcy were "preferential" or "fraudulent."
Attorneys for Kendall have filed complaints asking for a combined total of $5 million from at least 36 parties. 30 of these parties are individual investors. Six of them are companies. The trustee is demanding about $828,000 from one local Benicia investor.The trustee is also demanding $693,000 from American Express Credit, $258,000 from First USA Bank, $58,000 from Bank of America, $16,000 from MBNA America, and $6,200 from Banc One Credit Card.
Reimers had filed for involuntary bankruptcy.
There are three types of trustees in bankruptcy cases.
Chapter 7 trustee: This person is appointed by the US Trustee as administrator of a Chapter 7 case. It is his or her job to determine whether any assets exist that can be liquidated, to review any exemption claims, as well as evaluate the debtor’s right to a bankruptcy discharge of debts.
The trustee can file objections to exemption claims and oppose the debtors’ discharge, but he cannot make decisions about these claims or the discharge. Trustees are paid from the bankruptcy filing fee that a debtor pays to the court when filing for bankruptcy protection.
Chapter 13 trustee:
Also appointed by the US trustee, this person administers a Chapter 13 bankruptcy case. He or she is also the agent who pays creditors under the debtor’s repayment plan. A chapter 13 trustee is responsible for all the cases in their district and is paid a small percentage of the funds that come through their Chapter 13 cases.
United States Trustee
This person is a government worker and it is their job to appoint and supervise the Chapter 13 and 7 trustees. Responsibilities of a US Trustee include:
*Periodically reviewing the trustees' case reports, budget reports, bank account information, management skills, court performance, and similar information.
*Ensuring that trustees are bonded.
*Ensuring that trustees are independently audited.
*Determining trustees' maximum annual compensation and actual necessary expenses.
*Providing training for trustees.
*Monitoring trust account funds.
Sagaria Law, PC represents clients in Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Monterey County, Alameda County, Santa Clara County, and the surrounding areas. For a free, no obligation consultation with one of our bankruptcy attorneys, contact Sagaria Law, PC today.
Ex-investors say court is piling on, Contracostatimes.com, December 12, 2006
The U.S. Trustee's Role In Consumer Bankruptcy Cases , US Doj.gov
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