Debts Accrued By Deceased Mayor Helped Force Town of Moffett To File Chapter 9 Bankruptcy Protection
According to court records filed last month, one reason that the town of Moffett, Oklahoma filed for Chapter 9 bankruptcy protection was that their town’s former mayor, Billy Yandell, had acquired way too much debt for the town while in office. Yandell passed away last December from heart failure. He had served as town mayor for about a decade.
Recent reports indicate that Yandell accrued more debt than the board had been aware of and without its authority or approval. The town's debts include a number of credit purchases, including more than $4,900 in Lowe’s Commercial Services, $95, 208 for two vehicles, and over $3,200 in Dell Computers. Collection agencies are also owed money by Moffett, including $16,183.18 to AWA Collections.
An audit of the Moffett Police Department may have contributed to the town's lack of funds. It was discovered that more than half of the department's operating budget in 2003 and 2004 came from traffic tickets. The Oklahoma Department of Public Safety has indefinitely banned Moffett Police from engaging in any traffic enforcement over a four-mile strip on U.S. Highway 64.
The town filed their bankruptcy petition on December 20, 2006, and creditors are currently prevented from collecting debts owed by the town. According to court filings, Moffett has $199,396.28 in liabilities and $43,033 in assets.
Chapter 9 Bankruptcy, also called municipality bankruptcy, offers protection to a municipality in financial trouble while it reorganizes itself and figures out a plan to pay back creditors. Unlike other forms of bankruptcy, Chapter 9 does not allow for the liquidation of assets so the proceeds can be paid to creditors. Often, debts are reorganized by reducing the interest or principal owed, extending debt maturities, or refinancing.
Only municipalities are eligible to file for Chapter 9 relief, which can include, counties, cities, school districts, public improvement districts, townships, and revenue-producing bodies that offers services which are funded by users, including highway authorities, gas authorities, and bridge authorities.
Upon filing for Chapter 9 bankruptcy, an automatic stay ceases all collection actions against the debtor and its property. An additional provision of Chapter 9 expands the stay to include entities other than debtors, such as inhabitants of the debtor and officers of the debtor.
At Sagaria Law, P.C., we can help you file for bankruptcy petition. Many of our clients have successfully sought bankruptcy protection under Chapter 7, Chapter 11, and Chapter 13 of the U.S. bankruptcy code. We have also helped individuals and businesses successfully emerge from bankruptcy protection.
Sagaria Law, P.C. represent clients throughout Santa Clara County, Monterey County, and Alameda County, including the cities of Gilroy, San Jose, Fremont, Foster City, Carmel, Pacific Grove, Oakland, and Los Altos. Contact Sagaria Law, P.C. today to schedule your free consultation.
Debt incurred by former mayor prompted bankruptcy, Sequoyah County Times, February 7, 2007
Municipality Bankruptcy, U.S. Courts.gov
Related Web Resource:
Moffett Files Bankruptcy, Sequoyah County Times, January 31, 2007
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