There are just some cases where you wish you could be there to see the look on the Judge’s face when they hear a defense, and one such recent case can be found in re Gordon, ___F.Supp.2d ____, 2012 WL 255274 (N.D.Ga., Jan. 24, 2012). As reported in Forbes, Mr. Derrick Dewayne Gordon has given voice to the many persons filing for bankruptcy by complaining it was like slavery or peonage… only that was his defense against actually filing for Chapter 11 bankruptcy.
It’s especially hard to believe Mr. Gordon once you learn the circumstances. In brief, he was sued for running afoul of a non-compete clause and, having managed to have that reversed on appeal, went out to prevent having to pay for the $335,000 in legal fees that the court didn’t reverse. His strategy was to file for Chapter 7 bankruptcy, at which his former employer balked and wanted to either move him to Chapter 11 (which uses a payment plan over the full discharge of Chapter 7) or reject the bankruptcy out of hand. Indeed, Mr. Gordon was about to rack up a $250,000 annual salary, but that doesn’t change the principal, or so he would contend, that he is therefore put into a condition of servitude against many laws. The court didn’t bite, and even if you had figured that out already you can read all about it here.
This case is something of an outlier, if an amusing one, but it also goes to show a few core realties to bankruptcy and asset protection. Firstly, that the purpose of bankruptcy is not to protect the bankrupt but to marshal their assets for their creditors, whichever chapter will get that accomplished most completely. Second, that the court isn’t one for tricks and last-minute strategies; asset protection is a real exercise in understanding your assets and keeping them out of harm’s way as much as possible.
For more information on assett protection, visit Meier Law Firm today.
Reference: Forbes (January 31, 2012) “Gordon: Debtor Asserts Concepts Of Slavery And Peonage To Try To Avoid Chapter 11 Bankruptcy”