The Civil Cases Get Put On Ice

Well, there was a very interesting development today in the Chisholm cases. The magistrate judge overseeing both the Bardfield and DeForest cases, taking notice of the bankruptcy filing of Chisholm Properties Circuit Events (OMW), ordered both cases stayed (ie, put on hold) for the duration of the bankruptcy case:



(Note that the magistrate here made the same error I did when I first read the Suggestion of Bankruptcy...it's actually a Chapter 7 bankruptcy, not a Chapter 11 as these Orders mistakenly indicate.)

The decision here as it pertains to CPCE comes as no surprise; as I explained earlier, the "automatic stay" in bankruptcy is supposed to do just that. What is a bit of a surprise here is the generous (to the defense) decision, "for reasons of fairness as well as judicial economy and efficiency," to the stay the entire case, even as to the defendants in both these cases who have NOT filed for bankruptcy: Johnny Chisholm personally, Bobby Warner personally, and Johnny Chisholm Global Events (aka OMW Paris).

The order does not seem to be entirely final, however, as the magistrate has provided the option that "[a]ny party who objects to a stay of the entire case should immediately so inform the court." So, if someone is unhappy about this (hint: it probably won't be any of the defendants), you can bet we'll hear about it very soon...

Claims Come Rolling In

There have been three claims filed thus far by creditors of Chisholm Properties Circuit Events (OMW), two of which (disappointed ticket holders for $410.03 and $95.00) were not listed in the original bankruptcy filing Schedules:

Given the microscopic ratio of assets over debts in this case, it is unlikely that these two new claimants will ever see much as a result of their efforts here; but you do have to admire their pluck. If nothing else, they are making a statement by doing this, one that will now become part of the permanent court records of this country, for all posterity to see and view. And all it cost them, really, was a postage stamp.

You can find the forms used for making claims in this case here (see the "Proof of Claim" form).

In other Chisholm court news, it was pointed out to me by several readers that the 14 day deadline I listed for Chisholm's reply to the Motion for Default should have been October 23, not October 21 as I have been saying. And this is true...October 9 plus 14 days does indeed equal October 23. However, despite my inability to solve complex mathematical problems like 9+14=x, the net result was the same: The 23rd came and went, just as the 21st did, and Chisholm failed to file the reply demanded by the court by that date.

So what happens next should be interesting...according to the court dockets for both the Bardfield and DeForest cases:

ACTION REQUIRED BY MAGISTRATE JUDGE: Chambers of MAGISTRATE JUDGE ELIZABETH M TIMOTHY notified that action is needed Re: Order, - - No response to MOTION for Entry of Default Judgment as to DEFENDANT JOHNNY CHISHOLM. (cbj) (Entered: 10/26/2009)

Like I posted earlier, this should result in a default being entered against Chisholm personally...but whatever happens, hopefully we won't have to wait too long to find out.

The Remaining Schedules

The remaining CPCE bankruptcy Schedules were filed today, with the most interesting one probably being Schedule B, the list of "Personal Property." Since CPCE had no real property, this Schedule pretty much reflects all the actual claimed assets of the corporation.

Here's a quick summary:

Bank acct, Wachovia: $334.68
Bank acct, Beach Community Bank: $3,953.66

Accounts receivable, CircuiTicket ("Funds related to 2008 events"): $12,482.70

4 accts, American Express ("Accounts frozen purusant to Order in suit by Bardfield and Carver"): Unknown

3 accts, First Data ("funds on on hold pursuant to garnishment from suit by Bardfield and Carver"): Unknown

Apparently, those last seven frozen accounts are so well protected by the injunction Chisholm can't even do a balance inquiry on them.

So, total assets listed for OMW are $16,771.04, plus 7 frozen accounts listed as "unknown." And while those "unknown" accounts could very well be substantial, I'd say it's a sure bet they are very well under the 1.7 million or so in debt listed on Schedules E and F.

Indeed, I think we can safely infer they are well less than the $240,000 Bardfield and Carver were demanding in their lawsuit; otherwise, this rather damaging suit would have undoubtedly been settled by Chisholm a loooong time ago.

A New New Trustee, and a Re-Rescheduled Hearing

And once again, the Trustee change actually serves to accelerate this bankruptcy case, with the initial Meeting of Creditors now bumped up from December 1, 2009 to November 23, 2009, at 1:30pm in Pensacola:



Addendum: Filed late Friday:

Another Trustee Declines

Pretty self-explanatory. I imagine this will cause the Meeting of Creditors to be rescheduled (again) as well:

And a programming reminder, there are a couple of key deadlines tomorrow (October 21) to watch out for:

1) Deadline set by the bankrupcy clerk for Chisholm to file the missing Schedules to his Voluntary Petition; and

2) Deadline set by the magistrate judge for Chisholm to respond to the summary judgment motions filed against him personally in both the Bardfield and DeForest cases.

A New Trustee, and a Rescheduled Hearing

As you can see below, the bankruptcy court wasted no time today in appointing a new successor Trustee for the OMW bankruptcy case. In addition, the new appointment has caused the initial Meeting of Creditors to be rescheduled...actually bumped up two days, to December 1, 2009 at 10:45am in Pensacola:



Addendum: And this was filed late Friday:

A Trustee Bows Out

I don't know exactly what the backstory is on this new bankruptcy filing today; apparantly, there is some sort of conflict between the initially proposed Trustee and Chisholm. Perhaps not all that surprising, in a small city like Pensacola. In any case, since this Trustee is opting out, it looks like there will soon be a new Trustee appointed to oversee the Chisholm bankruptcy estate for the court:

Proof of Claim

A copy of the various initial notices sent out to creditors in the CPCE bankruptcy case, including the "Proof of Claim" form, was filed by the court today. These notices and forms contains some good basic information on what to do if you are a creditor in this bankruptcy case:

Fourteen (14) Days to Respond

The Magistrate in the Federal cases acted on the Motions of Default filed against Johnny Chisholm personally on Monday. She issued the same Order in each of the two cases: "Within FOURTEEN (14) DAYS from the date of docketing of this order, Defendant Johnny Chisholm shall file a response to Plaintiff’s motion." This gives him until October 21 to respond.

If Chisholm fails to respond (either pro se or via the supposed new attorney) within these fourteen days, the court should approve the default motions against him (I'm hedging here a bit, because as we've seen, this court has been strangely reluctant to enter defaults in these cases, even when the ground for such have been pretty clear):

The Automatic Stay

Now that we have a bankruptcy underway in addition to all the civil suits, I should probably take a moment and try to explain in laymans' terms one very important aspect of how the bankruptcy will affect things from here on out: The automatic stay.

As this Wikipedia entry explains, the "...automatic stay is an automatic injunction which halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy." As the entry indicates, it zaps into existence at the very moment the bankruptcy is first filed (which in this case was Tuesday, October 6).

Notice that the debt collection actions prohibited include "...beginning or continuing judicial proceedings against the debtor..." So, what this means is, the various civil lawsuits must come to a grinding halt. The plaintiffs (who are "creditors") cannot continue pursuing their lawsuits. This means they can't file any new motions against the now bankrupt Chisholm Properties Circuit Events, LLC (CPCE); the lawsuit versus them is basically on hold for the duration of the bankruptcy.

Notice however that there are other defendants in the civil suits who have NOT filed for bankruptcy...Johnny Chisholm personally, for example. The lawsuits should be able to proceed against the non-bankrupt parties as normal; to do this, the lawsuits will likely be split, with the now bankrupt CPCE being segregated in a seperate lawsuit (that will be put on hold as per the automatic stay). This procedure is known as "disaggregation," and I'm guessing we'll see that happen in these civil suits soon...

Notice of Deficiency

As I mentioned in the previous post, there were some Schedules missing from yesterday's bankruptcy filing. Today the bankruptcy clerk noticed that problem too:


From what I've been told, this is a not-too-uncommon phenominon in bankruptcy; filers are often in a hurry to file these Voluntary Petitions, in order to meet some crisis and stave off creditors at the 11th hour. And when there is not enough time to gather all the info for all the schedules, an incomplete filing is made. The court simply gives the filer more time (in this case, until October 21) to make up the deficiencies.

I imagine this Voluntary Petition was rushed out the door on Tuesday, to throw a monkey wrench in the 4 Motions for Default that were filed against Chisholm in the Federal cases on Monday.

One Mighty Bankruptcy

Johnny Chisholm's OMW company, Chisholm Properties Circuit Events, LLC, filed for Chapter 7 bankruptcy protection yesterday.

Yes, that's correct, Chapter 7. In my haste to post the news on Facebook yesterday I misread the filing, and misreported it as a Chapter 11:


"Title 11" actually refers to the entire bankruptcy code. "Chapter 11" is one of it's subdivisions, as is "Chapter 7."

The difference is a big one. Chapter 11 bankruptcy of a corporation is an attempt at a reorganization, trying to keep the business alive. Chapter 7 is, on the other hand, essentially a liquidation.

In other words, One Mighty Weekend is now dead. Not exactly a surprise to anyone here I'm sure, but at least now we can say it's official.

Because of the immense historical significance of this document, I'll post the entire initial bankruptcy filing below. But first I'll summarize the really interesting parts, ie, the now fully revealed assets and liabilities of One Mighty Weekend:

Assets
-------
Estimated at: "$0 to $50,000"

Debts (all unsecured):
-------
Florida Department of Revenue: Unknown
Internal Revenue Service: $1,926.17
A & R Radio Rentals, Inc.: $1,529.34
Access Pass & Design: $3,117.98
Amscot Corp., Dept C: $488.00
Arabian Nights: $48,000.00
Arlene Weiss: $52,300.00
Art F/X: $1,025.00
Big Events: $6,000.00
Casswood Insurance Agency: $23,903.07
Christie Lites Orlando Rentals: $25,265.37
Disney Resort Destinations: $495,874.67
DW Uniform Creations: $4,209.90
Event Marketing & Management: $3,000.00
Evigna Brand Insight: $13,626.86
Freeman Companies: $6,296.71
Harddrive Productions, Inc.: $ 13,710.00
Hotflyers.com: $5,541.21
Hyatt Regency Grand Cypress: $14,691.87
In Magazine: $6,152.04
Karl's Event Rental: $29,659.00
Lasersonics: $9,006.61
Masterson Elec. Contracting: $2,800.00
Maximum Event Staffing: $10,375.00
Mears Transportation: $11,033.00
Metropolis Productions: $18,000.00
Presentation Services: $43,212.47
Production Resource Group: $310,514.00
RMC Corporation: $101,957.01
S. Bardfield & C. Carver: $200,000.00
T-Mobile: $405.35
Unique Option: $6,800.00
Universal Orlando: $249,007.00
Universal City Dev. Partners: Unknown
UPS: $ 1,700.69
-------
GRAND TOTAL DEBT: $1,719,202.15

Looking at this list, we can see some Chisholm creditors we're already familiar with, such as "S. Bardfield & C. Carver," "Production Resource Group," and "Universal Orlando." But as you can see, there are also some new revelations here. The biggie being of course (drum roll):

Disney Resort Destinations: $495,874.67

Now, remember back to last May, folks? When Chisholm and JustCircuit were denying Disney was owed ANY money at all? That the real reason for the loss of the Disney venues was unexpected "last minute price increases" by Disney, hence it was all Disney's fault? Remember those oft-regurgitated JustCircuit talking points?

Well, I guess we can now say...that was a bit of a fib. Or, another way to put it: They were only off by $495,874.67.

Below is the actual initial filing, known as a "Voluntary Petition," along with the Schedules. Notice there are missing schedules (A, B and C), those will probably be filed later.

There was another filing too (not posted), the "Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines," which I can easily summarize: It sets the date for the initial hearing, the "Meeting of Creditors" for December 3, 2009, at 9:15am, in Pensacola. If you are on the list above, and there is something special you'd like to say as the bankruptcy get underway...this'll be where you'll want to be.

The full Voluntary Petition can be viewed here.