In prior mailings by the Bankruptcy Court in connection with the Siskey-related bankruptcy cases, the Court referred to a deadline for submitting proofs of claim in the cases as July 24, 2017. However, the Bankruptcy Court has since corrected the deadline for submitting proofs of claim in the cases to now be August 23, 2017. Again, the Trustee requests that creditors refrain from filing proofs of claim until after the May 25, 2017 meeting of creditors.
Richard C. Siskey, prior to his death, held title to certain real property located at 3545 Sharon Road, Charlotte, NC 28211 with his wife, Diane Siskey, as tenants by the entirety (the “Primary Residence”). Diane Siskey, with the cooperation and approval of the bankruptcy trustee, has listed the Primary Residence for sale with Dickens Mitchener & Associates (see https://dickensmitchener.com/listings/cmls-3273066-3545-sharon-road-charlotte-north-carolina-28211/). Diane Siskey wishes to sell the Primary Residence as soon as possible and has agreed to place the net proceeds generated from the sale of the Primary Residence into an escrow account pending further order from a court of competent jurisdiction.
On April 21, 2017, the Clerk of Court for U.S. Bankruptcy Court filed and mailed to known creditors written notices of the Siskey-related bankruptcy cases (In re TSI Holdings, LLC (17-30132), In re WSC Holdings, LLC (17-30338), In re SouthPark Partners, LLC (17-30339), and In re Sharon Road Properties, LLC (17-30363)). A copy of the notice filed in the TSI Holdings, LLC bankruptcy cases is linked below (all of the notices were substantively identical).
As stated in the notices, a meeting of creditors pursuant to Section 341 of the U.S. Bankruptcy Code will be held on May 25, 2017 at 2:00 p.m. in Suite 205 at 402 W. Trade Street, Charlotte, NC 28202. The Trustee will provide those in attendance with a case update and an opportunity to ask questions about the Trustee’s administration of these cases. You are not obligated or required to attend, and a failure to attend will have no impact on the rights or remedies available to you in these cases.
As also indicated in these notices, a deadline for submitting proofs of claim in these cases has been set for July 24, 2017. The Trustee requests that creditors refrain from filing proofs of claim until after the May 25, 2017 meeting of creditors, as the Trustee has asked the Court to approve alternative procedures for filing claims in these cases. Filing claims prior to the the meeting of creditors could result in the unnecessary burden of creditors having to file multiple proofs of claim for the same debt and, as a result, unnecessary complexity in the Trustee’s claims review.
On April 19, 2017, the Trustee filed three procedural motions in each of the four Siskey-related bankruptcy cases: a motion to jointly administer the four cases; a motion regarding proof of claim procedures; and a motion regarding service of future motions. Copies of the motions, and notice of hearing, filed in the TSI Holdings, LLC bankruptcy case are linked below (the versions filed in the other bankruptcy cases are identical to the linked motions).
The joint administration motion asks the Bankruptcy Court to combine the four cases for procedural purposes only, under the caption of the TSI Holdings, LLC bankruptcy case (case no. 17-30132).
The proof of claim procedures motion asks the Bankruptcy Court to approve (i) an addendum to the standard proof of claim form that must be used by investors asserting claims in these cases; (ii) a proof of claim filing deadline applicable to all four cases; and (iii) relieving investors from any obligations to file supporting documentation evidencing their claims (other than an executed standard proof of claim form and addendum).
The service motion asks the Court for authority to limit service in these bankruptcy cases by serving all pleadings only: (i) on parties requesting notice through the Court’s electronic notification system; (ii) by posting on this website; and (iii) by email for investors who have provided valid and current email addresses. The only exception is that objections to claims will be sent by first class mail, postage prepaid.
If you do not want the Court to approve these motions, or if you want the Court to consider your views, then on or before May 10, 2017, you or your attorney should do the following: (1) file a written response explaining your position with the Court; (2) mail, fax or email a copy of your response to the Trustee; and (3) attend a hearing on your response, to take place at 9:30 a.m. on May 22, 2017 in Courtroom 1-4 of the Federal Courthouse, 401 W. Trade Street, Charlotte, NC. If you or your attorney do not take these steps, the Court may decide that you do not oppose the relief the Trustee requests and may enter an order approving the motions.
On April 17, 2017, the Trustee filed bankruptcy schedules and statements of financial affairs (the “Schedules”) for: WSC Holdings, LLC in case number 17-30338; SouthPark Partners, LLC in case number 17-30339; and Sharon Road Properties, LLC in case number 17-30363. The information appearing in the Schedules is based on the best information available to the Trustee at the time of filing the Schedules. Nothing in the Schedules limits any person from submitting claims in any amount against the WSC Holdings, LLC, SouthPark Partners, LLC, or Sharon Road Properties, LLC bankruptcy estates. Similarly, nothing in the Schedules limits the Trustee from pursuing assets that the Trustee was unaware of at the time of filing the Schedules.
On April 5, 2017, the Trustee filed bankruptcy schedules and a statement of financial affairs (the “Schedules”) for TSI Holdings, LLC in case number 17-30132. The information appearing in the Schedules is based on the best information available to the Trustee at the time of filing the Schedules. Nothing in the Schedules limits any person from submitting claims in any amount against the TSI Holdings, LLC bankruptcy estate. Similarly, nothing in the Schedules limits the Trustee from pursuing assets that the Trustee was unaware of at the time of filing the Schedules.
The Trustee has received many inquiries regarding how the chapter 7 bankruptcy process works, how claims should be filed, when claims should be filed, how distribution amounts will be determined, when distributions will occur, and related questions. The below summary is intended as a very basic overview of how the Siskey-related bankruptcy cases may function within the chapter 7 framework.
Initiation of Case and Filing of Schedules: After entry of the order for relief in an involuntary bankruptcy case filed against a corporate debtor, the corporate debtor is called upon to file bankruptcy schedules and a statement of financial affairs. These bankruptcy papers are intended to disclose pertinent financial information about the debtor, including all assets, all liabilities, current income, current expenses, and certain historical data (e.g., past income, past transfers of assets, past lawsuits by or against the debtor).
Nuance in the Siskey-related cases: Considering the death of Rick Siskey and potential criminal liability of others involved with the bankruptcy debtors, no representative of the debtors with actual knowledge of the information to be included in the bankruptcy schedules and statement of financial affairs is able and willing to prepare such papers. This task has been left to the Trustee, who is in the process of preparing the schedules based on the best information reasonably available to the Trustee at this time. The Trustee contemplates filing the bankruptcy schedules and statement of financial affairs for TSI Holdings, LLC by April 7, 2017 and within a few weeks thereafter for the other debtor-entities.
Meeting of Creditors: After the bankruptcy schedules and statement of financial affairs are filed, Section 341 of the Bankruptcy Code (11 U.S.C. § 341) requires the Bankruptcy Administrator to convene a meeting of the debtor’s creditors and interest holders. During the meeting of creditors and interest holders, the bankruptcy trustee typically asks the debtor questions about the bankruptcy papers and the debtor’s financial affairs more generally, which questions the debtor answers under oath. Interested parties are also given the opportunity to question the debtor under oath.
Nuance in the Siskey-related cases: Similar to the preparation of the bankruptcy schedules and statement of financial affairs, no representative of the debtors with actual knowledge is able and willing to participate in the § 341 meeting. The Trustee contemplates providing interested parties a case update at the 341 meeting and an opportunity to ask the Trustee questions about his administration of these cases. While no 341 meeting has been scheduled as of the date of this post, one will be scheduled within forty (40) days of the filing of the bankruptcy schedules and statement of financial affairs. Once scheduled, the Trustee will post notice thereof on this website and a written notice will be circulated to interested parties.
Proofs of Claim: Within ninety (90) days of the original date set for the 341 meeting (or 180 days for governmental entities), creditors must file a proof of claim in order to be entitled to a distribution from the assets of the bankruptcy estate. Proofs of claim are filed electronically through the Bankruptcy Court’s website: http://www.ncwb.uscourts.gov/creditor-filing . Absent extraordinary circumstances justifying a delay, the failure to meet this deadline results in the disallowance (for purposes of the bankruptcy distribution) of any untimely claims.
Nuance in the Siskey-related cases: The Trustee suspects that, like in typical Ponzi Scheme cases, the vast majority of the allowable claims in these cases will be based on restitution of the amount invested with the debtor-entities, less any pre-petition amounts received from the corresponding entity(ies). The standard proof of claim form, however, is designed not for such restitution claims, but rather for claims more commonly filed in bankruptcy (e.g., tax debts, domestic support obligations, and contract claims). To deal with this, the Trustee has developed a form addendum to the standard proof of claim form that will be posted on this website and on the official website for the U.S. Bankruptcy Court for the Western District of North Carolina (http://www.ncwb.uscourts.gov/). The Trustee will seek court approval, after notice and opportunity for hearing, of the form addendum as a necessary attachment to any allowable proofs of claim submitted in these bankruptcy cases.
Claims Determination Process: After the expiration of the deadline for filing all claims, the trustee will review all claims filed in the bankruptcy case and make recommendations to the court regarding the allowance or disallowance of any and all claims for the purposes of receiving a distribution from the bankruptcy estate.
Nuance in the Siskey-related cases: None apparent at this time.
Investigation and Recovery of Assets: Simultaneously with the claims filing and allowance process, and assuming the bankruptcy schedules and statement of financial affairs indicate that assets may be available for the distribution to general creditors, the trustee will investigate all tangible and intangible assets potentially available for the trustee to liquidate for the benefit of creditors and will pursue those assets (unless the value of the asset appears to be less than the anticipated cost of pursuing the asset, in which case the trustee will “abandon” the asset). The timetable for this process varies widely, not only case-by-case, but also asset-by-asset. For example, real property interests may be sold in a matter of months or may take years to sell, based primarily on uncontrollable and unpredictable market forces. Similarly, any causes of action held by the trustee could be settled in a matter of months or may take years to resolve with formal litigation. All proposed dispositions of assets of the estate by the Trustee (whether a proposed sale, a proposed settlement, a proposed abandonment, or otherwise), is subject to court approval, after a notice and an opportunity for hearing made available to all interested parties.
Nuance in the Siskey-related cases: None apparent at this time.
Distribution Process: After the claims have been determined and assets have been liquidated, the trustee will disburse funds collected by the trustee, after deducting all expenses incurred in the administration of the bankruptcy estate, pursuant to a statutory priority scheme set forth in Section 726 of the Bankruptcy Code (11 U.S.C. § 726). With court approval, the Trustee can make an interim distribution, at such time as claims have been determined and some, but not all, assets liquidated.
Nuance in the Siskey-related cases: None apparent at this time.