ILNews

No bankruptcy abuse by ex-mayor

Back to TopCommentsE-mailPrintBookmark and Share
Indiana Lawyer Rehearing

Reversing her earlier decision, U.S. Bankruptcy Trustee Nancy Gargula in the Northern District of Indiana determined March 7 that former East Chicago Mayor Robert Pastrick’s income is not too high to qualify for Chapter 7 bankruptcy and his filing should not be considered to be an abuse of the process.

That decision comes in an ongoing legal battle between the ex-mayor and state of Indiana. The Indiana attorney general’s office is trying to collect a $108 million judgment issued last year against the former political titan in a racketeering judgment. The trustee ruled Feb. 7 that based on an initial review of documents, there was presumed abuse in Pastrick’s bankruptcy case filed in December. She had 30 days to file a motion to dismiss the Chapter 7 case or convert it to a category that required repayment, but she changed her stance after reviewing the case material and other documents filed since then.

Responding to the trustee’s finding, the AG’s office issued a statement saying this doesn’t change the state’s position that the full racketeering judgment isn’t dischargeable by bankruptcy. Details haven’t been finalized on what would happen to any funds collected in this case, spokesman Bryan Corbin said, but he noted the AG’s office routinely collects debts and judgment amounts on behalf of government clients and has a process for handling that money.

The $108 million judgment stems from a sidewalks-for-votes scheme that played out in the 1999 Democratic mayoral primary election, to which Pastrick and two of his top aides admitted. Last year, U.S. Senior Judge James Moody issued a ruling in State of Indiana and City of East Chicago v. Robert A. Pastrick, et al., No. 3:04-CV-506, ordering the $108 million in damages. That collection activity has been put on hold by these bankruptcy proceedings.

 

Rehearing: "Bankruptcy delays collection effort" IL Jan. 5-18, 2011

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
2015 Distinguished Barrister &
Up and Coming Lawyer Reception

Tuesday, May 5, 2015 • 4:30 - 7:00 pm
Learn More


ADVERTISEMENT
Subscribe to Indiana Lawyer
ADVERTISEMENT