Several media outlets have reported that a California winery owner, that has seen months of foreclosures on both her businesses and homes, has filed for a Chapter 7 bankruptcy to gain some relief.
P.K., in a last-ditch attempt to secure the survival of her winery, sought the bankruptcy to manage the three banking institutions she owes money to - Farm Credit, Bank of America and Sonabank.
The three institutions jointly lent an approximate $66 million to P.K., at first to expand her winery and then, to keep it running.
P.K. and her husband B.M made the Chapter 7 filing on June 15. Within the same week they also received a foreclosure notice on a gas station that they owned as well - the pumps of which had been closed since 2007.
Prior to the bankruptcy filing, the couple withdrew a lawsuit that they had filed against one of the banks that they owed money to stating that the institution had violated federal law several times.
Ed McMahon, the couple's bankruptcy trustee from Middleburg, said that dropping the lawsuit gives the couple more flexibility.
B.M. said, "The real story is that in February 2009, to save the winery, ( P.K.) gave (the bank) a lien with all her assets. We didn't think the recession would be as deep."
The winery, broken into five separate tracts by Farm Credit in an auction, gained the bank $7.3 million back - but not nearly enough to cover the $35 million the bank had lent to the winery.
Donald Trump purchased the bulk of the winery for $6.21 million. B.M. has claimed that Trump offered much more for the property before its division.
Trump now employs P.K. full time in the winery.
Bill Schmidheiser, Farm Credit's attorney, stated that the institution gained approximately $11 million for the sale of the winery's farm equipment. He also said that the gas station location, that would sell between $500,000 to $1 million, had an assessed worth of $1,134,600.
B.M. claimed that he had a buyer offering $650,000 for the property.
B.M. said, "The bank insisted we spend money for the sale. Our take is, since they've taken everything else, we're not spending more money for them to get the proceeds. We hope the bank makes more than $650,000, given their track record on foreclosures, we wish them luck."
A Sotheby's auction, including the sale of the couple's draperies from their former mansion - one set sold for $16,450 alone by a designer in Palm Beach - brought in $148,000, an amount more than what they had hoped for.
The couple's home, that they currently inhabited, was sold in an auction in May.
The winery is now solely using Trump's name.
B.M. said, "We're relieved, it's an opportunity to put this behind us. We're disappointed it came to this."
Whether you are filing for bankruptcy while working or unemployed, contact a bankruptcy attorney for help. Protecting as much of your personal assets require the help of an experienced attorney.