Some of the real estate Chris Pettit transferred before filing bankruptcy will be returned under deal


SAN ANTONIO — A judge this week approved a settlement involving numerous properties that former San Antonio attorney Christopher “Chris” Pettit transferred before filing for bankruptcy in June.

As part of the transaction, seven properties he transferred to Sin Reposo LLC — including buildings formerly occupied by his now-defunct law firm — will be transferred to his bankruptcy estate. The Chapter 11 liquidator simultaneously obtained court approval to hire a real estate agent to handle the sale.

“It makes a lot of sense and reflects what I believe will be a pretty significant return on the property,” Chief Bankruptcy Judge Craig Gargotta said of the settlement during a court hearing Wednesday.

“Hopefully, these funds will eventually be returned to the creditors in this case, who are of course the people who have represented Mr. Pettit throughout the course of his law practice,” the judge said. “So every day there’s a delay for these people getting back some of their money that they entrusted to Mr. Pettit.”

Pettit’s law firm reported $13.8 million in assets and $112.8 million in liabilities in its latest bankruptcy plans.

He filed for bankruptcy for himself and his firm and gave up his license to practice law after allegations of stealing tens of millions of dollars from his clients. He specialized in estate planning and personal injury cases, but also offered financial advice and investment management services.

On ExpressNews.com:

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Pettit has been in jail since Sept. 8, when Gargotta found him for violating a court order of contempt. Pettit, who attended the hearing by phone on Wednesday, did not dispute the settlement.

Offers before bankruptcy

Pursuant to the agreement, Pettit and related companies entered into a series of real estate transactions from January through April. Sin Reposo purchased nine properties for nearly $4.8 million, including closing costs and fees. Sin Reposo said the transactions freed nearly $15 million in debt owned by Pettit.

Pettit needed cash to pay Dr. Paying Salvador Ortiz, a client who filed suit because Pettit claimed to have taken nearly $11 million in his favor that Ortiz spent to fund an irrevocable trust. In March, Ortiz obtained nearly $11.8 million in court judgments against Pettit and his company, a figure that later increased to more than $13 million due to interest charges.

Ortiz received about $2.6 million from Pettit’s various real estate sales, the settlement shows.

Eric Terry, the Chapter 11 trustee, claimed he could reverse the transactions with Sin Reposo essentially because Pettit and its affiliates entered into them with the “actual intent to impede, delay or defraud creditors.” The power to “avoid the transactions” prevents pre-bankruptcy payments to one creditor at the expense of other creditors.

On ExpressNews.com:

Ex-San Antonio attorney Chris Pettit sold multiple properties to the same buyer prior to the massive bankruptcy

Properties that Pettit transferred to Sin Reposo included:

• 11902 Rustic Lane, San Antonio. It is the building that housed Pettit’s main office and was estimated at $650,000.

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• 11923 Rustic Alley. Pettit used the building to hold presentations for potential clients. It was estimated at $700,000.

• A single family home on block 15700 of Deer Crest, San Antonio, where Pettit’s brother, Charles Joseph Pettit, was found dead in July. Police believe he committed suicide. The property was appraised at $386,000.

• A small apartment building at 488 Olmos Drive in Olmos Park valued at approximately $800,000.

• A lakefront home in Canyon Lake valued at $865,000.

• A $720,000 beachfront condo in Port Aransas.

However, not all transactions can be reversed. Sin Reposo then sold two residential properties — one on Contour Drive and the other on Alameda Drive in Olmos Park — for a total of $4.3 million.

On ExpressNews.com:

Did Former San Antonio Attorney Chris Pettit’s Legal Troubles Ruin The Sale Of A King William Home?

Sin Reposo also entered into an agreement to purchase the property at 555 Argyle Ave. overlooking the Olmos Dam in Alamo Heights for approximately $2 million. This Agreement is terminated as part of the Settlement.

Sin Reposo valued the properties at $13 million, according to the settlement agreement.

About SinReposo

Its sole manager and member is Garrett Glass, a San Antonio developer who served as Chief Financial Officer of EF EnergyFunders Inc., an oil and gas investment company based in Calgary but with board offices in San Antonio. He was appointed to the post in March.

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Pettit served on the board of EnergyFunders but resigned in May after it was revealed he had been sued by customers. Pettit and Glass met in January, Glass testified Wednesday.

“Sin Reposo is very sensitive to the harm caused by Mr. Pettit’s actions and is deeply disappointed that anyone in our community has been implicated in such alleged transgressions,” said Christopher Adams, a company attorney, in an e-mail. Mail of September 7th. “Sin Reposo was not involved in any of these alleged transgressions and believes she too was misled by Mr. Pettit.”

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Adams could not be reached immediately on Friday.

Sin Reposo denied any liability to the bankruptcy estates. It believes it only bought two of the properties — 488 Olmos Drive and the Contour Drive property — and that the other transactions were not “actual sales” because Pettit and affiliates had the option to buy them back.

It also believes the transactions were made at arm’s length and Pettit and his companies received “substantially more value for the properties than the consideration they remitted to Sin Reposo,” according to the settlement.

Sin Reposo has secured debt of approximately $740,000, which is the purchase price and expenses for all nine properties less proceeds received from the two properties sold and a $275,000 “litigation settlement”.

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