What a world this is, what a country. That’s today’s controversial opinion, based on local news articles and a national item. Those pieces from last week come to mind the morning after massive health-care legislation passed the U.S. House, where opposition spanned from principled and reasonable to name-calling.
Two Northwest Arkansas reporters last week reviewed the documentation filed with the Chapter 7 bankruptcy request of local developer John David Lindsey. Each hit different, telling aspects. The number of bank-owned parcels in the area might nearly double, and that’s not counting the dog.
Lindsey is, according to overall news reports, principal broker and general manager of Lindsey & Associates, a real estate investment and management company with more than 200 agents, founded in 1973 by his father, Jim Lindsey, and another man. John David Lindsey has financial interests in several other companies, including dirt excavation and transport services.
Lindsey claims “assets of about $9.99 million to offset the $169.6 million in liabilities listed,” according to reports.
Thirteen local banks are among the creditors of Mr. Lindsey, one article (subscription required) from last week said. “They want to take back 226 single-family homes, 410 lots, three multifamily complexes and 227 acres of land. There are several large commercial buildings. …
“The 226 single-family homes … will nearly double the amount of bank-owned property in the region, said Paul Bynum of Mountdata.com,” according to the article from Northwest Arkansas Newspapers.
The article continues with comment from Tom Reed of Streetsmart Data Services in Fayetteville: “In the fourth quarter, bank-owned homes in subdivisions where building is ongoing were priced 20 percent less than comparable homes on the [mulitple] listing service.”
The news hits home, in more ways than one.
While this piece examined the liability side of the ledger, the other article (subscription required) Saturday in the sister publication, Arkansas Democrat-Gazette Northwest Arkansas Edition, looked at the more personal assets of the personal bankruptcy filing.
It explains, “Chapter 7 bankruptcy allows for liquidation of assets to satisfy outstanding debts. Lindsey filed for individual bankruptcy but marked the debts as primarily business-related.” Lindsey “may be able to keep some of his assets after the bankruptcy is resolved. … The primary purpose of bankruptcy, according to the U.S. Courts bankruptcy Web site, is to discharge certain debts to give an honest individual debtor a ‘fresh start.’”
It may be invasive to repeat the article’s summary. It’s not just kind of like poking around someone’s house, snooping, even though it’s from public records. Rightfully so: Essentially everyone can be seen as responsible when a person or a company declares insolvency. We’re hit as taxpayers but also as customers of banks and other businesses. The interest we pay on loans subsidizes the other investments. The interest we receive in savings accounts can be reduced by the bank’s obligations elsewhere.
Besides his own house, the article also notes $18,060 in household goods, $1,450 in sporting equipment, a $24,740 GMC pickup and heck, it seemed advisable for him to list $300 in restaurant gift cards. The list also has $1,000 in clothing and a black Labrador retriever worth $7,500.
Even from a discount menswear shop, men’s business suits are a couple hundred each; a more casual Arkansas businessman surely owns a dress pair and a work pair of good boots. On the other hand, can we expect a waggy–tailed Lab in a bank lobby greeting loan applicants and a bank executive nearby with a scooper and bags? That’d be the vice president for asset management.
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In other financial news in the last week of winter, The Wall Street Journal reported, though with repeated cautions, that convicted investment schemer Bernard Madoff was beaten up in prison last December.
The Journal is meticulous in sourcing. Prison officials and Madoff’s lawyers either denied the beating or gave no-comments; the sources were other prisoners. That the Journal ran the report anyway shows its confidence in the cons.
Madoff, 71, was sentenced about a year ago to 150 years and is in the medium-security portion of a federal prison in North Carolina. In mid-December, the Journal reported on March 18, he was taken to its medical wing with a broken nose, fractured ribs and cuts to his head. His reps said he was being treated for blood pressure and heart problems. He’s been returned to his unit.
One former inmate “said he chatted with the admitted Ponzi schemer on Saturdays in the [prison] library and asked for financial advice: ‘He gave me ideas on my index funds.’
“Mr. Madoff advised him to diversify, saying he should invest in funds that track the S&P 500 index of stocks ‘where my money would be on all the stocks instead of putting my eggs into one basket.’ … ‘I was trying to get into day trading and he’s like, “That’s not for you. That’s for individuals like me with millions to spare.“‘”
Mr. 61727–054, whose health care is provided by Uncle Sam, will take your financial questions. Leave a message. The call will be returned. Collect.