The bankrupt tax preparer accused of looting the retirement accounts of retirees and widows will not get a fresh start.
More than $12 million in debt will stick to Soddy-Daisy businessman Jack E. Brown forever, according to a motion signed by U.S. Bankruptcy Court Judge John Cook. Either Brown or his estate must pay back every cent.
However, he isn't likely to do that anytime soon. Brown has reported assets of about $1.4 million with which to pay back more than $12 million owed to a growing number of creditors.
Cook signed Thursday's order denying a financial fresh start to Brown after an intervention in the case by Nicholas Foster, an attorney for the U.S. Trustee.
In most cases, individual debtors are typically granted a clean slate and their debts are washed away, enabling them to start a new life without owing money to anyone. That's often the point of seeking bankruptcy protection in the first place.
But Brown, who was brought into bankruptcy court involuntarily, was called to task by trustee Jerry Farinash for refusing to answer questions. That's an act that could run afoul of bankruptcy rules, according to U.S Bankruptcy code.
"This is supposed to be a transparent process, in which you're expected to tell them whatever they want to know about their financial situation," said Harry Miller, an associate at the Law Office of W. Thomas Bible Jr., who was commenting on the law.
Brown's attorney has noted that his client likely will "exercise his Fifth Amendment rights against self-incrimination."
Though Thursday's motion didn't specifically say why Brown chose not to contest the judge's ruling, his doctor has claimed in court that Brown is very ill and his health continues to deteriorate.
"He is not progressing with his treatments, and may indeed have arrived at his plateau of care," wrote Joe Watlington, a medical doctor at Nephrology Associates, in a letter to the court.
A meeting of creditors is scheduled at 9 a.m. Jan. 8. in the basement of the U.S. Bankruptcy Court, Eastern District of Tennessee. It is unclear whether Brown will attend in person or will communicate from his Hixson nursing home.