Cleveland, Tenn., millionaire Toby McKenzie must wait a while to learn whether a federal judge will void a bankruptcy trustee's $2,500 sale for his stake in a $7 million piece of property to his former business partner Nelson Bowers II.
On Tuesday, U.S. District Bankruptcy Judge Shelley Rucker took under advisement that decision to sell in the complicated case that unfolded in nearly four hours of testimony.
Mr. McKenzie, 57, a pioneer of the payday loan business, was ill in 2007 and 2008 and was unable to handle his business, leading to a bankruptcy filing in 2008.
Now recovered, Mr. McKenzie and his attorney Richard Banks contend that the property, 15 acres off exit 20 along Interstate 75, is worth more than $7 million because the Tennessee Department of Transportation plans an interchange there.
"We think there was a mistake in what the trustee was relying on as to the value of the property," Mr. Banks told the court Tuesday. "It's a mistake for which the debtor's estate suffers, and Mr. McKenzie is prepared to pay $2,500 for it, so it will not be stolen from him by Mr. Bowers."
The case also is complicated because Mr. McKenzie's former attorney, real-estate law expert John Anderson, now is representing Mr. Bowers.
"Mr. Anderson, Mr. McKenzie's attorney for years, signed this (sale) order, and he was representing Mr. Bowers at the time. That doesn't smell right, your honor," Mr. Banks said.
Both Mr. Bowers and Mr. Anderson were subpoenaed, but neither appeared in court. Neither man returned calls Tuesday afternoon seeking comment.
John Konvalinka, with Grant, Konvalinka and Harrison, the firm with which Mr. Anderson is associated, sought and was granted a "special appearance" in Tuesday's hearing.
While insisting he was not the attorney of record for either man, Mr. Konvalinka argued to the court that the sale was valid. He said the company was "an empty company, worth nothing."
Mr. Banks asked for a delay of the hearing until Mr. Bowers and Mr. Anderson could come to court and testify. Judge Rucker denied the motion.
After the hearing, Mr. McKenzie's wife, Rebecca, said things have been tight for the family in the nearly two years since the bankruptcy case was filed.
"I just hope he has a chance to rebuild," she said her self-made-millionaire husband. "I feel like Toby has always been fair and good to people, and that's all he wants in return."
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