A U.S. bankruptcy judge on Wednesday validated the sale of businessman Toby McKenzie's interest in 15 acres in Bradley County to former business partner Nelson Bowers II.
McKenzie and his attorney, Richard Banks, contended in May that the property off exit 20 on Interstate 75 is worth more than $7 million. McKenzie wanted to void the sale because of a mistake in the property valuation, Banks told U.S. District Bankruptcy Judge Shelley Rucker in May.
"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 in May.
McKenzie signed over his share of the alleged $7 million property in October 2009 for $2,500, Wednesday's order from Rucker states.
Banks said Thursday that he wasn't disappointed with the decision because the sale was validated by another court prior to the dispute before Rucker. He said he now is looking to two lawsuits - one in Bradley County Chancery Court for $75 million and another in U.S. Bankruptcy Court for at least $45 million - regarding McKenzie signing off on 60 acres of property near the 15-acre site.
"The big war is the 60 acres. It's the high-dollar property," he said.
According to the Chancery Court suit, Bowers and lawyer John Anderson took advantage of an ailing McKenzie to obtain his signature transferring 60 acres of valuable property and a 50 percent interest in Tennessee Interstate Properties. A portion of the 60-acre property was used for the site of Toyota of Cleveland.
Attempts to reach Bowers and Anderson on Thursday were unsuccessful.
McKenzie and U.S. Bankruptcy Trustee C. Kenneth Still, who allegedly made a mistake in valuing the 15-acre property, have teamed together in the suits.
"Defendant Anderson and Grant, Konvalinka and Harrison (Anderson's law firm) along with defendant Bowers conspired to take from McKenzie valuable property by fraud," according to the lawsuit filed by Banks for McKenzie and Scott LeRoy, lawyer for the bankruptcy trustee.
The Bankruptcy Court suit called the 60-acre transfer "fraudulent and avoidable."
"The defendants Bowers, Anderson and GKH (Grant, Konvalinka & Harrison) had actual knowledge of the pending bankruptcy and their actions constituted a flagrant willful and deliberate violation of the order of this (Bankruptcy) Court," it states.
The suit claims McKenzie was admitted to Athens Community Hospital on Dec. 9, 2008, a couple of weeks after an involuntary Chapter 7 bankruptcy had been filed against him. He was found to have elevated ammonia in his bloodstream, which affected his cognitive and mental abilities, the suit states. Later that day, he left the hospital against doctors' advice and went home to stay in bed, according to the suit.
The next day, Bowers visited McKenzie and persuaded him to come for a drive, which led to McKenzie signing away the 60 acres, the suit states.
"McKenzie has no recollection of signing the deed in question," and later that evening again sought medical attention. He was found again to have a critically high level of ammonia in his blood, the suit states.
Online: Read the order from Judge Rucker. Read previous stories.