Pettit’s Bankruptcy Trustee Wants to Sell SA-Area Mansion – San Antonio Express-News | Vette Leader

The Chapter 11 trustee in Christopher “Chris” Pettit’s bankruptcy begins winding up the disgraced ex-San Antonio law empire.

Trustee Eric Terry filed a motion late Friday to seek court approval to hire real estate agents to sell the mansion at 555 Argyle Ave. for sale in Alamo Heights overlooking the Olmos Dam. It is one of the most famous houses in the area.

The property is one of the most valuable assets in the consolidated bankruptcy cases of Pettit and his now-defunct law firm. They filed for Chapter 11 protection on June 1 after about a dozen lawsuits were filed alleging they had stolen millions of dollars from customers. They reported assets of $40.5 million and liabilities of $115.2 million.

Pettit valued the Argyle property at $3.6 million when it filed for bankruptcy, with Wells Fargo Home Mortgage owing about $2 million.

Pettit doesn’t live there. He has leased the mansion to former Spurs player and current team boss Brent Barry for $11,000 a month. Terry wants to hire agent Fred Hutt from Compass RE Texas Inc. and Corie Properties Group to sell the property.

Pettit has claimed a house on Champions Run in a gated community in Stone Oak as his primary residence. He appraised this property at $1.8 million.

It is almost certain that creditors will object to a demand that the Champions Run ground be exempt from the bankruptcy estate and out of reach of creditors. Objections would have to be raised within 30 days of the conclusion of the creditors’ meeting. The meeting will continue on Friday, but it is not known if it will end on that day.

The bankruptcy statute states that if a debtor engages in “fraud, deceit or manipulation in a fiduciary capacity,” the debtor’s homestead indemnification is capped at approximately $190,000 — allowing for inflation.

Christopher “Chris” Pettit filed for bankruptcy protection in June with assets of $40.5 million and debts of $112.2 million.

Jerry Lara, San Antonio Express-News / Staff Photographer

It is likely that the Chapter 11 trustee will apply for court approval to sell the Champions Run home.

Terry was in Florida on Monday to inspect a mansion where Pettit lived immediately before and after he filed for bankruptcy. In an amended filing last month, Pettit claimed that the Golden Oak mansion, which is part of Disney World, is owned by a company linked to a trust set up for the benefit of his 10-year-old son.

However, in the June 1 bankruptcy filing, Pettit claimed the Golden Oak mansion as his own. He valued it at $6.4 million but had put it up for sale for more than $8 million prior to the bankruptcy.

An attorney for the trust told US Bankruptcy Chief Craig Gargotta last week that they are working toward a sale of the mansion and a New Orleans apartment building that the trust also owns.

wedding ring

At a hearing Monday, Gargotta said he was told Pettit wore a wedding ring in court last week.

That prompted the judge to wonder whether, if Pettit is married, he is required to declare his spouse’s income in the bankruptcy plans.

Gargotta didn’t elaborate. It could not immediately be determined whether Pettit is married.

The judge also granted the trustee’s motion to have numerous financial institutions with which Pettit or his firm did business turn over financial records and funds in bank, brokerage and investment accounts. About 149 accounts were identified.

“We’re not getting as much support from the banks as we need,” said Patrick Huffstickler, an attorney for Chapter 11’s trustee, in arguing for the motion.

Leslie Luttrell, an attorney for some of the creditors, joined the trustee in asking the judge to grant the motion. She shared how she couldn’t get certain documents from Wells Fargo Bank.

Pettit maintained an escrow account with the bank in New Mexico to hold funds for the benefit of clients, but evidence presented last week showed Pettit wrote numerous checks from the account to himself.

Gargotta said it is critical for the trustee to receive the financial records given Pettit’s expenses. In the 50 days after filing for bankruptcy, he spent about $260,000.

“Mr. Pettit, notwithstanding the relatively recent nature of these transactions in amounts I suspect I shall never make in my lifetime…could not recall a single one,” the judge said. “Either he did not know or he didn’t remember. So the demonstrated need for this application is more than met.”

Pettit practiced law for more than 30 years before retiring from the bar and closing his law practice. He specialized in estate planning and personal injury cases, but also provided financial advice, prepared taxes and acted as trustee for trusts.

pdanner@express-news.net

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