Sunday, November 22, 2009

ONGOING COVERAGE: METROPOLITAN MORTGAGE BANKRUPTCY

Ex-Met officer has filed Chapter 7 papers

Thomas Masters living in Nevada

John Stucke
johnst@spokesman.com, (509) 459-5419
June 26, 2009

Thomas Masters, a former Metropolitan Mortgage and Securities Co. executive implicated in one of the fraudulent real estate schemes that unraveled the firm, has filed a $26 million personal bankruptcy and moved to Nevada to seek work.

Masters had five development projects under way, including three in the Tri-Cities and two in Spokane – one each in Hillyard and the Five Mile area. When investors withdrew financing for the projects, Masters decided to avoid the personal guarantees he made on developments by filing for bankruptcy, said his attorney, Dan O'Rourke.

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Court records state Masters has assets of about $385,000 compared to debts exceeding $26.4 million. Foreclosure sales of the development properties should satisfy at least some of the debts, O'Rourke said. The rest will be handled through the Chapter 7 filing.

Masters had fashioned himself as a whistleblower against Metropolitan as the company faltered. He ultimately settled a lawsuit brought against him by the U.S. Securities and Exchange Commission, surrendering $36,500 in profits and interest gained from one of the real estate deals deemed improper. He also paid a $25,000 fine.

Yet Masters also walked away from the company's protracted bankruptcy with $55,000 after settling a $2.4 million breach of contract claim stemming from his firing from the company years ago.