Jacksonville Bankruptcy Lawyer Blog

The Las Vegas Mobster Museum is headed to court, but not for racketeering. The museum that houses the world’s largest collection of organized crime artifacts (other than the FBI evidence room), has found itself faced with a Chapter 11 bankruptcy filing citing $5.8 million dollars in debt.

This museum’s debt is proportionally greater than the amount Capone owed to the IRS. When Capone was arrested in 1931 he owed $215,000 to the IRS. According to WestEgg.com this is the equivalent of about $3 million dollars today (after adjusting for inflation) and lead to Capone being given an eleven year prison sentence.

The Mobster Museum will be purchased for $2 million by JVLV Holdings LLC. The former developer, Jay Bloom, is faced with accusations stemming from overstated potential daily visitors and using corporate money to pay for personal automobiles, credit card bills and groceries. Depending on Mr. Blooms testimony, these transactions may be a violation of the bankruptcy code under 18 U.S.C. § 152. which protects against fraud in bankruptcy cases. Even if so, the maximum imprisonment under this statute is only five years, which is quite light when compared to Capone’s eleven. I guess this tells us something we already knew- that it’s bad to lie in bankruptcy court, but it’s far worse to lie to the IRS.

The filing fees for the Jacksonville District Court increased November 1st. The fees for filing are as follows:

Unfortunately, everyone is hard pressed for money these days. This includes the government, which appears to have lead to this cost increase. It does make one wonder if the people who are bankrupt are the ones who should be paying extra when they really are the ones who have the least.

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As you may be aware, the L.A. Dogers filed for Chapter 11 bankruptcy protection in late June of this year. Chapter 11 is a reorganization bankruptcy available to both individuals and businesses where the creditors get to vote on whether or not to approve your proposed repayment plan.

Although McCourt is the owner of the Dodgers, it is the business, the “Los Angeles Dodger” that is filing the bankruptcy. McCourt withdrew an alleged $189.16 million dollars from the businesses funds according to the Los Angeles Times to settle his divorce with Jamie McCourt. To read more about the divorce side of things, see the Jacksonville divorce blog. Taking money from your own business probably wouldn’t be an issue if that business weren’t already insolvent.

In theory, Mr. McCourt has diverted money that could have gone to pay the business’ creditors to his now ex-wife. These transactions could be violations of the bankruptcy code. Things have gotten so contentious that Major League Baseball has petitioned the court to order the sale of the Dodgers. It is difficult to say what will happen in this case as new facts and arguments are coming every day, but the moral of the story is that you don’t drain the assets of an insolvent business and then try to file that business in a bankruptcy.