Carol Clark lost her job as president of the bank in Braselton, Georgia, after it was auctioned off when actress Kim Basinger went bankrupt.
Tom Brown, 76, was fired five years ago when Ms Basinger, in an explosion of publicity, “bought” tiny Braselton, including the hardware store where he worked. Now he fears losing his rented home as she and her investment partner prepare to sell parts of the city, about 80 miles northeast of Atlanta, which they bought with big plans. development in mind. A neighbor, Terry Kitchens, is worried about the same. “If they say, ‘Move out,’ I have 30 days to load,” Kitchens said.
Meanwhile, in California, Golden State Landscape Irrigation and Maintenance owner Mark Booth is still waiting to raise $ 8,100 for gardening work at Ms. Basinger’s in the Woodland Hills section of Los Angeles.
These are some of the not-so-glamorous people caught in a multi-million dollar bankruptcy battle between the super glamorous Ms. Basinger, “Batman” star and wife of actor Alec Baldwin, and Main Line Pictures. Inc.
The Basinger case is not a typical bankruptcy. But in its extremes, it highlights some of the ironies of the bankruptcy system, which has been inundated with cases in recent years as the stigma of the “fall” has diminished.
For openers, the case is where the “bankrupt” manages to continue living a life of luxury while creditors are forced to wait patiently to collect a fraction, if any, of what is owed to them. For Ms. Basinger, that means living in three houses on both coasts and spending $ 31,000 a month on clothes, pets and an ex-husband.
The case is also notable for the way the bankruptcy court shield can be used like a sword. Some companies involved in labor disputes have invoked the shield to cancel union contracts. In Ms Basinger’s case, bankruptcy protection allowed her to appeal a grand jury verdict in the Main Line dispute without having to post an expensive, perhaps unobtainable, bond of 12 million dollars guaranteeing payment if she loses, as required by state law.
This has left small creditors such as Mr Booth in limbo as Ms Basinger and Main Line slowly move towards a final decision on whether she was legally bound to appear in the 1993 film “Boxing Helena. “and hurt Main Line when she bowed out.
For Mr. Brown, Mr. Kitchens and others in Braselton, a city with a difficult history, bankruptcy was a rude awakening from a Hollywood dream. Instead of becoming a tourist attraction closely linked to Ms Basinger’s name, Braselton is now just another asset in its bankruptcy – and an uncertain future.
As the case drags on and lawyers’ bills pile up (litigants have already spent over $ 3 million suing the courts), those holding the bag can only guess what. ‘they can get.
Creditors desperate for their money have been known to go bankrupt themselves – but not in this case, said John Reitman, counsel for the trustee handling Ms Basinger’s case. But, he said, small creditors can’t afford to force faster action.
Most creditors fall into this category, said Charles Normandin, who teaches bankruptcy law at Harvard Law School. Little guys in bankruptcy may end up getting only 10 to 15 cents for every dollar owed to them, he said, but all they can do is wait. “If I had a client who would come into my office and say, ‘I have $ 20,000 in an unsecured debt,’ I would say, ‘File a proof of claim in bankruptcy court and forget about it.’ did he declare.
Unsecured creditors are a phone call away in a personal bankruptcy case. And these lines have multiplied since the 1978 rewrite of the country’s bankruptcy law, which has generally allowed financially overwhelmed people to get rid of most or all of their debts.
Nearly 4.4 million corporate and personal bankruptcy claims were filed in the 1980s, more than double the number filed in the 1970s, according to the U.S. Courts Administrative Office. Slightly more than that record high number have already been deposited this decade, although deposits have declined slightly since the peak in 1992 as the economy improved.
Bankruptcies filed by individuals have changed less, said Normandin. But flashy cases like Ms. Basinger’s can annoy those who see so much money pouring through the courts while creditors wait years to collect a few thousand dollars.
The trouble for Ms. Basinger’s creditors began in May 1993, when a jury in Los Angeles decided that Ms. Basinger had indeed agreed to star in “Boxing Helena”, a movie about a doctor who cut off her arms and legs. of her lover, then disowned. JTC Sherilyn Fenn got the vacant role and “Boxing Helena” opened to good reviews but a weak box office.
Main Line took home a prize of $ 8.1 million. To appeal, a $ 12 million bond was required, to account for interest and expenses that might accumulate as the case continued. To get the bond, Ms Basinger would have had to pledge $ 12 million in assets and pay maybe $ 1 million or more. Five days after the verdict, Ms. Basinger instead filed for bankruptcy in Los Angeles. She claimed about $ 5 million in assets and $ 11 million in liabilities, including the Main Line Prize. (Ms. Basinger did not respond to interview requests for this article.)
Last September, the California Court of Appeals overturned Main Line’s victory because of the wording of the jury’s decision. The court said it couldn’t say whether the jury wanted the actress or her own professional services company to pay. If his company is responsible, its assets and income could be out of Main Line’s reach. A new trial, and then further appeals, will likely take years unless the parties come to an agreement.
As the cogs of justice creak and whine, Ms Basinger’s small creditors – those who organized her travel plans or fixed her house – are not being paid. And the people of Braselton, 450, are learning that getting too involved with an actress can be dangerous.
“If I move I will have to move, I think,” said Mr Brown, who came to Braselton 52 years ago to pick cotton for the Braselton clan who owned most of the town. The Braseltons sold 1,691 acres to Ms. Basinger and her backers in 1989. Mr. Brown now rents his unpainted three-bedroom house from Braselton / Basinger Limited Partnership for $ 60 per month, but suspects that she will be demolished when the property is sold to a new owner. He doesn’t know where he will live then.
Ms. Basinger’s lifestyle is in stark contrast to that of those affected in Braselton, Los Angeles and elsewhere by her bankruptcy and failure as a developer.
The bankruptcy documents refer to his Woodland Hills home, valued at $ 600,000, as well as the Manhattan apartment and home in Amagansett, NY, owned by Mr. Baldwin. Its properties are not part of the case.
A July 1993 file describes Ms. Basinger’s expenses, which then amounted to $ 43,000 per month. The actress spent $ 6,100 per month on clothes and $ 4,000 on “hobbies, clubs and entertainment, newspapers, magazines, etc.” Another $ 7,000 went to “pet care and other personal expenses”. Her ex-husband, Ron Britton, received $ 9,000 in child support.
A subsequent filing trumpeted that Ms. Basinger had reduced her monthly expenses to $ 31,000, even though her “lifestyle was never extravagant or lavish.” In one filing, however, she stated $ 592,000 in furniture and clothing and $ 192,000 in jewelry.
Main Line argued that Ms Basinger was not entitled to Chapter 11 bankruptcy reorganization protection because she could pay all of her debts in full – if not from current assets, then through income. future.
Ms Basinger, now 41 and starring in the brand new ‘Ready to Wear’, retorted that her years of high earning are behind her.
Paying Main Line’s claim plus her other debts, with interest, would have been impossible even if she had paid back all of her after-tax income for the rest of her life, they said. Instead, his Chapter 11 reimbursement proposal would have combined the sale of certain assets with future profits.
Last January, with the bankruptcy court seemingly unfriendly to her reorganization efforts, Ms Basinger converted her bankruptcy into a Chapter 7 liquidation.
This meant that most of its assets – including its stake in Braselton – would have to be sold. Under Chapter 7, Ms. Basinger could keep around $ 75,000 of her jewelry, furniture and clothing, an IRA of over $ 300,000 and $ 50,000 of her home equity, but maybe not much. else. No future profit, however, would be tossed into the pot under Chapter 7.
The September Court of Appeal decision leaves everything in chaos. With the Main Line judgment overturned, Ms Basinger could win a new trial and have nothing to pay the film company, said one of her attorneys, Leslie A. Cohen. In this situation, the bankruptcy case might even be dismissed if its assets again exceeded its debts.
The people of Braselton seem weary of talking about the actress and her financial crisis. Newspapers and TV shows from as far away as Australia covered his “buy” of the city.
Residents of Braselton were excited when Ms Basinger announced she was buying their town. There was talk of restoring the shops and houses from the turn of the century, making Braselton a historic theme park, installing a film studio in the old bank and haberdashery.
Instead, not much of note happened other than the dismantling of some rickety buildings.