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The Bankruptcy Case of Antoin Rezko

Posted on in Bankruptcy Attorney

Antoin “Tony” Rezko is a convicted power broker who is currently serving a ten-and-a-half year prison sentence for corruption and fraud in a federal prison in downstate Pekin, Illinois. Rezko was involved in a seven year long bankruptcy case in which he owed $58.8 million to creditors in claims. Rezko has only paid $1.1 million to his creditors, with a majority of the payments going to his trustee and the law firm that oversaw the case.

Rezko was the fundraiser and advisor for former Illinois Governor Rod Blagojevich, who was convicted and imprisoned for corruption. Rezko oversaw business holdings including Papa John's and Panda Express and was a co-owner of Rezmar, a real estate development company.

The biggest source of payment for Rezko's creditors is from a prior settlement with the Chicago law firm Freeborn & Peters. Gregg Szilagyi, Rezko's appointed trustee, sued Freeborn & Peters to recover money that Rezko arranged to have transferred to the law firm prior to filing for bankruptcy. The dispute was settled between the parties in 2012.

Rezko was convicted in 2008 and is due to be released from prison in May 2016. Because Rezko did not cooperate with the bankruptcy process, the judge never discharged him from his debts. This means that creditors have the right to pursue Rezko if:

They uncover any hidden assets
Rezko makes money after being released from prison
Rezko accumulates assets after being released from prison

What Types of Bankruptcy are Available for Individuals?

The U.S. Bankruptcy Code allows individuals to file bankruptcy under:

Chapter 7
Chapter 11, primarily used for corporations but may be used by individuals under certain circumstances
Chapter 13

Chapter 7 Bankruptcy Overview

Chapter 7 of the Bankruptcy Code is also known as liquidation, which is defined as “The sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.”

Under Chapter 7 an appointed trustee collects and sells the debtor's nonexempt assets. The proceeds of these assets are then used to pay creditors. The debtor's property may be subject to liens and mortgages that promise the property to other creditors. Certain property may be exempt, allowing the debtor to retain its ownership. It is important to remember that filing a petition under Chapter 7 of the Bankruptcy Code may result in loss of property.

Chapter 13 Bankruptcy Overview

Chapter 13 of the Bankruptcy Code allows an individual with regular income to adjust his or her debts. Under Chapter 13, a debtor is able to keep property. Chapter 13 allows debtors to propose a plan of repayment for their debts owed. The debtor is usually required to make payments installments for a time period of three to five years.

Are you considering bankruptcy?
If you are contemplating bankruptcy, it is important that you seek legal assistance to assess your financial situation. Here at Newland & Newland we have a team of highly skilled attorneys that possess the expertise needed to provide advice for resolving your financial difficulties. Contact us today to schedule a free phone consultation.

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