When bankruptcy lawyers advise you to make an honest and thorough appraisal of your assets when preparing to file for bankruptcy, they have a good reason—it could save your hide further down the road, as a Phoenix real-estate investor is learning.
Alexander Papakyriaou, known throughout the Valley as Alex Papas, used money from investors to purchase and develop over 100 shopping centers throughout the Southwest as a partner in Barness Papas Inc. At the peak of the real-estate market crisis in 2007, the company defaulted on several loans, leading to a number of creditors and investors filing suit against the partnership in 2009.
Papas and his wife filed for bankruptcy protection in late 2010, citing less than $1 million in assets. What the courts found, however, is that Papas masterfully transferred and hid millions in other assets—including multiple homes, cars, jewelry, and life insurance policies—using his family and self-created company Cobea.
This deception caused Judge Brenda Moody Whinery, a U.S. Bankruptcy Court judge, to do something uncommon—deny Papas’ bid for Chapter 7 liquidation bankruptcy. This leaves the door open for over 100 creditors and investors to continue trying to get payment on the near-$141 million in claims owed to them by Papas.
Moody Whinery found that Papas transferred assets only after his financial difficulties began, and is certain that there are other hidden assets that will be uncovered as the case against him continues. As these assets are found, they will be used to pay creditors.
The Phoenix Chapter 7 bankruptcy lawyers at Curry, Pearson & Wooten will continue to watch this case and inform you of any updates.