The Law Office of Thomas H. Casey

Bankruptcy Law

Trustee Cases

Thomas H. Casey was appointed in 1993 to the U.S. Trustee panel of bankruptcy trustees, Santa Ana Division, Central District of California. He has administered thousands of cases and has operated a wide variety of businesses since his appointment.

Thomas H. Casey has served as bankruptcy trustee in several notable cases including the following:

Mr. Casey was the Chapter 7 Trustee in the case of Farshid David Binesh and Mojgan Yousefi Binesh. In a published, precedent setting opinion dated December 8, 2015, the Bankruptcy Court ruled in favor of Trustee Mr. Casey and held that the debtors lost their right to any exemption in proceeds from the sale of their homestead when, more than six months after the sale, after allegedly using a portion of the sale proceeds to construct a new residence in a foreign country, and after the new residence was ready for occupancy, they had still not begun to occupy it as a home. In re Binesh, 542 B.R. 1 (C.D. CA 2015)

PPA Holdings, LLC and twenty-one (21) related entities (“PPA Holdings”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code on June 26, 2009. By Order entered April 6, 2010, Thomas H. Casey was appointed as Chapter 11 Trustee. As Trustee Thomas H. Casey managed and controlled forty apartment buildings in California and Arizona consisting of 1,513 apartment units plus a commercial headquarters in Long Beach, CA. He analyzed the feasibility of the filed, proposed Chapter 11 plan of reorganization and identified the properties that may have value for creditors. He moved to convert the case to Chapter 7 and was appointed Chapter 7 Trustee. Thomas H. Casey operated the properties, negotiated settlement agreements with certain holders of junior trust deeds and marketed and sold certain properties. In 2014, principals of the Debtors, Michael Stewart (“Stewart”) and John Packard (“Packard”) were charged by the U.S. Attorney’s Office on sixteen (16) counts of mail, bank and bankruptcy fraud. Packard pleaded guilty to one count of mail fraud. Packard was sentenced to two and a half (2 ½) years. Stewart proceeded to trial and was convicted of eleven (11) counts of mail fraud in 2015. Stewart was sentenced to fourteen (14) years and is currently serving that sentence. Stewart was ordered to pay 120 victims $9.2 million in restitution. Thomas H. Casey testified as a witness for the U.S. Attorney’s Office.

Thomas H. Casey was appointed as Trustee in the case of In re DFJ Italia, Ltd. in March, 2000. DFJ Italia, Ltd. was a ponzi scheme with losses totaling approximately $45 Million. In 2002, the Trustee commenced state court litigation against City National Bank, Wells Fargo Bank, and U.S. Bank (“Banks”) alleging that the Bank’s aided and abetted various representatives of DFJ Italia, Ltd. (“DFJ”) in looting millions of dollars from DFJ Italia, Ltd. The Superior Court granted the Bank’s demurrer to the Trustee’s Second Amended Complaint. Trustee Casey appealed and the judgment was reversed and remanded. See the published case of Thomas H. Casey v. U.S. Bank National Association, 127 Cal. App. 4th 1138 (Cal. Ct. Appeal, 4th Dist, 2005). Trustee Casey negotiated a settlement with Wells Fargo Bank for $750,000 and City National Bank for $1,650,000. Trustee Casey’s Complaint was amended and his trial against U.S. Bank National Association commenced on September 10, 2007. Closing arguments were heard on December 3, 2007. The jury found in favor of Trustee Casey and against U.S. Bank for the sum of $10,282,189 in compensatory damages, plus pre-judgment interest at the rate of seven percent (7%) per annum from March 20, 2000, through entry of the Judgment in the amount of $5,793,520.92, for a total award, including pre-judgment interest, of $16,075,709.92. On April 20, 2009, an all day mediation was conducted and Trustee Casey and U.S. Bank reached a settlement whereby U.S. Bank agreed to pay Trustee Casey the total sum of $8,000,000 with mutual releases. The settlement was approved on May 27, 2009 and the settlement funds were received by the estate on or about May 29, 2009. The published opinion of Thomas H. Casey v. U.S. Bank National Association, 127 Cal. App. 4th 1138 (Cal. Ct. Appeal, 4th Dist, 2005) is a leading case on aiding and abetting in the State of California. To pursue the recovery of all assets of the bankruptcy estate, Trustee Casey employed special counsel who commenced litigation in New York involving real property on Long Island, New York, recovered a judgment against a New York resident and collected on the judgment. Seven members of DFJ Italia, Ltd. were eventually convicted of various crimes for their roles in DFJ Italia, Ltd.

In June, 2012, Greater Properties, LLC filed a voluntary Chapter 11 bankruptcy petition. By Order entered July 30, 2012, the case was converted to one under Chapter 7 and Thomas H. Casey was appointed as trustee. Among the scheduled assets of the estate was a 12,138-square foot commercial building valued at $1.3 million. At the time of the conversion, the property was vacant and the Debtor was significantly behind on its mortgage payments. According to the Debtor’s schedules, the property was encumbered by four trust deeds in a total amount in excess of $1.8 million, well over its scheduled value. The Trustee immediately entered into negotiations with the first trust deed holder and was successful in negotiating a settlement which reduced the amount of the first trust deed and provided for a carve out for the estate in the amount of $215,000. The Trustee marketed the commercial property for sale and by Order entered January 28, 2013; the property was sold for the amount of $1,876,000. The Trustee is further seeking to avoid the third and fourth trust deeds as fraudulent and/or preferential. These avoidance actions are pending and if successful, the estate should receive a significant recovery from the sale over and above the carveout.

Thomas H. Casey was appointed Chapter 7 Trustee in the case of Michael Fischer in September of 2010. At the time of the bankruptcy filing, the Debtor scheduled an interest in his primary residence, a vacation home located in La Quinta, CA, a commercial property in La Quinta, CA, and six, multi unit, residential, rental properties in La Quinta, CA. The six rental properties had numerous health and safety violations and were in a substantial state of disrepair. The estate had no cash on hand to repair and maintain the rental properties and the Debtor had spent the tenant’s security deposits. The Debtor’s failure to maintain the properties required numerous emergency repairs. Mr. Casey obtained the necessary Bankruptcy Court orders authorizing Mr. Casey to repair, maintain and operate the real properties and to remedy the numerous health and safety violations. Mr. Casey marketed and sold three of the real properties. He also analyzed a large federal tax claim filed in the case and he greatly reduced the filed tax claim. All creditors were paid in full and two of the properties and some cash were eventually returned to the Debtor.

In March, 2008, In re ANF DEER CREEK, LLC, filed a voluntary Chapter 11 bankruptcy petition. Shortly thereafter, the case was converted from Chapter 11 to Chapter 7. At the time of the conversion, Mr. Casey was appointed as Trustee to this operating case. The primary asset was a 330 unit apartment complex located in Las Vegas, Nevada, consisting of eight (8) two-story buildings and two (2) three-story buildings ("Property"). The Property was in poor condition when Mr. Casey was appointed. Many necessary expenditures had not been made to repair the property. The secured lender was owed approximately $19.6 million and the Property was overencumbered. After long and difficult negotiations with the secured lender, a cash collateral carve-out agreement was successfully negotiated between the lender and Mr. Casey. During this time, Mr. Casey entered into a purchase agreement with a proposed buyer. After obtaining Court approval of the use of the secured lender’s cash collateral as well as a sale of the Property on an emergency basis, Mr. Casey operated the Property for approximately three months pending close of escrow. During that time, Mr. Casey encountered and resolved numerous health and safety violations. Mr. Casey commenced eviction proceedings for tenants who had been residing at the Property rent-free for months, convinced vendors to continue to supply services, and demanded and obtained an additional property manager. Mr. Casey continually worked with the property management company to improve their financial reporting to provide a more accurate picture of the financial condition of the Property. Despite the adverse circumstances, Mr. Casey successfully closed escrow on the Property for $19.1 million on July 2, 2008.

In July, 2006, Thomas H. Casey was appointed as Trustee to the case of In re WILLIAM T. HAYS, JR., a workers compensation attorney. The Debtor had scheduled as assets of the estate, his residence and his workers compensation law practice as well as certain accounts receivable. Mr. Casey reconstructed the Debtor’s finances by reviewing the Debtor’s case files, tax returns, business and banking information as well as other financial documents. Mr. Casey marketed and liquidated the Debtor’s residence and collected the receivables from the Debtor’s workers compensation law firm. Mr. Casey also filed a Complaint under 11 U.S.C. §727 against the Debtor for, among other things, failure to keep and preserve records from which the Debtor’s financial condition could be ascertained. After discovery and prior to trial, the Debtor stipulated to waive his bankruptcy discharge.

Thomas H. Casey was appointed as Trustee in the case of In re JAMES BERRY in April, 2006. Mr. Casey worked closely with the Federal Trade Commission ("FTC"), allowing for a successful sale of the Debtor’s residence for $2.3 million and the sale of the Debtor’s 2000 Porsche Carrera, which had been seized by the FTC. Mr. Casey obtained a turnover order of the residence authorizing the use of the U.S. Marshals against Mr. Berry due to his conduct and vandalism of the residence. Mr. Casey filed a Complaint to Deny Discharge Pursuant to 11 U.S.C. §727(a)(2)(B), §727(a)(3), §727(a)(4), §727(a)(5), and §727(a)(7), against the Debtor and was successful in obtaining a judgment against the Debtor denying the Debtor his discharge.

Thomas H. Casey was appointed as Trustee in the case of In re Ruth Davis Moran in August, 2001. The Debtor in this case was an elderly woman who was suffering from dementia. The Debtor had resided in Maryville, Tennessee but, shortly before the filing of her bankruptcy case, a relative relocated the Debtor to an assisted living facility in California. At the time of Mr. Casey’s appointment, he was faced with issues which needed to be addressed on an expedited basis, including the payment of the Debtor’s assisted living facility, probate issues pending in the Tennessee probate court, the Debtor’s Tennessee residence, and the Debtor’s own family members, who were engaged in bitter litigation over control of the Debtor’s medical care and assets. Mr. Casey secured, marketed and sold the Debtor’s Tennessee residence, plus personal property located in Tennessee. Mr. Casey paid all allowed claims of the bankruptcy estate in full, successfully moved the Orange Probate Court for the appointment of a professional conservator to care for the Debtor, and paid the surplus funds of the bankruptcy estate to the conservator.

Thomas H. Casey was appointed trustee of Voxel, Inc. in August 1998. The only asset of Voxel, Inc. was medical holographic imaging intellectual property which was featured in an October, 1998 issue of Life Magazine as one of the medical miracles of the 21st Century. At the time of his trustee appointment, the business operations of Voxel had ceased, all employees had been terminated, and the Voxel bank accounts held approximately $30,000. Mr. Casey obtained post-petition financing to restart business operations, rehired key employees and eventually sold the assets of Voxel, Inc. for $3.1 Million. He also obtained a $1.5 Million settlement from Defendant Wireless.NetCom. Mr. Casey made a distribution to unsecured creditors of over 60%.

Thomas H. Casey was appointed bankruptcy trustee of the Valley Business Center and La Palma East Partnership in August, 1997. At the time of Mr. Casey’s trustee appointment, one of the partners of the Valley Business Center and La Palma East Partnership, individual James Hood, was serving a sentence in a San Diego penitentiary for murder. While the filed bankruptcy pleadings indicated the real property assets of the Valley Business Center and La Palma East Partnership were over encumbered and had no value for the estate. Mr. Casey sold the two retail shopping centers for the total amount of $5 Million and paid all creditors in full.