Casper Businessman Sonny Pilcher Probably Loses Bankruptcy Protection
Casper businessman Sonny Pilcher unofficially will be responsible for approximately $6 million in debts to creditors after a Wyoming U.S. Bankruptcy Court judge ruled in favor of a creditor who sued him.
Judge Cathleen Parker ruled Pilcher, who filed for bankruptcy protection in 2015 and was sued himself in bankruptcy court by Casper creditor Monty Elliott, did not disclose assets and lied under oath.
That resulted in what is known in bankruptcy lingo as a "death sentence" for a debtor, meaning Pilcher's debts are not discharged and creditors can sue him to recover their damages.
“The bankruptcy court system function depends on the honesty of debtors at all stages of the bankruptcy process," Parker said in an oral ruling on April 11.
"The debtor failed to fulfill his duties to be honest, forthcoming, and fully disclose his assets and transfers with the court, the trustee, and his creditors," she said. "Debtor's false statements and omissions under oath constitute a basis for a denial of discharge...."
However, bankruptcy trustee Randy Royal said Parker's ruling is not official until it is entered in writing in the court record. (The trustee is in charge of tallying the debtor's property, selling the estate, distributing the proceeds, and other duties.)
Royal said the written ruling is usually done within a few of weeks after the oral ruling. After that, Pilcher has a couple weeks to decide whether he wants to challenge or appeal the ruling, he said.
The ruling is under a section of bankruptcy law that applies to all debts to all creditors, not just what Pilcher owes Elliott, Royal said.
Pilcher has an unlisted phone number and could not be reached for comment.
Pilcher filed for chapter 7 bankruptcy protection -- liquidation of assets to pay creditors -- in July 2015 while he was serving a one year sentence in federal prison in Colorado for tax fraud.
He was the owner of numerous businesses including a construction firm, bars, and most recently the Racks nightclub west of Casper. Racks is now owned by two of his relatives.
Pilcher initially listed about $5.2 million he owed to mostly local creditors, many of whom are construction subcontractors. In January 2016, after he was released from prison, he filed paperwork identifying another $730,000 in debts, bringing the total to about $5.9 million.
However, Elliott and others filed lawsuits two years ago claiming Pilcher failed to list thousands of dollars worth of business interests, financial transactions and assets. Because of those omissions, Elliott and others wanted the bankruptcy court to dismiss the bankruptcy petition.
In his motion for a partial summary judgment -- a legal action that states there are no matters of fact or law to keep the lawsuit going -- against Pilcher, Elliott through his attorney Stephen Winship of Casper said there were no issues about Pilcher's dubious financial affairs and the court should not allow Pilcher's debts to be discharged.
Pilcher responded with his own motions for partial summary judgment, and provided explanations for what Winship characterized as undisclosed assets.
But Judge Parker agreed with Elliott and Winship, saying Pilcher had ample opportunity to provide evidence to counter Elliott's arguments.
Parker noted numerous instances of property and asset transfers that occurred prior to bankruptcy and after the debtor obtained his judgement.
"The debtor is a business owner with enough sophistication to understand the demands of being a debtor," she said. "The omissions were found in the discovery process not by the debtor’s willingness to reveal them. This forces the court to conclude the debtor acted with wrongful intent, knowingly and fraudulently. This provides a basis for a finding of intent to deceive.”
Because of these and other issues, Parker said, "it is ordered that the plaintiff’s motion for partial summary judgment is granted.”