Garland Charity Definitely Fighting Its Creditors

Well, it has yet to be firmly established that the People Against Drugs Affordable Housing charity has actually fought drugs. But it’s definitely fighting creditors, with a Sept. 17 voluntary Chapter 11 bankruptcy reorganization filing. Now comes the State Attorney Generalissimo, who might ask the court to appoint a bankruptcy trustee.  Why, you ask? And why are you looking at a NASCAR truck? Jump for both answers…

OK, first to the trustee question: The state is worried that the charity’s operators might not keep its anti-drug, violence-free mission in mind when it’s settling its debts, said Texas Attorney General spokesman Tom Kelley. Kelley told me today that the AG might ask the bankruptcy judge to appoint a trustee to oversee how the money is distributed in bankruptcy. In his June 24 lawsuit, Texas AG Greg Abbott alleged that those involved in the charity spent $1.2 million of People Against Drug’s money on auto parts alone for a NASCAR race team in 2005 (one of the vehicles is shown above — that’s why I posted the pic here). So, it makes sense that Abbott would want to bird-dog where the money is distributed in a Chapter 11 reorg. In the boilerplate bankruptcy filing form, the charity’s Chief Financial Officer, John H. Shute, claims that there are between 100 and 199 creditors  who are owed between $10 million and $50 million. People Against Drugs, meanwhile, claims $10 million to $50 million in assets. Among the charity’s top creditors: the Dallas-based law firm Sessions Lambert Selwyn LLP (which claims it is owed more than $52,800) and the Munsch Hardt Kopf & Harr PC law firm, which claims to be owed about $48,000).  Finishing third and fourth in the creditors derby is Bank of America Platinum Visa ($47,984) and the Dallas law firm Strasburger & Price ($40,448). Not sure how these bills might have been racked up fighting the scourge of drugs, but one never knows.

One interesting question that might come up in procedings is why People Against Drugs needs to file for Chapter 11 in the first place. After all, according to the AG’s office, the charity sold its NASCAR race team, which didn’t appear to be making much if any money for People Against Drugs, but it kept its money-making apartment complex in Garland. Guess we’ll find out in subsequent court filings and hearings. The charity was founded by Gene Christensen, who ran against Ralph Hall for Congress last year.