Teresa and Joe in trouble with bankruptcy trustee

From DBKP about Joe and Teresa in hot water financially.

By LBG1
Fresh on the heels of Real Housewives of New Jersey’s Danielle Staub’s attorney claiming he’ll seek restraining orders against cast members Teresa Giudice and Jacqueline Laurita–which should make for a rather interesting filming of the second season reunion episode, with Danielle beamed in via satellite from her bulletproof bubble located in a separate studio–the Wall Street Journal reported Teresa Giudice and hubby Joe’s “fresh start” Chapter Seven bankruptcy has hit a major roadblock. Part of the roadblock, the rather bizarre Chapter Seven bankruptcy papers Joe and Teresa filed on October 29, 2009 where Joe and Teresa claimed they owed $11 million, $7 million unsecured, with Joe and Teresa’s annual income $79,000.

According to the WSJ, the court appointed trustee is planning to auction off Teresa and Joe’s personal belongings from their Towaco, N.J. mansion on August 22nd.

A hat tip is in order for I’m Just Sayin who discovered the Wall Street article and Teresa Giudice’s entry at the site Smoking Gun.

Wall Street Journal:

Court papers show that the Bravo reality TV star and her husband, who filed for bankruptcy protection last fall, are facing a lawsuit to prevent them from taking advantage of the debt discharge available to individuals under the Bankruptcy Code. According to Chapter 7 trustee John Sywilok, tasked with rounding up the couple’s assets and distributing the proceeds to creditors, the Giudices allegedly concealed key documents about their finances and business transactions.

According to the WSJ, Sywilok accuses Joe and Teresa of hiding interests in a pizza parlor, laundromat, Teresa’s TG Fabulicious Clothing and Accessories Line and Teresa’s cookbook, The Skinny Italian. Sywilok alleges Teresa and Joe made false statements, under oath, about their assets, income, and expenses.

The site Smoking Gun posted Sywilok’s court documents.

Smoking Gun has more info including:

A court-appointed trustee has accused the bankrupt star of “The Real Housewives of New Jersey” reality TV show of lying under oath about her financial condition, concealing documents, and failing to disclose her interest in several businesses. As such, Teresa Giudice (and her husband Giuseppe) should not have their case formally discharged, according to a U.S. Bankruptcy Court complaint filed by lawyer John Sywilok, who was appointed to oversee the Chapter 7 action.

According the court documents filed by the trustee, the documents were filed on are shortly after July 1, 2010.

-On October 29, 2009, Teresa and Joe (Giuseppe) Giuduce filed Chapter Seven Bankruptcy at a Federal Court.

-The Office of the United State Trustee appointed John W. Sywilok as trustee, on or around October 29.

-Sywilok’s deadline to file a complaint was originally January 29, 2010. The deadline was extended twice to July 1, 2010.

-The trustee stated Teresa and Joe had been involved in “certain litigation” prior to filing the bankruptcy petition, which according to the trustee, was the “impetus” for Teresa and Joe filing Chapter Seven.

-The trustee stated Joe and Teresa were owners or limited owners of property which were on the “eve of foreclosure”.

-The trustee noted Teresa was involved a reality show, Real Housewives of New Jersey, with an employment contract to appear on the show. Teresa received income from “appearances” and her book, Skinny Italian which was written prior to filing Chapter Seven bankruptcy.

-The trustee alleges Teresa and Joe concealed documents, records, and papers which their true financial condition or business transactions could be ascertained.

-Teresa and Joe made false oaths when filing the Chapter Seven petition which include but are not limited to income, expenses, and assets.

-Teresa and Joe failed to disclose their interest in real properties and businesses.

In short, the trustee asked the court to deny the discharge of Joe and Teresa’s Chapter 7 bankruptcy petition. Not a “fresh start” but a “starting over” for Joe and Teresa and their attempts to file bankruptcy.

Which leads back to the Chapter Seven bankruptcy petition filed by Teresa and Joe on October 29, 2009.
Court documents posted at the site Absurd to Sublime.

In the Chapter Seven petition Teresa and Joe stated they owed $2,582,376,83 in secured claims. An example of a secured claim is a note secured by a deed of trust or mortgage on real property

Teresa and Joe stated they owed an astounding $6,127,454.51 in unsecured claims.

Unsecured Claim
A claim or debt for which a creditor holds no special assurance of payment, unlike a mortgage or lien; a debt for which credit was extended based solely upon the creditor’s assessment of the debtor’s future ability to pay.

Teresa and Joe stated on the petition that their monthly income at the time when they filed the filed petition was $16,583.33 which included $3,250 a month in income for Joe, $3,333.33 paid to Teresa by Bravo, and $10,000 from “family members”. Included the petition Teresa and Joe’s monthly expenses, $16,582.00 which included a $12,362 house payment. According to Teresa and Joe’s monthly take home pay and expenses, Joe and Teresa were left with $1.33 after paying their expenses. Missing from the “take home pay”, any mention or income from Teresa’s appearances or income (advance book commission) from Teresa’s Skinny Italian cookbook. In businesses owned, no mention of a pizza parlor, laundromat, or Teresa’s clothing line.

On July 4th, the New York Post reported Joe’s former business partner alleges Joe engaged in forgery and that the IRS is currently investigating Joe’s business interests.

New York Post:

Joe Mastropole, who owned property with Joe Giudice, gave him a $586,000 loan secured by three East Orange, NJ, buildings. Giudice paid back only $300,000 with the balance due in December 2007.

But Giudice forged Mastropole’s name on a June 2007 document saying the mortgage was paid, Mastropole charges in a lawsuit. The witnesses to Mastropole’s supposed signature were two of Giudice’s employees, court papers say.

Mastropole won an Oct. 23, 2009, judgment in his case, which is now in dispute because the Giudices filed for bankruptcy just days later. They left a trail of debt, including money owed on mortgages and to department stores and a fertility clinic.

In the court documents the trustee stated Teresa and Joe had been involved in “certain litigation” prior to filing the bankruptcy petition, which according to the trustee, was the “impetus” for Teresa and Joe filing Chapter Seven. According to the New York Post, Teresa and Joe filed for bankruptcy six days after Matropole won his suit against Joe.

According to the WSJ, the trustee intends to auction off Teresa and Joe’s personal property on August 22nd. When you file for Chapter 7 there are personal items which you can claim as “exempt”, meaning the court will decide whether they can be auctioned them off to pay your creditors. Joe and Teresa claimed they had $24,150 in personal property including “dogs” worth $600.00. Joe’s Movado Watch worth $500, Teresa’s wedding rings worth $400 and costume jewelry the Giudice’s valued at $750.. Also included, go-carts, a lawn mower, kitchen table and chairs, tools, a swing set, clothing, televisions, den, living room, and bedroom furniture and computers. Three properties which the Giudice’s owned or had 50% ownership. In the court documents Joe and Teresa listed every single personal item including the go-carts as exempt except the three properties.

According to the WSJ, “up for grabs” at the auction:

Next month, the trustee is aiming to hold a public auction of the contents filling the family’s newly built Towaco, N.J. mansion.

Up for grabs at the Aug. 22 auction are home furnishings, accessories, tools and a boat.