06/17/2011 4:37PM

Creditor asks court to put Stonewall Farm founders into involuntary Chapter 7 bankruptcy

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Audrey and Richard Haisfield’s largest single creditor has asked a Florida bankruptcy court to put the Stonewall Farm founders into involuntary Chapter 7 bankruptcy due to more than $7 million in alleged unpaid debts.

Stone Wall Acquisition, which has a $16 million judgment against the Haisfields in a Pennsylania debt-default case, previously sued the Haisfields in Florida, alleging that they have “played a systematic shell game” to shield their assets. In that filing last November in U.S. District Court in Ocala, SWA accused the Haisfields of “opening and closing multiple partnerships, limited liability companies, corporations, and trusts to hide their assets from creditors.” SWA said the couple has opened, closed, or transferred assets to more than 125 separate entities in the last four years and also have engaged in transactions with their children “which involve transfers of assets in exchange for, or in purported payment of, non-existent, undocumented, or otherwise suspect ‘loans.’ ”

“The Haisfields have used the corporate entities they controlled as personal cash cows, stripping them of their assets and converting them to cash for themselves, despite the fact the assets were pledged as securities and guarantees on multi-million-dollar loans,” SWA’s lawsuit alleges.

SWA and a group of smaller creditors most recently filed the involuntary Chapter 7 bankruptcy petition on May 26 in U.S. Bankruptcy Court in Jacksonville, Fla. If approved, that action could halt the earlier case against the Haisfields and could require them to liquidate their assets for debt repayment.

Victor Chapman, a Florida attorney representing the Haisfields in the November fraud suit, said his clients deny making fraudulent transfers to avoid paying creditors.

“We don’t think the lawsuit is well taken,” Chapman said. “Obviously, they have a judgment against Richard and Audrey, and the allegations that there were fraudulent transfers and so forth we are disputing. A lot of the allegations that were made in the complaint are, as we’ve taken the position in the case, just wrong.”

Among SWA’s allegations in the fraud suit were that the Haisfields created a pair of revocable trusts in order to protect assets from creditors. But Chapman said that those trusts are subject to claims.

“It is not an asset-shielding device, because a creditor of the beneficiaries can simply attach it under Florida law,” Chapman said.

In a September 2010 deposition, Richard Haisfield said he is living off of $2,400 or $2,500 in Social Security a month and money borrowed from his son Marc as his sole sources of income.

The Haisfields shuttered their Kentucky operation, Stonewall Farm, last year in the wake of three major bank lawsuits over alleged unpaid loans totaling more than $37 million. A number of Stonewall- or Haisfield-related entities have since filed for bankruptcy, including three in Florida and five in Kentucky.