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Complaint filed in Sturgill bankruptcy A federal bankruptcy trustee has filed a complaint alleging that the owner of a former Wayne County houseboat company fraudulently hid the ownership of a helicopter and other assets from creditors. A story published last week in the Lexington Herald-Leader noted that the complaint has been filed against John R. Sturgill, who owned Fantasy Custom Yachts, by Richard F. Clippard, federal bankruptcy trustee for the Kentucky-Tennessee region. The complaint also alleges that Sturgill funneled income to his wife that should have been his. The complaint seeks to bar Sturgill from having his debts wiped away under his Chapter 7 bankruptcy request. According to his bankruptcy petition, Sturgill owes creditors nearly $2.2 million. That includes a number of local businesses who were owed money by Sturgill. Sturgill listed assets of only $21,901, when he filed for personal bankruptcy in April 2004. Twenty-thousand dollars of that was in a 401K account. The motion is a civil enforcement action, and a hearing has been scheduled for June 23 in London, according to the article. According to the complaint, Sturgill also owned a company called Sturgill Management that provided sales and other services to Fantasy, his houseboat company. Before Fantasy shut down, Sturgill bought a helicopter to be owned by the management company. The article noted that Sturgill sold the management company a few months before filing bankruptcy. It was purchased by a friend for $9,600. The friend later sold the management company back to Sturgillıs wife, Sally, for $12,692. The complaint alleges that the management company had a net worth of $180,000, including equity in the helicopter and a $100,000 certificate of deposit, at the time it was sold back to Sally Sturgill. The federal complaint also alleged that John Sturgill kept control of the helicopter and the management company throughout the time it was owned by his friend and transferred more than $150,000 from his houseboat company to the management company after the sale. The complaint also states that Sturgill diverted money that should have been his to his wife. For instance, the month before Fantasy closed, Sturgill sold a boat to a friend for $443,520. A month later the boat was sold for $650,000 and the friend gave Sturgillıs wife $132,000. ³This money should have been John Sturgillıs, but he used a third party to take the money out of the hands of the creditors of his failing business, and safely into his wifeıs hands,² the complaint states. The complaint states that after Fantasy Custom Yachts closed, Sally Sturgill and a partner invested $500,000 each to form a houseboat manufacturing company called Botewerks LLC. It opened for business in January 2004, doing business as Fantasy Yachts, in one of the buildings where Fantasy Custom Yachts had operated. The complaint states that John Sturgill deflected income to his wife after Botewerks was formed. It contends that Sturgill continues to run day-to-day operations of the company without pay, while Sally Sturgill draws a large ownership salary. Sturgill told the Lexington Herald-Leader that he did not engage in any fraudulent transactions, and that the civil complaint is based on false information from disgruntled former employees or a part-owner with whom he had a falling out. Sturgill said that Fantasy Custom Yachts had done well for several years, but suffered an economic downturn following the September 11, 2001 terrorist attacks. Add a comment |
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