Alamo files for bankruptcy court protection to circumvent all creditors
Southwest Times Record
June 24, 1992
By Dave Hughes
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The idea that led evangelist Tony Alamo to file for bankruptcy Monday may have been hatched a week earlier in the chambers of a federal court judge.
Alamo’s attorney, Jeffrey Dickstein of Tulsa, said Tuesday U.S. District Judge Franklin Waters suggested bankruptcy court could be the forum for Dickstein to unite all Alamo’s creditors so he could organize a plan to pay them off. He said the discussion was held in Waters’ chambers June 15 during negotiations for a consent judgment in which Alamo agreed to pay $5 million to the Department of Labor.
In the agreement, Alamo promised to pay $5 million by mid-1994; $2 million of that by Sept 1. He could face a contempt of court citation if he fails to abide by the consent judgment.
Alamo, through Dickstein, filed a petition Monday in Little Rock for bankruptcy court protection so he could reorganize almost $17 million worth of debt, which included the Department of Labor settlement.
Waters, in a telephone interview from Hot Springs where he was holding court Tuesday, agreed the bankruptcy idea came up in his chambers on June 15 but said it was another of the lawyers in chambers that day, not him, who suggested bankruptcy court.
Waters said Dickstein had “wondered out loud” about how he could get all of Alamo’s
debtors together to work out a plan to satisfy the $17 million debt. Waters characterized the talk as a general discussion among the attorneys on how that might be done. The talk was not part of the settlement discussions, he said.
The subject came up as attorneys wondered how the consent judgment Dickstein was about to sign for Alamo could work. According to the consent judgment, Alamo would sell property at Saugus, Calif., to raise money for the Sept. 1 $2 million payment.
But the Internal Revenue Service, which has a $6.6 million claim for back taxes, and Pete Georgiades, attorney for former Alamo followers who were awarded more than $2 million against Alamo, both have liens on that property. Dickstein would have to clear up those liens before he could sell the land and use the money for the Department of Labor obligation.
Bankruptcy court offered the only solution, Dickstein said Tuesday.
The IRS and Georgiades claims were listed as liabilities in the bankruptcy court petition that also listed $500,000 in disputed attorney’s fees owed to Georgiades and $210,000 owed to Dickstein.
The petition listed Alamo as having no assets. Dickstein insisted that Alamo didn’t own the Saugus property he promised Waters he would sell. The land was owned, Dickstein said, by Twentieth Century Holiness Tabernacle Inc.