Wednesday, September 26, 2012

Media Discovery Of Old Bankruptcy Records Leads WWE Moguls To Cough Up, Pay Off 36-Year Old Debts As U.S. Senate Race Between Candidates w/ Creditor-Stiffing Pasts Heats Up

In Hartford, Connecticut, The Day reports:

  • A personal bankruptcy cleanses the past to give debtors a fresh chance. Discharged of a legal obligation to pay their overdue bills, most bankruptcy filers never do. That is how the system was designed to work.

    Yet anecdotes exist about curious individuals who, out of personal convictions, political expediency or other reasons, later decide to make good on old debts that they officially jettisoned years ago.

    There was Walt Disney, who according to a biographer, eventually paid back creditors 45 cents on the dollar following the bankruptcy of his early Laugh-O-Gram film studio. And Harry Truman, the nation's 33rd president, who settled obligations on his long-out-of-business haberdashery.

    Add wrestling moguls Linda and Vince McMahon to the club.

    Connecticut's Republican nominee for the U.S. Senate, Linda McMahon announced last week that she and her husband will repay with interest all private individual creditors in their 1976 personal bankruptcy that happened before their wrestling entertainment business, now known as WWE, made it big. They have since expanded the creditor reimbursement to include labor unions' pension and health care funds.

    In her written announcement, McMahon said one reason why they are now making good on 36-year-old debts are because the bankruptcy records, once assumed lost to time, were located last week by The Day in a national archives office.

    Another possible reason - although unsaid by McMahon - was the gesture's effect of denying her Democratic opponent, current 5th Congressional District Rep. Chris Murphy, from using the old list of stiffed creditors as campaign ammunition to deflect attention from his more recent history of late bill payments.

    Additionally, her statement's closing remarks seemed to suggest that McMahon felt a moral tug to repay old creditors, now that she and her husband have recovered from their early struggles and achieved extraordinary success and wealth.

    McMahon's personal spending in this year's Senate campaign and her unsuccessful 2010 run now exceeds $65 million. By comparison, the young couple faced $955,805 in creditor claims when they filed bankruptcy.
  • The McMahons intend to repay their eligible creditors at four times the initial amount due. Her campaign would not comment Friday on why the McMahons' biggest and most numerous creditors - financial institutions, nearly all of them since absorbed into other banks - will not be paid via their new ownership.
  • Murphy, McMahon's Democratic opponent, has a history of late payments on financial obligations. He was reportedly late on his car taxes seven times between 1998 and 2005 and on paying a real-estate bill in 2005.

    He also missed rent payments in 2003 and mortgage payments on a Cheshire home that led to a brief foreclosure scare in 2007. The congressman said he paid all his creditors in full.
For the story, see McMahons' repaying of old debt a relatively rare gesture (Recipients startled to receive checks).

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