Bankrupt Tycoon Can Be Forced to Reveal Assets, Panel Finds

(CN) – A bankrupt Seattle real estate developer who fled the United States to avoid creditors may be required to disclose foreign accounts, a Ninth Circuit Bankruptcy Appellate panel ruled Wednesday.

The panel reversed a lower court’s decision not to compel disclosure due to lack of authority.

The U.S. Bankruptcy Court for the Western District of Washington can require Michael Mastro, who now lives in France, to sign a consent directive authorizing international banks to provide information about Mastro’s accounts, the three-judge panel ruled.

Mastro, who was forced into the largest personal bankruptcy in Washington state in 2009, fled with his wife Linda to France to escape criminal prosecution on fraud and money laundering charges and to avoid turning over assets.

France has refused to extradite the 93-year-old.

Chapter 7 trustee James Rigby Jr. asked for the directive and appealed to the Ninth Circuit when the bankruptcy court refused, saying it did not have the authority to issue a consent directive.

“Extraordinary cases may require unusual measures; and this case certainly qualifies as extraordinary,” U.S. Bankruptcy Appellate Judge Laura Taylor wrote in the unanimous opinion.

She said the “extraordinary lack of cooperation” by Mastro caused Rigby to seek the directive.

The panel stopped short of saying the lower court should issue the consent directive and remanded the case for review.

U.S. Bankruptcy Appellate Judges Gary Spraker and Frank Kurtz also sat on the panel.

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