PR exec found to have concealed assets

Malcolm Hall

Tuesday, April 2, 2002 | 10:49 a.m.

Denny Weddle, a longtime Las Vegas public relations executive who filed for bankruptcy in March 2000, has appealed a court judgment that found he concealed assets from creditors.

Weddle is also suing his former attorney, claiming he gave him bad advice on the matter.

Weddle, former chairman of the Las Vegas Chamber of Commerce and owner of Weddle & Associates, an advertising and public relations firm, first filed for reorganization protection under Chapter 13 of the U.S. Bankruptcy Code, but on Sept. 28, 2000, converted his action to a Chapter 7, which calls for liquidation of all assets.

He originally listed assets of $241,460 against $382,676 in debt, but after the court discovered he owned a vacation house in West Okoboji, Iowa, and other assets were included, those numbers rose to $718,253 in assets and more than $1.2 million in liabilities.

In a November trial, Weddle said he had relied on the advice of his former counsel Dirk Ravenholt to not disclose ownership in the house and two trusts associated with it. In his January appeal, Weddle claims that fact means the court erred in determining he had intent to defraud creditors.

But Bankruptcy Judge Robert Clive Jones said during the trial that while that fact may give Weddle a malpractice claim against his attorney, he has to "bear responsibility for the failure to put those assets in the schedule."

Jones then denied Weddle's petition to discharge his debts and the case remains open.

Under bankruptcy law, petitioners must disclose all assets, including those sold or transferred within one year of filing for protection.

Records show that on Sept. 15, 1998, Weddle created a revocable trust and an irrevocable trust with himself as trustee of both trusts and principle beneficiary of the revocable trust. But on April 21, 1999, the court claims that Weddle transferred his personal interest in the Iowa property into the Denny Weddle Trust, which was within one year of his filing for bankruptcy.

"So at a minimum there was an obligation to report this transfer of trust if not to report the trust and the home itself," Jones said. "You have ... knowingly and fraudulently made a false vow."

Contacted on Friday, Weddle said there were no assets hidden.

"I had a trust that had a property in it and brought it to the attention of my attorney, but he said it is not included, it's your children's, not yours," he said.

Weddle filed suit against Ravenholt in Clark County District Court on March 27, alleging the attorney did not use due care in representing him in the bankruptcy case because he had told Ravenholt of the Iowa property early on in their attorney/client relationship but months before it was disclosed to the court.

The lawsuit claims that as a result of Weddle's bankruptcy discharge being denied, he is now liable for about $1 million in debt and has incurred $40,000 in damages. He seeks compensatory damages of at least $10,000, punitive damages exceeding $10,000 and attorney fees and costs.

Ravenholt on Friday said he had not yet seen the suit but denied Weddle's allegations.

Weddle said he filed for personal bankruptcy because of his involvement in promoting a motorcycle event that went bad and problems with a former partner in the venture.

The largest claim against him was filed by Nevada Conservatory Funds LLC, which loaned $200,000 to Weddle to produce the motorcycle event -- Super Run '96 -- that was to be held in Las Vegas in 1996. Nevada Conservatory claims Weddle now owes it $529,120 because of the 36 percent interest on the loan.

"It (the event) was just not a good thing," Weddle said. "They were going after me in a personal way. ... I filed for personal because I had signed a personal note. It had nothing to do with my company here."

William Leonard, the court appointed trustee in Weddle's bankruptcy case and some 2,000 others filed in 2000, said cases of assets not being disclosed are not unusual in Las Vegas. When that happens, the court goes after the debtor, he said.

"In this case, Weddle, through his attorney, filed a schedule that failed to disclose certain assets, bank accounts, interest in his corporation, his assets in Iowa," Leonard said. "He listed them as a footnote saying he had a family trust. We spent a lot of time looking at these things. He provided the asset and undervalued it on one occasion and then again on another."

Among other claims in Weddle's case are Nevada Federal Credit Union -- $4,939; First Security Bank of Nevada -- $73,837; James and Nancy Small of Las Vegas -- $62,000; Jimmerson Hansen PC -- $12,802; Andrea Thomas of Las Vegas -- $44,456; Continental National Bank of Las Vegas -- $72,600; and Cashman Cadillac on a car loan secured by ONYX Acceptance Corp. of Las Vegas -- $33,142.

Other claims are for bills from several credit card companies.

Leonard said he likely will object to some of the claims if they were not filed in a timely manner or do not provide proof of the actual debt. A hearing will then be held on their validity and dollar value.

"If a number of them are not allowed, the creditors could do very well," he said. "We're working on some now that may cause it to be a 100-percent (recovery) case."

Leonard said he might look into the Nevada Conservatory Fund claim because of the 36-percent interest associated with the loan, but hasn't decided yet.

"We'll look at possible inflated interest rates that are not fair to unsecured creditors," he said. "Once the assets are all collected, we would next file an objection to some of the claims, then write a final report where we give our proposed distribution. That's still some time down the road."