Mack’s brother may bail him out of bankruptcy

Diana Sahagun

Tuesday, June 4, 2002 | 10:56 a.m.

Las Vegas Councilman Michael Mack has a potential buyer to help him emerge from Chapter 11 bankruptcy protection -- his brother.

According to a motion filed in U.S. Bankruptcy Court in April, Steven Mack -- who owns SuperPawn franchises in Nevada and Arizona -- has made an offer to purchase the assets of his brother's limited liability company and his pawnbroker license for $1 million, in order to quickly conclude the bankruptcy case.

Michael Mack's Nevada Asset Lenders operates First Class Pawn & Jewelry Superstore on West Flamingo Road. The councilman owns the store.

The potential deal was included in a motion by a group of 20 creditors who are opposing the councilman's request to extend the period to file his reorganization plan.

Mack filed for Chapter 11 bankruptcy protection in December in an attempt to ward off creditors seeking payment for more than $3 million in loans.

A reorganization plan was expected to be filed within four months, but Mack has asked to extend the period until September, in part to review and negotiate the offer by Steven Mack, according to court records.

The 20 creditors, though, are opposing Mack's proposed delay, saying Steven's offer is "insufficient to pay unsecured creditors" and that he is getting preferential treatment.

"As a result, the (creditors) are concerned that preferential treatment may be given to Steve Mack, an insider ..." and that extending the period to file a plan will "chill" competing bids for Mack's assets.

A hearing date has not been set by a judge to determine whether Mack should be granted additional time to file his restructuring plan.

Mack said Monday that his brother is one of several parties that have made an offer to purchase the company's assets, thus assuming his debt.

"I know there's one or two other companies that have come in and my responsibility and my feelings are I want to get the most for my creditors," Mack said. "So the highest and best offer will be looked at."

Mack said even though he may sell his company's assets -- and his pawnbroker's license in the case of his brother's proposal -- he said he won't necessarily be out of business.

The proposals to purchase his assets could vary from retaining him as management, or as a shareholder, Mack said.

Mack is trying to resolve his bankruptcy case during a tumultuous time in his political career. Last week, a municipal judge set an August trial date on misdemeanor charges that Mack knowingly broke the city's ethics code on five occasions.

The Las Vegas Ethics Review Board found in February that Mack had willfully violated the city's ethics code on five occasions when he voted to postpone and ultimately deny a car dealership application without disclosing he owed $57,000 to a rival dealer.

The board's attorney, John Graves Jr., was directed to take the case to municipal court, where he filed five misdemeanor charges against the councilman.

If Mack is convicted of a misdemeanor, he will be removed from office.