It's impossible to sell your company for $1.8 billion in 2008 and file bankruptcy in 2013. Well, uh, not exactly impossible... As a matter of fact, that's the case with Halsey Minor, the founder of the CNET Networks who sold CNET for $1.8 billion while netting some $200 million. Since then, he lost money on bad real estate investments and other ventures, and recently filed a Chapter 7 bankruptcy. The filing is not in Michigan but the procedure and law are basically the same.
Currently, the case is in limbo because it was dismissed on June 13 by the bankruptcy judge. The reason was the failure to file all required forms and information. Generally, a debtor can file a bankruptcy without including all of the required forms and information. There is usually a grace period of 15 days to supplement the petition with the remaining schedules.
Lawyers will often ask for an extension, which may result in an additional 15 to 30 days in most bankruptcy courts. In this case, the debtor's counsel either did not ask for an extension or got one and exceeded it. Usually, a motion to reinstate the case is granted if the missing documents are attached to the motion.
Apparently, that has been done and all papers are now filed, so that it's likely that the case will be reinstated by the California bankruptcy court. He has listed assets of more than $32 million and debt of more than $104 million in the court papers. Although this is a personal Chapter 7 bankruptcy, the magnitude of the assets and debts will require extensive administration and considerable efforts by the Chapter 7 Trustee to liquidate assets and provide distributions to the creditors.
In Michigan and elsewhere, a standard consumer Chapter 7 bankruptcy doesn't involve loss of personal assets, such as household goods, furnishings, clothing and other personal items because they're generally exempted by federal or state law. A house or car may be turned over to the secured creditor where the payments are behind and the debtor wants to eliminate the obligation. A fully-owned car can often be exempted and retained. All unsecured debt such as medical bills and credit cards are discharged completely in a Chapter 7.
Source: Bloomberg Business Week, "Halsey Minor Tries Again for Bankruptcy After Missed Deadline," Dawn McCarthy, June 15, 2013