Post by T-Rex91 on Aug 20, 2009 14:04:01 GMT -5
This is an interesting case in GA right now.
Summary
The State Superintendent of Schools won a million dollars on "Are you smarter than a 5th grader" and pledged it to support 3 GA schools. She kept NONE of it for herself. Three months later, she and her husband filed bankruptcy. The bankruptcy attorney wants to seize the money to pay her creditors and block the donation to the schools.
Question
Should the pledge stand or should the monies be seized?
Demonstrators will picket a bankruptcy attorney’s office in Newnan on Wednesday afternoon to protest his efforts to gain control of $1 million that State School Superintendent Kathy Cox had pledged to donate to three state-run schools for the deaf.
The drama susrrounding the money began in an unusual place: On a television game show called “Are you Smarter than a 5th Grader?” with a chance to win $1 million.
Cox proved last August that she was indeed smarter and claimed the $1 million prize. Then, before a national broadcast audience, she pledged the money to scores of blind and deaf children who attend the three state-run schools.
But three months later Cox and her husband, John Cox, filed for Chapter 7 bankruptcy protection, leaving in its wake a slew of creditors embroiled in a tug-of-war with the state, which insists the cash should go to the schools. And, proponents for the students plan a protest Wednesday to demand the money.
“The state Board of Education contends Ms. Cox would not have been invited to the program other than in a position of playing for a charitable interest,” said Russell Willard, a spokesman for the Georgia Attorney General’s office, which is representing the Department of Education. “The monies won on that program should go to the charitable interests designated by Ms. Cox.”
Cox promised if she won, she would give the $1 million to Georgia Academy for the Blind in Macon; the Georgia School for the Deaf in Cave Spring; and the Atlanta Area School for the Deaf in Clarkston.
Those three institutions are state-run and, unlike most public schools, don’t rely on local funding.
But Gary W. Brown, the Chapter 7 trustee assigned to the case, doesn’t see it that way. On July 31, he filed suit against Kathy Cox and Fox Broadcasting Corp., which airs the game show, to claim the money for the creditors.
Fox had issued a check to Cox, but that check was returned. A Fox spokesman declined to comment.
Proponents of the deaf and blind children, including the Georgia Association of the Deaf, plan to protest in Newnan from 1 to 3 p.m. today in front of Brown’s law offices.
Their goal is to convince Brown to allow the funds to go to the three schools, said Christopher M. Patterson, president of the Georgia Association of the Deaf, Tuesday through a sign language interpreter.
No trial date has been set.
Trustees are charged with investigating and reviewing all assets that may be liquidated for distribution to creditors.
Brown seeks to seize the money to pay creditors to whom the Coxes are indebted. When they filed Chapter 7 last year, they cited debt of $3.5 million. Much of that debt was related to John Cox’s home-building business in Fayette County.
Brown, who was unaware of the planned protest until told by a reporter, said Cox won the money and the proceeds belong to the estate and should go toward creditors.
“Our position all along has been that it is the property of the bankruptcy estate,” Brown said.
But Patterson said Cox never intended to keep the money for herself.
“Kathy Cox announced on a TV show that she would give the money to the three state schools. She represented herself as a state superintendent and as a representative of the schools,” Patterson said. “We’re not going to give up. We’re going to continue with this until something is done.”
A judge may come to the case from a completely different perspective, however, bankruptcy lawyers say.
For one thing, it has less to do with bankruptcy law and more to do with state law as it pertains to public officials’ contracts governing what they can and cannot do with money they receive in their official capacity, said Gary W. Marsh, a bankruptcy attorney and partner at McKenna Long & Aldridge in Atlanta.
“The question for the judge is ‘Are the winnings from the contest her assets or not,’ ” Marsh said. “On the one hand, the creditors want to be paid. On the other hand, it doesn’t sound like Kathy Cox is going to end up with the money.”
How the judge rules is key to the ultimate outcome, he said, because if the winnings are deemed hers, then the $1 million would be included among assets that would be liquidated to satisfy creditors.
That Fox issued the check to Cox doesn’t necessarily mean that she has a legal right to the money, said Marsh and Todd C. Meyers of Kilpatrick Stockton of Atlanta.
“The issue seems to be whether or not she was there as herself and if she had some legal ownership,” Meyers said. “Just because the check was sent to her doesn’t mean she had a legal right to the money.”
Summary
The State Superintendent of Schools won a million dollars on "Are you smarter than a 5th grader" and pledged it to support 3 GA schools. She kept NONE of it for herself. Three months later, she and her husband filed bankruptcy. The bankruptcy attorney wants to seize the money to pay her creditors and block the donation to the schools.
Question
Should the pledge stand or should the monies be seized?
Demonstrators will picket a bankruptcy attorney’s office in Newnan on Wednesday afternoon to protest his efforts to gain control of $1 million that State School Superintendent Kathy Cox had pledged to donate to three state-run schools for the deaf.
The drama susrrounding the money began in an unusual place: On a television game show called “Are you Smarter than a 5th Grader?” with a chance to win $1 million.
Cox proved last August that she was indeed smarter and claimed the $1 million prize. Then, before a national broadcast audience, she pledged the money to scores of blind and deaf children who attend the three state-run schools.
But three months later Cox and her husband, John Cox, filed for Chapter 7 bankruptcy protection, leaving in its wake a slew of creditors embroiled in a tug-of-war with the state, which insists the cash should go to the schools. And, proponents for the students plan a protest Wednesday to demand the money.
“The state Board of Education contends Ms. Cox would not have been invited to the program other than in a position of playing for a charitable interest,” said Russell Willard, a spokesman for the Georgia Attorney General’s office, which is representing the Department of Education. “The monies won on that program should go to the charitable interests designated by Ms. Cox.”
Cox promised if she won, she would give the $1 million to Georgia Academy for the Blind in Macon; the Georgia School for the Deaf in Cave Spring; and the Atlanta Area School for the Deaf in Clarkston.
Those three institutions are state-run and, unlike most public schools, don’t rely on local funding.
But Gary W. Brown, the Chapter 7 trustee assigned to the case, doesn’t see it that way. On July 31, he filed suit against Kathy Cox and Fox Broadcasting Corp., which airs the game show, to claim the money for the creditors.
Fox had issued a check to Cox, but that check was returned. A Fox spokesman declined to comment.
Proponents of the deaf and blind children, including the Georgia Association of the Deaf, plan to protest in Newnan from 1 to 3 p.m. today in front of Brown’s law offices.
Their goal is to convince Brown to allow the funds to go to the three schools, said Christopher M. Patterson, president of the Georgia Association of the Deaf, Tuesday through a sign language interpreter.
No trial date has been set.
Trustees are charged with investigating and reviewing all assets that may be liquidated for distribution to creditors.
Brown seeks to seize the money to pay creditors to whom the Coxes are indebted. When they filed Chapter 7 last year, they cited debt of $3.5 million. Much of that debt was related to John Cox’s home-building business in Fayette County.
Brown, who was unaware of the planned protest until told by a reporter, said Cox won the money and the proceeds belong to the estate and should go toward creditors.
“Our position all along has been that it is the property of the bankruptcy estate,” Brown said.
But Patterson said Cox never intended to keep the money for herself.
“Kathy Cox announced on a TV show that she would give the money to the three state schools. She represented herself as a state superintendent and as a representative of the schools,” Patterson said. “We’re not going to give up. We’re going to continue with this until something is done.”
A judge may come to the case from a completely different perspective, however, bankruptcy lawyers say.
For one thing, it has less to do with bankruptcy law and more to do with state law as it pertains to public officials’ contracts governing what they can and cannot do with money they receive in their official capacity, said Gary W. Marsh, a bankruptcy attorney and partner at McKenna Long & Aldridge in Atlanta.
“The question for the judge is ‘Are the winnings from the contest her assets or not,’ ” Marsh said. “On the one hand, the creditors want to be paid. On the other hand, it doesn’t sound like Kathy Cox is going to end up with the money.”
How the judge rules is key to the ultimate outcome, he said, because if the winnings are deemed hers, then the $1 million would be included among assets that would be liquidated to satisfy creditors.
That Fox issued the check to Cox doesn’t necessarily mean that she has a legal right to the money, said Marsh and Todd C. Meyers of Kilpatrick Stockton of Atlanta.
“The issue seems to be whether or not she was there as herself and if she had some legal ownership,” Meyers said. “Just because the check was sent to her doesn’t mean she had a legal right to the money.”
