Posted: Thursday, March 10, 2016 12:10 am
A Decatur used car dealership that is the subject of a lawsuit between its partners has filed for bankruptcy in federal court with a list of creditors that includes Morgan County Sheriff Ana Franklin.
Priceville Partners LLC filed Chapter 11 bankruptcy in the Northern District of Alabama on Friday listing more than $5.4 million in claims from creditors.
Franklin’s $150,000 claim stems from a loan she made to the company last year, she said Wednesday.
The filing showed the company with between $500,000 and $1 million in assets.
Harold Jeffreys, a Decatur businessman and former banker, signed the filing as the company’s majority member. Jeffreys, who owns 60 percent of the company, late last year filed a civil lawsuit in state court against company partner Greg Steenson, who owns 40 percent of the company.
Jeffreys claims in the civil lawsuit Steenson owes him $3.2 million from unpaid loans, and Steenson misappropriated the money from the company and Jeffreys.
Lee Benton, a Birmingham attorney representing the company in the bankruptcy case, said Wednesday the company’s assets need to be liquidated for the creditors to be paid.
Unsecured creditors of Priceville Partners would receive a pro rata share of the proceeds from liquidation, Benton said.
Jeffreys earlier filed a motion in the civil lawsuit asking that the company’s assets be liquidated.
Jeffreys’ $3.4 million claim is the largest of 21 claims by 17 individuals and companies on the creditors’ list.
Franklin said she has known Jeffreys for a long time and knew his reputation as a good businessman when she used money from her savings and her retirement for the loan.
Franklin said she knew Steenson had “prior issues,” but did not know Steenson was part owner of the company when she made the loan. She said she thought Jeffreys owned the company and Steenson ran the company.
Steenson pleaded guilty in 2002 to federal bank fraud conspiracy charges. He was sentenced to more than four years in federal prison and ordered to pay more than $5.2 million in restitution.
Franklin said “it would have been nice to have known” Steenson owned part of the company when she made the loan.
“I don’t know if it would have affected my decision,” she said. “I may have asked additional questions if I had known.”
Franklin said her discussions about a possible loan were with Jeffreys, and she never talked to Steenson.
Franklin said she did consult with Steve Ziaja, whom Franklin said she sees socially, before making the loan.
Ziaja, a state Alcoholic Beverage Control agent, has a $504,999.54 claim listed in the bankruptcy filing for loans he made to the company. He also has intervened in Jeffreys’ civil lawsuit to protect his interests as a creditor.
Franklin said her loan seemed like a good investment opportunity when she discussed the matter with Ziaja.
Franklin said her loan and Ziaja’s loans, which were made before Franklin’s loan, to the company are completely separate.
“His money has nothing to do with my money,” she said.
Franklin didn’t seem to hold out much hope for recovering her $150,000.
“Any time somebody files for bankruptcy, there’s not a great chance you’ll get your money back,” she said.
Other local creditors with large claims in the bankruptcy filing include Malcom F. Walker, of Mount Hope, $538,860.08; Robert E. Burton, of Moulton, $156,486.50; Lynn Layton Chevrolet, of Decatur, $111,700; Jason Bowling, of Hartselle, two claims totaling $94,112.80; and Dwight and Paulette Masterson, $47,800.
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