Can One’s Fame Be Asset in Chapter 7 Bankruptcy Filing?

A recent blog post from a fellow Michigan bankruptcy attorney, Laura Genovich, raises the interesting question of how a famous person (famous for good or bad reasons) can factor into their bankruptcy case. Attorney Genovich looks as the ongoing bankruptcy filing of Casey Anthony in Florida. Here’s her write up of the situation on the Michigan Bankruptcy Blog:

FAME AS AN ASSET: WILL CASEY ANTHONY’S CHAPTER 7 BANKRUPTCY CASE PRECLUDE FUTURE BOOK AND MOVIE DEALS?

In re Casey Marie Anthony, Bankr. M.D. Fla., Case No. 8:13-bk-00922-KRM
Although this blog typically focuses on Michigan bankruptcy cases, last week’s Chapter 7 filing by Casey Anthony raises interesting questions about the impact of bankruptcy on public figures.

Casey Anthony held the national spotlight for nearly three years after being charged with murdering her two-year-old daughter, Caylee. Anthony initially alleged that Caylee was kidnapped by her nanny, then claimed that Caylee accidentally drowned in the family pool. After a jury found her not guilty on all charges except some misdemeanors, Anthony faced a barrage of lawsuits, including claims for defamation and for reimbursement by private investigators who searched for Caylee in the months before her remains were found.
Those lawsuits ground to a halt when Anthony filed a voluntary Chapter 7 petition in the Middle District of Florida on January 25, 2013. In her bankruptcy papers, Anthony lists few assets (comprised mostly of household goods) but discloses unsecured debts of nearly $800,000, plus numerous debts of unknown amounts. The debts include the pending lawsuits against her and $500,000 in legal fees owed to her criminal defense attorney.

DISCHARGEABILITY OF DEBTS
If Anthony obtains a discharge, many of those debts – including her legal fees and other costs arising out of her nationally televised murder trial – will be wiped away. The dischargeability of the defamation claims is more questionable, as Florida’s bankruptcy courts have recognized that defamatory statements can be a “willful and malicious injury” – and thus excluded from discharge – if the debtor knew the statements were false.2 The plaintiffs in the defamation actions would be required to file lawsuits in bankruptcy court to determine whether the debts are nondischargeable.

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