Bankruptcy Law in Florida Creates `Deadbeat's Haven'

By Rohter, Larry | THE JOURNAL RECORD, July 27, 1993 | Go to article overview

Bankruptcy Law in Florida Creates `Deadbeat's Haven'


Rohter, Larry, THE JOURNAL RECORD


N.Y. Times News Service

PONTE VEDRA BEACH, Fla. _ For an admitted felon who arrived in Ponte Vedra Beach just a step ahead of the irate victims of his insider trading, Martin A. Siegel manages to live quite well, thank you. The former Wall Street investment banker occupies a $3.25 million, 7,000-square-foot beachfront home whose purchase put Siegel's assets out of reach of a $2.75 billion civil suit.

Just up the road at the Marsh Landing Country Club lives Bowie K. Kuhn, the former baseball commissioner who moved here in 1990 as his Manhattan law firm was going through bankruptcy proceedings.

Kuhn enjoys the benefits of a Florida life style in his million-dollar, five-bedroom, five-bath house, which he bought after creditors seized his weekend house in the Hamptons and were just about to attach his $1.2 million home in Ridgewood, N.J.

Good weather and the many golf courses and beach resorts scattered across this elegant Jacksonville suburb are not the only advantages of a legal residence in Florida.

As Siegel and Kuhn knew when they came here, a state law prohibits the seizure of a person's legal residence in bankruptcy proceedings, regardless of the value of the property. Florida also allows debtors to protect a broad array of financial assets, ranging from wages to annuities and pension plans.

The law is part of a broad and increasingly controversial network of legal exemptions from bankruptcy claims that have led Florida to be dubbed "the deadbeat's haven" and "the debtor's paradise."

"I believe this law is grossly unfair," said Judge A. Jay Cristol, a federal bankruptcy judge in Miami who has been an outspoken advocate of overhauling Florida's bankruptcy and homestead exemptions. "Theoretically, you could shelter the Taj Mahal in this state and no one could do anything about it."

Siegel and Kuhn are not alone in their decision to seek refuge in Florida. A multimillion-dollar horse ranch near Ocala is now owned by Marvin Warner, an Ohio banker and former U.S. ambassador to Switzerland with more than $4 billion in claims against him as the result of the collapse of the savings and loan association he owned. In April 1991, Warner began serving a prison term of 3 years for violating securities laws and making unauthorized money transfers.

And Harvey Myerson, Kuhn's law partner in the New York firm Myerson Kuhn, moved to Key West in the midst of his travails, where he bought a $1.75 million Mediterranean-style oceanfront home known locally as "the southernmost house in the United States."

Had Myerson remained in New York, he would have been allowed to shelter only $10,000 in a homestead. In California, he could have sheltered $50,000 for a home that he alone occupied or $75,000 for a family home. Texas and a few Plains and Midwestern states also have unlimited homestead exemptions, but none seem to draw wealthy debtors like Florida.

"It has been my experience over the years that people from all sorts of places suddenly seem to move to Florida once they know they are in trouble with the law," said Frank Maas, a New York lawyer who represented Marine Midland Bank, which lost a $3.1 million claim against Kuhn and Myerson.

What is more, Florida has sweetened the attraction with numerous other broad exemptions that attract millionaire debtors from other states. In addition to sheltering their homes, people filing for bankruptcy in Florida are allowed to exempt all of their wages, including wages deposited in bank accounts, and the total value of any annuities, pension plans, individual retirement accounts, life insurance policies or profit-sharing benefits they have. Creditors can go after cars, boats, jewelry and other personal property.

Florida's homestead exemption is part of a populist tradition that dates to the 19th century, when a person could buy a comfortable house in the city, or a large working farm, for $1,000 or less.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Bankruptcy Law in Florida Creates `Deadbeat's Haven'
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.