Bad Boys of Bankruptcy: Season 3, Episode 8: Gibsons, Fenders, and Fraud
In this episode of Bad Boys of Bankruptcy, host Judge Gunn talks with North Carolina attorney John C. Bircher, III, who served as a Chapter 7 trustee in the bankruptcy case of Gregory Sipe. Mr. Sipe filed a Chapter 7 bankruptcy case in the Eastern District of North Carolina in 2010, and listed on his schedules “several” collectible guitars that Mr. Sipe attested were worth a total of $50,000, but that were currently pawned and would require $40,000 to redeem from the pawn shop, so Mr. Sipe scheduled their value as $10,000. John describes the efforts he and some creditor’s attorneys went through to uncover the truth about the debtor’s guitar collection, which would up containing in excess of 360 guitars, which John liquidated for the benefit of the estate, netting nearly $900,000 at auction. One guitar, a Gibson Jimmy Page #7 signed guitar, sold for $22,000. John tells the story about driving to the debtor’s home in Chesapeake, Virginia in a truck with his auctioneer to find out the true scope of the debtor’s guitar collection, which ultimately required the auctioneer to send up two more trucks and two enclosed 24 foot trailers to seize the nearly 400 guitars which were stored in the debtor’s two-car garage, which had been converted to a climate-controlled storage facility. The debtor’s extensive collection included numerous autographed and exclusive guitars, including a custom-made Gibson Les Paul that the debtor had made which contained numerous ticket stubs to the concerts the debtor had previously attended embedded under transparent acrylic finishing on the body of the guitar and mother of pearl inlays on the fretboard. John’s efforts in liquidating the guitars allowed him to make a 43% distribution to unsecured creditors in the case. The debtor was later indicted for five counts of bankruptcy fraud, and ultimately pled guilty to a single count of falsifying records in bankruptcy. He was sentenced to 3 years of probation, 200 hours of community service, and restitution for $5,900.
