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Archive for Sunday, September 28, 1997

HOMESTEAD BANKRUPTCY COMING TO CLOSE

September 28, 1997

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Lawrence creditors stand to get back at least part of the money they lost to the failed company.

Litigation in a 5-year-old bankruptcy case is coming to an end, but payments to creditors won't begin until early 1998.

Homestead Land Title Co., a Topeka-based title insurance and escrow agency, closed its Lawrence office in late 1992 after a failed reorganization lead to bankruptcy.

The bankruptcy caused about 60 Lawrence clients to lose tax and other payments made to Homestead.

Edward Nazar, attorney and trustee in the case, recently said the final piece of litigation was coming to a close. Nazar had sued a bank that handled certificates of deposit for Homestead in an effort to recover the funds.

The lawsuit was settled in early September, awarding $43,500 to the trustee, and is awaiting approval from a Kansas bankruptcy judge. A Sept. 25 objection date had been set, but no objections were filed in the case.

"I think this is it," Nazar said. "The order has been tendered, and when the judge approves that, that will settle this."

Although immediate approval of the settlement is not anticipated, Nazar said the judge's OK is expected soon. After approval is issued, creditors in the case will have to be sorted through and the money divided.

Some creditors have been paid through other accounts, but so many are left that few will be paid in full, he said.

"There's just too many creditors and not enough money," Nazar said. "The money will be so thinly spread, and I don't know the full extent of allowable claims."

The company originally estimated it owed from $1 million to $9.9 million to from 16 to 49 creditors.

At the time the business closed, it was holding more than 600 contracts for deed in escrow.

The company's president, David C. Marker, was found guilty on several indictments, including misappropriating customer trust funds, check kiting and embezzlement. He was ordered to repay more than $500,000 to 395 victims and sentenced to 21 months in federal prison in late 1994.

Since that time, lawyers and trustees have been tracking down the company's money, sorting out records and dealing with lawsuits.

Nazar said escrow deposit holders with less than $900 invested, taxing authorities and wage claimants would have top priority, according to priorities set by state bankruptcy statutes.

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