June 11, 2001
We have just received a preliminary report that on Friday, June 8, Liberty Lobby again filed for Chapter 11 bankruptcy.
As of now, we do not know whether this is allowed (due to the fact that they first filed for bankruptcy only three years ago), or where this leaves Liberty Lobby’s other creditors.
In July 1999, Liberty Lobby signed a stipulated judgment to the effect that their multi-million dollar debt to IHR was non-dischargeable, meaning that subsequent bankruptcies such as the most recent filing will not stay IHR’s collection efforts.
If this action is allowed to proceed, it is likely that they will be forced into Chapter 7 bankruptcy, under which a bankruptcy trustee will be appointed to run Liberty Lobby (currently, Willis Carto remains at the helm). Alternately, a trustee could be appointed to run Liberty Lobby under Chapter 11, as well.
Because this is a delaying tactic (that is, Liberty Lobby is not really bankrupt), it is expected that Carto would vigorously oppose any move to oust him.