RICHMOND, VA (WWBT) - First the corporation "Thermo-Press, Norvell Awning" went bankrupt. Now, Richard Reynolds is seeking to protect his personal assets. 12 on Your Side has learned Reynolds himself has filed Chapter 7 bankruptcy.
Chapter 7 is the cheapest, quickest, least painful way to file. This type of bankruptcy allows you to walk away from your debts and start over. Richard Reynolds is continuing his silence, offering no comment.
If the Chapter 7 bankruptcy is approved, Reynolds no longer needs to repay debts that were incurred before he filed for bankruptcy. The heir to the Reynolds foil fortune wants a fresh start. Among those not happy, former company owner Buddy Kovacs. He says Reynolds owes him money from the original, company sale years ago.
"I want nothing out of this guy except what he owes me. That's all I ever asked for," said Kovacs. "I have just never ever encountered a guy like this"
Reynolds apparently doesn't want to risk losing all he has, including his $1.2 million house in Windsor Farms. There are exemptions like clothing, furniture, and household goods, but the goal is to liquidate non-exempt assets and pay back your creditors. We consulted a legal expert.
"He probably doesn't think he has any assets or has any assets worth going after," said John Moore, attorney at law with Coates & Davenport. "For example, his house may not have any equity in it. It may be mortgaged such that there's nothing left there for unsecured creditors."
Moore says a lot is still unknown, since Reynolds has yet file papers, which lists his personal assets and liabilities. He has until October 9 to do that.
"He's supposed to disclose all his assets and all his liabilities. It's also true if he were to get an inheritance within 6 months. That's part of the bankruptcy estate as well," Moore said. "If all goes through then he walks away with what's called a fresh start. There's no such thing as debtors prison."
The bankrupt Norvell Awning Company was bought for $58,000. That sale was finalized yesterday. On Thursday, you'll hear how they plan to retool the company's image.