Former summit PUD chief files for bankruptcy
Steven Grimm, who has been charged with embezzling more than $500,000 from the Donner Summit Public Utility District, filed for Chapter 13 bankruptcy last week.
Grimm, along with his wife, Sandra Harmon, filed a petition for bankruptcy in Sacramento on Sept. 5. Because they filed under Chapter 13, it might allow them to restructure and repay their estimated $1.18 million debt, which includes more than $160,000 of credit card debt and liens on their property from the Internal Revenue Service.
However, there might be a question as to whether Grimm will be able to file Chapter 13 because of the embezzlement charges. If found guilty by the Nevada County Superior Court in the criminal case, Grimm’s debt would increase if he has to repay the alleged embezzled funds to the utility district, which is listed as a disputed claim on the bankruptcy petition along with Donner Ski Ranch, Inc.
It could potentially increase his unsecured debt beyond the $290,525 threshold for chapter 13, forcing Grimm and Harmon to file in less-favorable chapters 7 or 11.
“Although the debt usually doesn’t exist until there’s some sort of ruling, it is something we would very much need to look into,” said Neil Enmark, staff attorney for Sacramento Chapter 13 Trustee Larry Loheit.
Loheit will hold a meeting of creditors to investigate Grimm’s bankruptcy petition on Oct. 16 in Sacramento. Enmark said the meeting might be continued because of the criminal proceedings.
Although there is some question as to whether Grimm will have to appear in the meeting of creditors, Grimm’s bankruptcy attorney, Craig Demetras, said, “My position is that a client should appear.”
Grimm has waived his right to appear in some of the criminal proceedings, but he may have to answer to some of the same questions in the bankruptcy hearing that he would face in Nevada County Superior Court, Enmark said.
“Questions like ‘What happened to the money?’ could be asked,” Enmark said. “We could ask about gambling expenses and other extraordinary expenses. It depends on how polite or impolite the proceedings go.”
By Sept. 20, Grimm, Harmon and their attorney will have to create a financial plan to reorganize their debt for the bankruptcy court.
“We’re working on that right now,” Demetras said. “There’s a couple of issues as I’m sure you could imagine.”
Demetras wouldn’t comment on the effect the embezzlement charges will potentially have on Grimm’s chapter 13 filing.
“Generally I try not to try my cases in the paper,” Demetras said.
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