Christopher Kramer, Writer
Michael R. Mastro is a Western Washington real estate mogul who chose to file for bankruptcy last year. He is hundreds of millions of dollars in debt. And yet, as has been revealed in the subpoenaed financial statements in his bankruptcy case, he has been enjoying vacations and fancy meals even while his finances are picked over by the court.
The Seattle Times is reporting that Mastro and his wife Linda took an Italian vacation in the same month that he filed bankruptcy petition papers that described his deep debt and his attempts to come out from under that debt. A few months later, his credit card statement showed an almost $3,000 bill at one of Seattle’s posh restaurants. There were even car bills for a Rolls-Royce and a Bentley.
The credit card statements and checking account stats have been brought into Mastro’s bankruptcy proceeding and made public by the trustee in his bankruptcy case.
Many Washington residents want to know: How does a bankrupt former real-estate tycoon keep up the fancy appearances?
Answering that question has become one part of one of the state’s more complex bankruptcy cases. Trustee James Rigby, who is overseeing the organization and liquidation of Mastro’s assets and sending the proceeds to lenders, as the Seattle Times puts it, “smells a rat.”
Rigby has spent the last year pursuing what he believes are deals Mastro made that are meant to keep money away from his creditors. Rigby has filed several lawsuits to undo these deals and open up blocked assets for creditors.
The Washington newspaper also says that Rigby has found Mastro’s luxurious lifestyle to be suspect, that he is hiding assets that should be going to banks and to the individual investors that made his lifestyle possible. Many of these investors are Italian Americans, like Mastro, elderly, and from the area. These investors trusted Mastro with millions of dollars in investments.
James Frush is one of Mastro’s attorneys. According to him, Mastro’s luxurious lifestyle doesn’t appeal to everyone, “but that’s not a crime.” According to Frush, the money that is funding Mastro’s extravagant vacations and meals does not come from Swiss bank accounts.
Instead, Frush says that the money that has financed Mastro’s activities have come from friends, from the separate assets of his wife, and from hundreds of thousands of dollars that he earned from work as a real-estate consultant. This income, according to Frush, is not open to creditors.
“They’re trying to paint Mike as the Great Satan,” said Frush. “He’s not.”
According to the article, Frush went on to say that it is the lawyers who are the bad guys, and that they are pursuing a “scorched-earth” campaign, and that they are more interested in making money.
Despite Frush’s claims, Rigby maintained that “lots of circumstances in this case are very suspicious."
Mastro made his money as a real estate developer, buyer and seller. He is 85. With the collapse of the housing market in 2008, Mastro lost a lot of the revenue that was coming in from his properties, as well as losing out on the money owed to him by other investors and developers.