Danny Masterson who starred in "That 70's Show," filed Chapter 11 bankruptcy for his financially troubled limited liability company after the company was sued by TomatoBank for the balance their loan. Masterson's company took out a loan out for $3.2 million in 2007 and after several extensions on payment, the lender, TomatoBank, eventually sued for $2,807,531 as well as for interest in the amount of $58,314 and delinquent property taxes totaling $45,723. But Masterson's bankruptcy attorney has insisted that the company is only looking to reorganize the company in bankruptcy and that the lender does not have a legitimate dispute.
"We're in bankruptcy to reorganize and ultimately finish the project and sell it and pay creditors where creditors are due," Masterson's bankruptcy said.
The "That 70's Show" star insists that he will be able to finish the project and sell the condos even in this economy where property values are still depressed. However, if the company is able to continue their claim against the actor's company, they will need to present a better argument to the bankruptcy trustee. Masterson will need to show that his company can survive and exit Chapter 11 bankruptcy with the ability to repay his creditors. In order to do that they may need to come to some settlement with the lender or find new financing to pay off the older creditors and finish the project. If they are not able to any of those things, the worst case scenario could be a liquidation of the property to pay creditors or repossession of the property by the bank with court approval of course.