Companies associated with Kenneth Starr, the "celebrity" financial advisor who admitted to bilking his famous clients and other investors out of millions of dollars, filed for Chapter 7 bankruptcy liquidation.
The bankruptcy filings by Starr Investment Advisors LLC and Starr & Co. come as Starr-who once counted Martin Scorsese and Wesley Snipes among his clients-awaits sentencing next month on one count of money laundering. In a plea agreement struck last year, Starr pleaded guilty to the charge, which carries a maximum sentence of more than 12 years' imprisonment. The Wall Street Journal reported that Starr's lawyer is seeking a more lenient sentence of five years for his 67-year-old client.
Starr himself (not the prosecutor in the Whitewater investigation) faces an involuntary Chapter 7 bankruptcy petition, which court papers show several creditors filed against him last month.
The trustee in this Chapter 7 bankruptcy case will oversee the liquidation of the firms' assets and the distribution of those assets to creditors. We will likely see lawsuits designed to recover funds because the bankruptcy estates of the Starr firms are greatly imbalanced with debts far outweighing assets. Starr Investment Advisors has less than $23,000 in assets versus $3.1 million in debts while Starr & Co. has $154,000 in assets and $3.2 million in debts according to its bankruptcy petition. If the bankruptcy trustee doesn't recover funds, very few creditors will receive payment. And even those creditors who are paid could expect to receive very little due to the small size of the bankruptcy estate.
(source: http://blogs.wsj.com/bankruptcy/2011/02/17/kenneth-starrs-companies-file-for-bankruptcy-liquidation/ )