KPLU Local News
(2009-09-16)
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SEATTLE, WA
(KPLU) -
Hundreds of people listed as "friends and family" stand to lose millions in the bankruptcy of Seattle developer Michael Mastro. Many of them crowded into a room Tuesday at the federal courthouse in Seattle.
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It was the first public meeting in one of the largest bankruptcies in Washington state history. And it started with a procedural move by several lawyers representing investors who stand to lose the most in this half a billion dollar case. Jerome Shulkin is the attorney for a non-profit called the Italian Club and several individual investors in Mastro's "friends and family" fund. It totals at least a hundred million dollars, but is unsecured and likely a casualty of the real estate crash. Shulkin says they want the assets put under what he calls "proper management" till the nation's economy recovers.
"It's not a question of putting blame on Mr Mastro. It's a question of, we are where we're at, let's find a way out of this without destroying the assets."
They think the court-appointed trustee isn't qualified and they've launched a campaign to elect someone else.
"You know this takes somebody with the skills like Donald Trump, for example, who have pulled out of these things before."
There will be an election at the next hearing, on October 28th.
Restaurateur-turned-real-estate-investor Barry Block is baffled with the details he learned about Mastro's real-estate empire. Among them: that Mastro's Rolls Royce, and maybe his $10-million-dollar Medina home, were recently transferred to a trust in Belize.
Bloch says he doesn't have enough information yet to decide whether Mastro is a villain in this story. He selfishly wishes the banks hadn't forced Mastro into bankruptcy.
"I wouldn't take back putting money in Mike, Mastro. He's had a terrific reputation for 30+ years. You could get your money on demand. I once asked him for $400,000-dollars in one day - I had it. So I moved money in and out of there and it was comfortable."
Others in the audience were less generous. One woman said she wanted to throw up after she heard that Mrs. Mastro still has hundreds of thousands of dollars worth of jewelry, including a 27 carat diamond ring. Another man is expecting to see Mastro in jail soon for selling shares in "a house of cards that was destined to collapse." He says he's a real estate broker, representing another group of friends, interested in scooping up some of Mastro's assets at a steep discount.
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