Federal bankruptcy court has denied former wealth manger Bradley C. Reifler’s petition to dismiss more than $50 million in debts.
U.S. Bankruptcy Judge Cecelia G. Morris on Nov. 12 upheld a motion by the U.S. Trustee’s Office to deny bankruptcy relief for Reifler for failure to keep financial records and for making false oaths about his finances.
“I say I have produced everything I have to produce,” Reifler said in his statement opposing the trustee’s motion for summary judgment. “The U.S. trustee says that I failed to keep or preserve records, without stating what is missing and what missing records would show.”
Reifler, who lived on a 144-acre horse farm in Millbrook, Dutchess County, filed for Chapter 7 liquidation in January 2017. He declared $50.7 million in liabilities, including $23 million in federal taxes and $4.9 million in assets.
Reifler got his start as a financial adviser when he joined Refco Securities, a now defunct commodity trading business founded by his grandfather. He co-founded Pali Capital, a derivatives and fixed-income trading firm in 1995 and Forefront Management Group in 2009.
He shifted Forefront Management’s focus about five years ago from serving wealthy clients to less sophisticated – by Securities and Exchange Condition rules – middle-class investors.
He reportedly lived a lavish lifestyle and spent a decade and $8 million renovating Sky Blue Farm, a horse farm, including an ice hockey rink, tennis courts, riding ring, shooting range, motocross track and swimming pool.
In August 2017, regional U.S. Trustee William K. Harrington filed an adversarial proceeding asking the court to deny Reifler’s petition to discharge debts.
The trustee’s lawsuit is one of seven adversarial cases filed by creditors and the trustee challenging Reifler’s liquidation proceeding.
He had failed to disclose many businesses, trusts, bank accounts and lawsuits, attorney Alicia M. Leonhard, acting on behalf of Harrington, argued.
He had allegedly failed to keep records of millions of dollars of transfers between the entities he controlled and he had allegedly testified inconsistently about his finances.
His “inconsistent statements, selective memory and after-the-fact amendments of his schedules and statement of financial affairs demonstrate fraudulent intent or reckless disregard of the truth,” Leonhard stated.
Reifler countered that he had produced plenty of loan documents to the trustee.
“If they lost it, they could have asked again,” he said. “This is a simple issue and more of a discovery follow-up than bad faith.”
He said he had produced his only accounting records, bank statements, yet the trustee accused him of not preserving records.
“If the records never existed, then I could not fail to produce or maintain it,” he said.
Morris, in bankruptcy court in Poughkeepsie, rejected Reifler’s arguments at an Oct. 30 hearing.
“I am struggling to manage. At this point, a discharge is very important,” Reifler said in his motion to dismiss the trustee’s demand for summary judgment.
“I can barely afford counsel,” he said. “I have tried to cooperate and do the best I can under the circumstances.”