Federal judge rules case against Valpo businessman may proceed
By Teresa Auch Schultz email@example.com March 31, 2014 6:32PM
Johnny Mathis Jr. is shown in the Livemercial offices. | Sun-Times Media file
Updated: May 2, 2014 6:21AM
A complaint claiming a Valparaiso businessman improperly moved almost $1 million in order to hide it from his creditors will move forward after a federal bankruptcy denied a motion to dismiss the case.
U.S. Bankruptcy Judge J. Philip Klingeberger ruled Wednesday that the complaint, filed in August 2012 by U.S. Bankruptcy Trustee Daniel Freeland, was not filed too late and that the case against Johnny Mathis Jr. and his company CPA Warehouse will proceed.
George Galanos, Mathis’ attorney, could not be reached for comment.
The complaint stems from a bankruptcy case filed in 2010 for one of Mathis’ other companies, Livemercial Aviation, which was created to renovate small jets into personal luxury aircraft. The company never could sell the first plane it bought, however, and fell behind in its debt.
The bulk of the debt was resolved when the bank that had loaned Mathis’s company $6.3 million to buy the plane repossessed it. However, other creditors still were owed $1.6 million.
Freeland questioned a transfer of $990,000 that Livemercial Aviation made to CPA Warehouse shortly before the bankruptcy case was filed.
“The transfer was made with the actual intent to hinder, delay or defraud an entity to which the debtor was or became indebted,” the filing says.
It also says the transfer made Livemercial Aviation insolvent and that CPA Warehouse never gave any service of value in exchange for the money.
Mathis, of LaCrosse, answered with his motion to dismiss, arguing that Freeland had missed by one day the filing deadline of one year after he became trustee of the case.
However, Klingeberger agreed in his ruling with Freeland that he did not officially become trustee until later in 2012.
Mathis is best known for his company Livemercial, which made online video ads. It was unclear if the company still exists, however. It defaulted on its rent in 2011, and the company’s website is inactive. However, Mathis continues to refer to himself as CEO of the company.