McMahon says she will pay bankruptcy creditors
McMahon says she will pay bankruptcy creditors
Thursday, September 20, 2012
The U.S. Senate campaign of Republican Linda McMahon moved swiftly Thursday to neutralize her 1976 bankruptcy as a campaign issue, announcing she and her husband, Vince McMahon, will voluntarily repay all private individual creditors.
McMahon's action comes two days after details of her discharged debts were first made public by The Day and seven hours after the campaign of Democrat Chris Murphy challenged her to "come clean" about which creditors were "stiffed."
"Over the past two days, Vince and I have begun attempts to locate and reach out to all individuals on the creditor list," McMahon said in a statement. "It is our intention to reimburse all private individual creditors that can be located."
The gesture appears aimed at denying Murphy an issue he'd hoped would put McMahon on the defensive as he struggles with questions about his own personal finances. A Murphy spokesman said, "The timing of her newfound goodwill reeks of political expediency."
McMahon said she and her husband, who emerged from bankruptcy to become independently wealthy as the co-founders of World Wrestling Entertainment, will pay four times the original debt as an adjustment for inflation.
Her campaign declined to give further details, but it appears from bankruptcy records that the McMahons may be paying five individuals a total of $150,504 to settle an original debt of $37,626.
In 1976, 26 creditors filed claims in U.S. Bankruptcy Court in Hartford saying that the McMahons owed them $955,805, the equivalent of $3.9 million in 2012 dollars.
Mattatuck Bank & Trust of Waterbury was the biggest creditor, claiming $364,492, followed by Harold J. Hemingway of Burlington ($109,575) and the IRS ($100,064.) As a secured creditor, Hemingway likely was paid.
The other individuals included Anne C. Pease, William C. Lanam and Pamela P. Lanam, who jointly claimed they were owed $33,171, meaning they are due $132,684.
John F. Papandrea of Meriden claimed $355, now worth $1,420.
Gerard E. Langeler claimed $4,100. Hearst News found Langeler, a former ad man, on Wednesday. He is 96, living in New Hampshire and had long given up on on the debt. He can expect a check for $16,400.
McMahon had long insisted that she had few records of the bankruptcy, but The Day reported two days ago it had located a creditors' list in a federal archive and its reporter, J.C. Reindl, shared it with McMahon.
"It was the first time I had seen the list since the bankruptcy proceedings," she said. "We thank Mr. Reindl for this discovery."
Ben Marter, a spokesman for Murphy, suggested McMahon was being disingenuous.
"The McMahons had the ability to pay these debts a long time ago," he said. "It's a shame that it took 36 years and mounting political pressure for Linda McMahon to finally pay some, but apparently not all, of her debts."
McMahon made clear her intention to return to the personal narrative around which her campaign is built: She and her husband struggled like many Americans, then recovered and became a success. The McMahons reported income of $30.6 million in 2010 and $24.1 milion in 2011.
"One of the reasons I am running for the Senate is because I know what it's like to struggle. Many people in today's economy are facing hard times just like Vince and I did back in the 1970s. I've been there, I've shared those peoples' struggles, and I've walked in their shoes," she said.
"But I also know that things can change, and if given the opportunity, people can come back stronger than before. That's what the American Dream is all about. I know because I've lived it," she said.
Murphy has been unwilling or unable to move as quickly to resolve questions about a series of missed payments on rent, mortgage and taxes that resulted in two lawsuits and a tax lien on his house.
All three debts were paid, but they have contributed to an image the McMahon campaign is aggressively pushing of Murphy as irresponsible or worse, saying a home-equity loan he subsequently obtained from Webster Bank had to be improper.
Webster has defended the 4.99 percent home-equity loan, saying Murphy and his wife, Cathy, met underwriting standards. The bank said that the interest rate was a full percentage point above its best advertised, a reflection of Murphy's credit problems.
In an interview before McMahon's announcement, Murphy said he had no intention of releasing his loan application or credit report to rebut McMahon's claims that he and wife were the recipients of a "sweetheart deal."
"I think this issuse is closed. Webster Bank has been as detailed and clear as they can in their response to reporters' questions," Murphy said. "Obviously, that still won't stop Linda McMahon from taking the low road."
Murphy again called the missed payments inadvertent, but he did not say how many payments were missed before Chase Home Financial began foreclosure proceedings in 2007, shortly after he became a congressman.
"This was a crazy period in our lives. I was being sworn into office and traveling back and forth to Washington," he said. "We inadvertently missed the payments. As soon as we found out about the mistake, we took steps to fix it."
Murphy said he recalled no warning phone calls from the bank.
"We may have got letters that were subject to the same problem, right? Which was we each believed the other was paying the bill. So, it wasn't until we got notice of foreclosure that we realized we made a mistake."