Poor, Bankrupt Bradley

Will the federal government take pity on a guy who owes $77.5 million in unpaid loans and taxes? Gary Bradley hopes so. The flamboyant developer, who rose to local fame during the frenzied Eighties boom and bust, would like to see those debts wiped out as part of his Chapter 7 bankruptcy proceeding. Bradley appeared in U.S. Bankruptcy Court on Aug. 16 to respond to a handful of creditors who hope to squeeze what they can from his remaining assets. But his filings paint a picture of slim pickings: a Lake Austin condo, three life insurance policies, and various furnishings and collectibles, totaling just under $500,000. Much of his property -- his $350,000 homestead, for instance -- is protected by law and will likely remain in his control.

"It went pretty much as anticipated," Bradley said after the two-hour meeting. His biggest concern, he added, is the $4 million he owes the IRS and the more than $73 million owed the Federal Deposit Insurance Corp., which is trying to collect on unpaid loans secured nearly 20 years ago from the failed Gibraltar Savings Association. "If this is a successful bankruptcy, then those debts will be discharged," he said. In the mid-Eighties, Bradley and his partner, James Gressett, obtained several loans to build the Circle C Ranch development in Southwest Austin. The two defaulted on their payments and Gressett filed for bankruptcy, although banking officials didn't overlook his share of the liability. Fraud claims were brought against Gressett, alleging that he and Bradley both made "fraudulent omissions" and false statements in order to secure the loans. Gressett eventually settled.

Whether the FDIC will pursue similar fraud claims against Bradley remains uncertain. Creditors will have a couple of months to continue investigating Bradley's financial situation before deciding whether to file objections to Bradley walking on all or part of a $100 million debt.

Bradley underwent the longest round of questioning from attorney Joseph Martinec, who represents Bradley's ex-wife, Lisa Burford Bradley, and their son. Bradley owes an estimated $20,000 in back child support payments, and seeks a reduction in the $4,800 monthly payments he says he can no longer afford. Martinec led Bradley through a series of questions concerning his association with a vast number of past and current corporations, trusts, and other entities that he's been affiliated with at one time or another, and seemed particularly interested in the transfer of various assets from one entity to another. Asked what factors precipitated his decision to file for bankruptcy, Bradley named three things: His ex-wife pursued child support claims against him, a complex development deal collapsed, and Congressman Lloyd Doggett injected himself into Bradley's FDIC case.

Bradley blamed the Save Our Springs Alliance for pressuring Doggett to step into the FDIC fray, which the developer said disrupted what had been a "good working relationship" with the agency. On April 15 -- tax day -- SOS sent a letter to Austin's U.S. Representative asking his assistance in forcing Bradley to pay his debt to the government. Doggett looked into it, and, as Bradley sees it, that intervention ruined his chances of squaring things with federal regulators. "At that time I thought the avenue was closed as far as reaching any sort of compromise," Bradley said. He filed for bankruptcy in July. "I didn't give up," he explained of his decision to file. "It was going to help keep me alive, in financial terms."

Despite Bradley's claims of financial hardship, the developer's lifestyle hardly reflects a hand-to-mouth existence. He told creditors that he makes $12,000 a month as a real estate consultant for Castle Hill Management Services, a company he says is owned by a cousin, Brad Beutel. Bradley's bankruptcy records also show lavish spending habits, mostly on his fiancée's behalf. His generosity also extends to politics: He gave $5,000 each to the campaigns of two Republican contenders, Gov. Rick Perry and state attorney general candidate Greg Abbott (the latter running against former Austin mayor Kirk Watson). Bradley also gave $1,000 to the Texas Partnership PAC, a big Democratic contributor.

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