The Valdez Star - Serving Prince William Sound and Copper River Basin

 
 

By Lee Revis
Editor, Valdez Star 

Update: M/V Janice Ruth II sinks in its berth

Officials say sinking is a under investigation

 

Valdez Star photo

The M/V Janise Ruth, owned by the Martha Reynolds Trust, was arrested by US Marshals last summer. Larry Reynolds, a member of the trust, was accused by police and marshals of removing the arrest notice and other gear aboard the vessel. A legal notice says the vessel will be sold at auction on the steps of the Federal Court in Anchorage later in December.

The M/V Janice Ruth II sank in its berth Wednesday night, just days after a legal notice was published to announce its owner, the Independent Bank of Texas, was to auction to 47 foot luxury fishing boat on the steps of the Federal Court in Anchorage on December 15.

The US Coast Guard stated the incident was under investigation.

The boat had been the centerpiece of a complex legal dispute between its former owner, the Martha Reynolds Trust, Larry and Janice Reynolds of Valdez who controlled the trust, the Independent Bank of Texas, the US Marshals and the Federal Bankruptcy Court in Anchorage.

“…notice is hereby given that the United States Marshal will sell the vessel M/V JANICE RUTH II at public auction inside the Seventh Avenue Entrance of the United States Courthouse, 222 West Seventh Avenue, Anchorage, Alaska, at 10:00 a.m. on December 15, 2011,” said a legal notice published by the US Marshals in the Anchorage Daily News November 23.

The Martha Reynolds Trust (MRT) is a financial instrument ostensibly created to benefit Martha Reynolds – mother of bankrupt businessman Larry Reynolds. Janise Reynolds, Larry Reynolds’ wife, was its trustee.

The MRT came under intense court scrutiny before the Federal bankruptcy court in Anchorage twice dismissed separate bankruptcy claims filed on its behalf by the Larry - and then Janise - Reynolds.

The court dismissed the MRT bankruptcy filing after it was revealed the trust had declared itself to be a non-business trust without assets during numerous court proceedings in the North Texas Bankruptcy Court regarding the personal bankruptcy of Larry Reynolds and before that the bankruptcy of Reynolds Alaska, a corporation controlled by Reynolds with holdings in Valdez.

Before the bankruptcy filings, the vessel had been arrested by the US Marshals after the Independent Bank of Texas secured a court order for its seizure to repay an outstanding debt of $745,000.

The move comes after a summer of convoluted legal maneuverings by Larry Reynolds involving both personal and professional bankruptcy filings. An unenforced warrant for Reynolds’ arrest was issued by the bankruptcy court in North Texas after Dan Lain, the trustee for Reynolds’ personal bankruptcy, complained that Reynolds had had lied in filing bankruptcy schedules, hid assets from the bankruptcy trust, sold mineral rights to properties owned by the bankruptcy trust without reporting the profits to the trustee, withdrew money from the bankruptcy trust accounts without authorization and then failed to return the money despite a court order to do so.

On November 22, the North Texas bankruptcy court issued a final judgment against Reynolds for nearly $250,000 for repayment of monies he illegally obtained from the bankruptcy estate and hefty legal fees incurred by the trustee.

The US Marshals are preparing to auction off the M/V Janise Ruth II, a luxury vessel it seized as an asset of the Martha Reynolds Trust after failed attempts by Valdez business owners Larry and Janice Reynolds to declare the trust bankrupt and its assets exempt from seizure.

“…notice is hereby given that the United States Marshal will sell the vessel M/V JANICE RUTH II at public auction inside the Seventh Avenue Entrance of the United States Courthouse, 222 West Seventh Avenue, Anchorage, Alaska, at 10:00 a.m. on December 15, 2011,” said a legal notice published by the US Marshals in the Anchorage Daily News November 23.

The Martha Reynolds Trust (MRT) is a financial instrument ostensibly created to benefit Martha Reynolds – mother of bankrupt businessman Larry Reynolds. Janise Reynolds, Larry Reynolds’ wife, was its trustee.

The MRT came under intense court scrutiny before the Federal bankruptcy court in Anchorage twice dismissed separate bankruptcy claims filed on its behalf by Larry - and then Janise - Reynolds.

Before the bankruptcy filings, the vessel had been arrested by the US Marshals after the Independent Bank of Texas secured a court order for its seizure to repay an outstanding debt of $745,000.

“Persons may inspect the defendant vessel at their own risk in Valdez, Alaska, with permission of the appointed Substitute Custodian,” the Marshals said. “ Interested persons are referred to Steven J. Shamburek …by calling (907) 522-5339 for further information concerning the vessel.”

Valdez Star photo

The M/V Janice Ruth last September at the small boat harbor in Valdez.

The move comes after a summer of convoluted legal maneuverings by Larry Reynolds involving both personal and professional bankruptcy filings. An unenforced warrant for Reynolds’ arrest was issued by the bankruptcy court in North Texas after Dan Lain, the trustee for Reynolds’ personal bankruptcy, complained that Reynolds had had lied in filing bankruptcy schedules, hid assets from the bankruptcy trust, sold mineral rights to properties owned by the bankruptcy trust without reporting the profits to the trustee, withdrew money from the bankruptcy trust accounts without authorization and then failed to return the money despite a court order to do so.

On November 22, the North Texas bankruptcy court issued a final judgment against Reynolds for nearly $250,000 for repayment of monies he illegally obtained from the bankruptcy estate and hefty legal fees incurred by the trustee.

 

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