Ex-San Antonio attorney Christopher “Chris” Pettit, accused of stealing his clients’ money, spent more than $250,000 in the 40 days after he filed for bankruptcy.
The spending is detailed in court exhibits that are part of the Chapter 11 trustee’s motion seeking an order directing Pettit to show why he should not be held in contempt for withdrawing $125,000 from his retirement account after filing for bankruptcy June 1.
Pettit, 55, transferred the retirement money into checking and savings accounts at Martha’s Vineyard Bank in Massachusetts. The court exhibits show he spent just shy of $252,000 from those accounts from June 2 through July 11.
“It may be consistent with his pre-bankruptcy lifestyle,” said San Antonio attorney Martin Seidler, who represents creditors in the case.
Pettit listed $27.8 million in assets and $115.2 million in debts in his personal bankruptcy, one of the largest ever filed in San Antonio. His law firm also filed.
The trustee — the court-appointed private attorney overseeing the assets — has said the retirement money should not be touched until the court rules it’s exempt from the bankruptcy estate. Pettit has countered that it’s his because the account was funded by legitimate earnings under federal guidelines. A hearing on the motion was held last week. It’s scheduled to resume Wednesday.
Michael Colvard, Pettit’s bankruptcy lawyer, said during last week’s hearing that Pettit told him he had “$400 in his pocket.”
“He simply can’t be put on the street (and) not allowed to use his property,” Colvard told Chief U.S. Bankruptcy Judge Craig Gargotta. Colvard did not respond to a request for comment about Pettit’s spending.
The retirement money was spent “on a number of different things, none of which, I think, is authorized” or “appropriate under the (bankruptcy) code,” Patrick Huffstickler, a lawyer for the Chapter 11 trustee, said during the hearing.
‘Shocking’ expenditures
“The magnitude of their expenditures and what they’ve expended the funds on, frankly, will be, I believe, shocking to the court,” Huffstickler said to the judge without offering details.
Pettit spent a lot of the money in Florida, where he has been living since early June.
The largest expenditure was a $20,000 check to Winter Park National Bank, a Florida institution that last year loaned his Roble Dorado LLC $3 million for the purchase of a mansion in Golden Oak — part of Walt Disney World Resort and about four miles from the Magic Kingdom park. Roble Dorado is Spanish for Golden Oak.
The mansion, at 10285 Summer Meadow Way, is valued at $6.4 million in Pettit’s bankruptcy papers. Prior to the bankruptcy, it had been on the market with an $8.9 million asking price.
Pettit also wired $19,333 to Disney Destinations, a bank statement shows. Disney runs Summerhouse, a private clubhouse for Golden Oak residents, but it’s not clear if any of the money went to pay club fees.
He also is a member of Club 33, a private membership club at Disney that costs $18,000 a year. The bank statement showed two expenditures totaling about $87 to Club 33.
Pettit’s property is within the more exclusive Four Seasons Private Residences section of Golden Oak. He made four payments totaling more than $10,000 to Four Seasons.
He also made six ATM withdrawals of $200 each at the Four Seasons Resort Orlando at Disney World.
The statement also shows Pettit spent more than $10,500 with Universal Orlando Resort.
Former employees
He directed more than $17,600 in payments to 12 of his former law firm employees who went unpaid when he surrendered his law license and closed the offices. Among those paid was his recently deceased brother, Charles Pettit.
Two transfers totaling $9,000 went to two law firm clients.
Chapter 11 trustee Eric Terry’s court exhibits include screenshots of websites of businesses where purchases were made during the 40-day period.
They included online gaming sites such as Roblox, Steam and Epic, where more than a combined $1,000 was spent. Pettit has a 9-year-old son and cut two checks totaling $12,200 to an individual for child care.
Pettit spent more than $1,300 with the online luxury retailer Ifchic. There were 17 PayPal payments totaling more than $12,700 to “*ehrensru.” The purpose of those payments couldn’t be determined.
Alper Law, a Lake Mary, Fla., law firm specializing in “asset protection planning,” received $600. A $5,100 payment went to another law firm.
The trustee included a screenshot from Club Orlando, where there were two expenditures totaling almost $95. It’s described on the web as a gay sauna.
Pettit spent more than $1,700 with Amazon and nearly $1,500 with Apple.
There are not enough details in the bank statements to know precisely how Pettit spent much of the money. Huffstickler called some of the transactions “opaque.” Pettit, who is expected by the judge to attend Wednesday’s hearing, may be called to take the witness stand to answer questions about his spending.
The bank records show that Brent Barry, a former Spurs player who is now a team executive, wired $11,000 to Pettit. It may have been a rent payment on 555 Argyle Ave., the Alamo Heights house overlooking Olmos Dam that’s one of the area’s more recognizable residences. But Pettit didn’t list any lease contracts in his bankruptcy petition. The money from Barry was “pledged” to an unidentified party, according to a bank statement.
Approval required
Pettit can’t take any more of the retirement money without court approval. The judge issued an interim order allowing Pettit to have $3,500 to pay living expenses through Wednesday and another $5,000 to cover his brother’s funeral expenses. Pettit has to provide receipts for the funeral costs.
The judge’s order also says that if any of the money spent is found not to be exempt from the bankruptcy estate, the trustee may seek to recover the funds from Pettit.
Before he filed bankruptcy and shuttered his law offices, about a dozen lawsuits were filed against Pettit and the firm alleging they had absconded with client funds. One lawyer later estimated at least $50 million has gone missing. The FBI has been investigating.
Pettit handled estate planning and personal-injury cases, but also performed tax, trust and probate work.
On Monday, the judge approved the trustee’s motion establishing protocols for Pettit’s clients to get their files. They will have to submit a written request to the trustee. The trustee will have about three weeks to return the files once he receives notice, but Huffstickler said they will attempt to return them sooner.
