Some of the real estate Chris Pettit transferred before filing bankruptcy will be returned under deal

SAN ANTONIO — A judge this week approved a settlement involving numerous properties former San Antonio lawyer Christopher “Chris” Pettit transferred prior to filing for bankruptcy in June.

As part of the deal, seven properties he transferred to Sin Reposo LLC — including buildings formerly occupied by his now-defunct law firm — will be turned over to his bankruptcy estate. The Chapter 11 trustee overseeing assets in the bankruptcy simultaneously received court approval to retain a real estate broker to sell them.

“It makes abundant sense and reflects what I think will probably be a fairly significant return for the estate,” Chief U.S. Bankruptcy Judge Craig Gargotta said of the settlement during a court hearing Wednesday.

On ExpressNews.com: Judge issues surprise verdict against Graham Weston’s estranged wife after she calls no witnesses

“These monies, hopefully at some point in time, go back to the creditors in this case, which, of course, are the people that Mr. Pettit represented during the course of the operation of his law practice,” the judge said. “So every day there’s a delay is a delay to these individuals in receiving back some of their money that they entrusted to Mr. Pettit.”

Pettit’s law firm reported $13.8 million in assets and $112.8 million in liabilities in its latest bankruptcy schedules.

A building at 11923 Rustic Lane that former San Antonio attorney Christopher “Chris” Pettit used to give presentations to prospective clients is among the the properties being returned to the bankruptcy estate as part of a settlement agreement.

A building at 11923 Rustic Lane that former San Antonio attorney Christopher “Chris” Pettit used to give presentations to prospective clients is among the the properties being returned to the bankruptcy estate as part of a settlement agreement.

He filed bankruptcy for himself and his firm and gave up his law license amid allegations he pilfered tens of millions of dollars from his clients. He specialized in estate planning and personal-injury cases, but also provided financial advice and investment management services.

On ExpressNews.com: Ex-San Antonio lawyer Chris Pettit is sent to jail after being found in contempt for violating a judge’s order

Pettit has been in jail since Sept. 8, when Gargotta found him in contempt for violating a court order. Pettit, who attended Wednesday’s hearing by phone, did not oppose the settlement.

Pre-bankruptcy deals

According to the agreement, Pettit and related entities entered into a series of real estate transactions from January through April. Sin Reposo bought nine properties for almost $4.8 million including closing costs and fees. Sin Reposo said the transactions released almost $15 million of debt belonging to Pettit.

An apartment building at 488 Olmos Drive that former San Antonio attorney Christopher “Chris” Pettit agreed to sell is among the properties being returned to his bankruptcy estate as part of a settlement agreement.

An apartment building at 488 Olmos Drive that former San Antonio attorney Christopher “Chris” Pettit agreed to sell is among the properties being returned to his bankruptcy estate as part of a settlement agreement.

Pettit needed cash to pay Dr. Salvador Ortiz, a client who filed suit alleging Pettit had taken for his own benefit almost $11 million Ortiz turned over to fund an irrevocable trust. In March, Ortiz obtained a court judgment for almost $11.8 million, a figure that later topped $13 million with interest charges, against Pettit and his firm.

Ortiz received about $2.6 million from the various property sales by Pettit, the settlement shows.

Former San Antonio lawyer Christopher “Chris” Pettit entered into a series of real estate transactions ahead of filing for bankruptcy. A number of those transactions have essentially been undone as a result of a settlement agreement approved this week.

Former San Antonio lawyer Christopher “Chris” Pettit entered into a series of real estate transactions ahead of filing for bankruptcy. A number of those transactions have essentially been undone as a result of a settlement agreement approved this week.

Jerry Lara, San Antonio Express-News / Staff photographer

Eric Terry, the Chapter 11 trustee, asserted he may essentially undo the transactions with Sin Reposo because Pettit and the related entities entered them with the “actual intent to hinder, delay or defraud creditors.” The power to “avoid the transactions” prevents pre-bankruptcy payments to one creditor at the expense of other creditors.

On ExpressNews.com: Ex-San Antonio lawyer Chris Pettit sold multiple properties to same buyer before massive bankruptcy

Among the properties Pettit transferred to Sin Reposo were:

• 11902 Rustic Lane, San Antonio. It’s the building that housed Pettit’s main law office and has been valued at $650,000.

• 11923 Rustic Lane. Pettit used the building to make presentations to prospective clients. It’s been valued at $700,000.

• A single-family home in the 15700 block of Deer Crest, San Antonio, where Pettit’s brother, Charles Joseph Pettit, was found dead in July. Police believe he committed suicide. The property has been valued at $386,000.

• A small apartment building at 488 Olmos Drive in Olmos Park valued at about $800,000.

• A Canyon Lake lakefront home valued at $865,000.

• A Port Aransas beachfront condo unit valued at $720,000.

Not all of the transactions can be undone, however. Sin Reposo subsequently sold two residential properties — one on Contour Drive and the other on Alameda Drive in Olmos Park — for a combined $4.3 million.

On ExpressNews.com: Did former San Antonio lawyer Chris Pettit’s legal woes kill the sale of a King William house?

Sin Reposo also entered into a contract to purchase the property at 555 Argyle Ave. overlooking Olmos Dam in Alamo Heights for about $2 million. That agreement will be terminated as part of the settlement.

Former San Antonio attorney Christopher “Chris” Pettit had entered into a contract to sell the property at 555 Argyle Ave. overlooking Olmos Dam in Alamo Heights to Sin Reposo for about $2 million. That contract will be terminated under a settlement agreement.

Former San Antonio attorney Christopher “Chris” Pettit had entered into a contract to sell the property at 555 Argyle Ave. overlooking Olmos Dam in Alamo Heights to Sin Reposo for about $2 million. That contract will be terminated under a settlement agreement.

Sin Reposo valued the properties at $13 million, the settlement agreement shows.

About Sin Reposo

Its sole manager and member is Garrett Glass, a San Antonio developer who has been serving as chief financial officer of EF EnergyFunders Inc., an oil and gas investment company that’s based in Calgary but maintains its executive offices in San Antonio. He was appointed to the post in March.

Pettit had served on EnergyFunders’ board but resigned in May after news broke that he had been sued by clients. Pettit and Glass met in January, Glass testified Wednesday.

“Sin Reposo is very sensitive to the damages caused by Mr. Pettit’s actions and is very disappointed that someone in our community would be involved in such alleged transgressions,” Christopher Adams, a lawyer for the company, said in a Sept. 7 email. “Sin Reposo had no part in any of those alleged transgressions and believes that it too was misled by Mr. Pettit.”

SA Inc.: Get the best of business news sent directly to your inbox

Adams couldn’t immediately be reached Friday.

Sin Reposo disputed any liability to the bankruptcy estates. It believes that it only bought two of the properties — 488 Olmos Drive and the Contour Drive property — and that the other transactions were not “true sales” because Pettit and related entities had the opportunity to repurchase them.

It also believes the transactions were arm’s length and Pettit and his entities received “substantially more in value for the properties than the consideration they transferred to Sin Reposo,” the settlement says.

Sin Reposo holds a secured claim for about $740,000, which represents the purchase price and costs for all nine properties minus the proceeds it received from the two properties it sold and a $275,000 “litigation adjustment.”

[email protected]

https://www.expressnews.com/business/article/Petit-bankruptcy-san-antonio-lawyer-17462593.php