Bankruptcy experts say creditors, including Pittsburgh and Allegheny County, are unlikely to receive any reimbursement for services from a former Three Rivers Regatta promoter who has filed to liquidate his company.
LionHeart Event Group last week filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court, contending it has between $500,000 and $1 million in estimated liabilities, but less than $50,000 in assets.
Regatta officials in July canceled the event, scheduled for the first weekend of August. They said that LionHeart owner Derick Weber misled the regatta’s board and the city about payments, insurance and other details. It was the first time the regatta had been cancelled since 1978.
“Chapter 7 rarely pays off the creditors,” said Bob Bernstein, a Downtown Pittsburgh attorney specializing in bankruptcy. “It’s just never happens unless there’s some asset that the trustee recovers and there a pot (of money) there.”
Brian C. Thompson, Weber’s bankruptcy attorney, declined comment.
Bernstein said more information would be available regarding LionHeart’s specific assets and debts later this month when the company must file that information with the court.
The Allegheny County Sheriff’s Office has sued LionHeart, claiming the company owes nearly $33,000 for security services it provided during the 2018 regatta and the July 4 EQT Flashes of Freedom Celebrate America fireworks.
LionHeart owes the city around $28,000 for police services during previous regattas, according to Mayor Bill Peduto. Peduto has said he thinks LionHeart also owes a “long line” of regatta vendors “well into the six figures.” City police have launched an investigation into the company, but no charges have been filed.
“I saw that the assets were listed at one-tenth of the potential costs, so I would assume that the recovery would be somewhere around that, but I’m also very cognizant that in bankruptcy court many times government gets placed at the bottom,” the mayor said Wednesday.
Bankruptcy attorneys said the court will appoint a trustee to oversee the bankruptcy proceeding. The trustee will liquidate LionHeart’s assets and little will be left after paying bankruptcy filing expenses, including attorney fees.
“My experience is nobody gets paid in Chapter 7, or rarely does anybody get paid,” said Downtown attorney David K. Rudov.