March 15, 1995 in Nation/World

Denver Bankruptcy Judge Sends Van Camp Packing

By The Spokesman-Review

The controversial Spokane lawyer planning to sue a hospital over the Baby Ryan case is seeking personal bankruptcy protection.

Ten days before Ryan Nguyen was born, Russell Van Camp was in Denver filing for Chapter 11 reorganization.

Van Camp told the court he had an office in downtown Denver and wanted to reorganize debts totaling at least $210,000 to the Internal Revenue Service.

His Denver office was only a mailbox though, and a federal judge last week transferred the case to Spokane.

Judge Roland Brumbaugh left Van Camp with a warning: His bankruptcy filing might constitute fraud.

Van Camp, the self-described “King of Torts,” represents Nghia and Darla Nguyen, a Spokane couple who recently moved to Vancouver, Wash.

They retained Van Camp on Nov. 22 to keep their baby on lifesaving kidney dialysis in a case that has raised national concerns about medical and legal ethics.

Van Camp is days away from suing Sacred Heart Medical Center for “significant damages,” alleging Baby Ryan’s birth was botched and the hospital wanted to end treatment because it was losing money.

Hospital officials have contended on several occasions that Van Camp only took the case because of the potential for a big payoff from a large corporation.

Interviewed at his Broadway Avenue office Tuesday, Van Camp said there is no connection between the Baby Ryan case and his IRS debts.

“I am not in bankruptcy. I am reorganizing,” he said in a spacious office lined with newspaper clippings and knickknacks. One, a humorous figurine, has a caption that reads: “It’s not whether you win or lose, it’s how much money you make.”

Saying he ran a Denver office and wanted to be closer to the IRS agents trying to collect his debt, Van Camp, 48, filed for protection from his creditors on Oct. 17.

Ten days later, an attorney for the U.S. Trustee’s Office in Denver asked Judge Brumbaugh to dismiss Van Camp’s bankruptcy case for lack of merit.

The Trustee’s Office acts as a referee to ensure bankruptcy procedures are followed and that financial statements submitted by debtors are accurate.

In a Feb. 28 hearing, at which Van Camp represented himself, government attorney William Van Horn dropped his motion for dismissal and said the IRS wanted the case moved to Spokane.

The IRS wanted to keep an eye on Van Camp, the government lawyer said.

“This case obviously does not belong in Colorado,” the judge agreed in transcripts made part of the court record. “He has no connection with this state other than his parents live here and he has a mailbox in downtown Denver.”

Van Camp said Tuesday that the Denver bankruptcy court has jurisdiction over Utah, where the IRS’ collection office in Ogden is pressuring him for debt repayment.

The government’s attorney said Tuesday, however, that the Denver bankruptcy office has nothing to do with Utah.

When he applied for bankruptcy protection in Denver, Van Camp indicated he had a Denver office for the six-month minimum required by law. He also claimed he had only one creditor, the IRS.

But Van Camp confirmed in testimony Feb. 28 that his Denver law office actually was a storefront for Mail Boxes, Et Cetera. He also admitted owing Seafirst Bank $35,000 for the remaining mortgage on his Spokane office.

“(He’s) not licensed to practice law here,” the judge said during the hearing. “The only reason I can think of, and I’m not making this a finding, is that it was somehow to avoid creditors, to make it extremely inconvenient for his creditors.

“And I’m going to tell you Mr. Van Camp, I think you’re very lucky that this is being transferred,” the judge said. “Otherwise, because of what I’ve heard today, I think I might have been required to send this to the U.S. attorney for bankruptcy fraud.”

Van Camp called the judge’s actions “ridiculous” and said most judges and lawyers have it in for him because he’s a “Johnnie Cochrantype of plaintiff’s attorney.”

During the Feb. 28 hearing, the government lawyer uncovered many inconsistencies in Van Camp’s written claims to the court:

Instead of paying $1,500 a month for life insurance, the premium was $250, Van Camp admitted. During an interview Tuesday, Van Camp stuck with the $1,500 figure, saying the policy is for $500,000.

Van Camp claimed only one residence, a $165,000 home on Glass Avenue overlooking Monroe Street. He denied owning a $40,000 home on Spokane’s Euclid Avenue, even though he is listed as the owner in Spokane County tax records. Van Camp said he gave the home to his former sister-in-law 10 years ago.

In a December interview with The Spokesman-Review, Van Camp said he earns “hundreds of thousands of dollars” each year, drives a Lincoln Mark VIII and wears a 5-carat diamond ring. In testimony before the bankruptcy judge, Van Camp denied having a 5-carat ring, said he drove a 1960 Cadillac and earned $90,000 a year after taxes.

On Tuesday, Van Camp’s Mark VIII was in his law office parking lot. The ring, he said, is only 4 carats.

During overlapping fits of laughter and crying, Van Camp said the only reason he filed for Chapter 11 protection is to force the IRS to tell him exactly what he owes from a 10-year fight with the agency.

IRS collectors have told him different amounts, ranging from $80,000 to $450,000, he said.

“This is not a bankruptcy,” he said. “I am not trying to get out of my debts. I have an argument with the Internal Revenue Service, and this is one weapon, the only weapon, that any citizen has.”

xxxx Chapter 11 Russell Van Camp took the unusual step of filing for personal bankruptcy protection under Chapter 11, instead of the more common Chapter 7, federal officials say. Chapter 11 is the code designed primarily for businesses, and its “provisions are quite complicated,” according to U.S. Bankruptcy Court. Although it doesn’t relieve debts, Chapter 11 can get them reduced. Such a filing also can buy time for the person and permit him to make installment payments instead of one lump sum. Reorganizations under Chapter 11 must be approved by creditors - in Van Camp’s case, Seafirst Bank and the Internal Revenue Service - with a judge’s approval. The debtor normally remains in control of his assets, unlike in Chapter 7 cases. Chapter 7 is a liquidation code where a federal trustee collects and sells any assets and disburses them to creditors. But in most Chapter 7 filings there are no assets. The debtor is relieved of all financial obligations, and creditors generally don’t collect a dime. - J. Todd Foster

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