Chesrown files $72 million bankruptcy
Former developer saw his billion-dollar plans crushed under the 2008 economic collapse
Marshall Chesrown, who became the face of posh housing and gated golf course developments in the region but struggled as the economy soured, has filed a $72 million personal bankruptcy to complete the stunning collapse of his fortunes.
Chesrown listed his net worth at $514,173 – a tiny sum compared to his billion-dollar aspirations that once included the Black Rock luxury golf club along Lake Coeur d’Alene, Kendall Yards near downtown Spokane, and Legacy Ridge in Liberty Lake. He now lives in Delray Beach, Fla., where he shares a modest condo with a woman and works as an automotive consultant.
His assets include $500,000 of equity in a $1 million Legacy Ridge mansion still in his name, along with $9,500 in a retirement fund; $450 cash in pocket; $580 in two bank accounts; and several thousand dollars in furnishings and personal items. The bankruptcy will unfold in a South Florida federal court.
A 177-page report lists 430 creditors ranging from banks to business associates, small-business vendors to tax collectors.
Several at the top of the list stand to recoup at least a share of their money, including two local banks, Idaho Independent Bank and Washington Trust Bank, along with some of Chesrown’s former business connections from his successful past running automotive dealerships.
Chesrown, who grew up in Spokane and graduated from University High School, made his money selling cars and owning and selling dealerships that included a business association with former Denver Broncos quarterback John Elway.
In 1999 he made a big local splash when he announced plans to build The Club at Black Rock, a luxury golf community overlooking Rockford Bay on Lake Coeur d’Alene.
The concept caught fire during the following decade as other developers stepped up efforts to remake some of North Idaho’s most scenic land into second-home playgrounds for the rich.
Chesrown then bought what became Kendall Yards near the heart of Spokane along the north bank of the Spokane River and unveiled plans for a major project to remake the land from abandoned railyard into an urban living development full of people and businesses.
His plans and projects were foiled by the housing bust and economic collapse of 2008. Within three years, he had either lost most of his projects to foreclosure or sold them. He has been named in at least 16 lawsuits and other legal actions in the past several years.
His advisers and lawyers described Chesrown as a businessman who did everything possible to protect his investors and pay his bills. He lost millions of his own dollars sunk into the Black Rock project, one of his lawyers said when Chesrown lost control of it.
Government might get money from past due taxes from the bankruptcy, but local businesses that helped build Chesrown’s projects and provided professional services will likely have their invoices left unpaid.
Those companies include A to Z rental, Post Falls Ace Hardware, Arrow Construction of Spokane. Some are owed big money: Chesrown owes Avista Utilities $397,000; ACI Northwest in Coeur d’Alene $1.4 million; and Wadsworth Golf Construction Co. of Arizona $1.8 million, according to the bankruptcy filing.
Individual investors may have their claims zeroed out, too, as Chesrown’s case proceeds through bankruptcy court.
In court documents, Chesrown disclosed that he earns about $13,500 a month – not enough to meet his monthly expenses of $24,131 that include a $4,000 monthly lease payment for a Mercedes and two mortgages that together exceed $8,600.
And Chesrown is not immune from the problems plaguing many people: In 2011, a prowler broke into his car and stole computers, an iPad, his wallet, passport and a watch, according to court records. He also lost $30,000 gambling.
Chesrown is due to answer questions from his creditors and a federal bankruptcy trustee in court Monday in West Palm Beach, Fla.