Two Spokane doctors have settled their $191 million bankruptcy, but Drs. Debra and Sajid Ravasia may lose their home in the process.
U.S. Bankruptcy Judge Frederick Corbit recently signed off on the agreement to settle the Chapter 7 bankruptcy under the terms that they pay $175,000 from a deferred compensation account or by coming up with $130,000 in cash.
The Ravasias filed for bankruptcy in January based on the failed companies run by Debra Ravasia, a gynecologist who, up until last year, was the owner and executive director of the Northwest Health Summit and Ajuva Spa.
The bankruptcy filing generated scores of complaints from former clients who questioned the billing practices of her businesses.
Sajid Ravasia is a psychiatrist at Providence Sacred Heart Medical Center.
After the bankruptcy filing, the bankruptcy trustee John Munding began reviewing thousands of pages of documents. In June, he asked the judge to deny the bankruptcy petition after discovering significant funds the couple failed to disclose as part of their required disclosure forms.
Among those findings, Munding learned that the Ravasias withdrew about $14,485 from bank accounts just days before filing bankruptcy; they paid about $46,000 on several credit cards that weren’t disclosed; and they failed to account for $494,500 worth of personal property.
“The defendants have been unable to produce any documents evidencing the disposition of such property or the difference in stated values between the financial statement prepared by their certified public accountant and that which is set for in their schedules,” Munding wrote in court records.
In addition to asserting that the Ravasias lied under oath about their finances, Munding accused the couple of shielding ownership of a ski condominium in Rossland, B.C., by signing it over to Debra Ravasia’s father, Ed Truelove.
Munding noted that Truelove agreed to pay $1 to assume the unpaid portion of the loan, which he listed as $236,274. However, Munding discovered that Debra and Sajid Ravasia continued to pay the mortgage, utilities and association dues, not Truelove, and they maintained its use as their vacation home.
The Ravasias “kept much, if not most, of their tangible personal property at the ski condo, and concealed or permitted to be concealed their secret interest therein, in order to hinder, delay, or defraud creditors,” Munding wrote.
Despite those allegations, Munding proposed a settlement this summer.
As part of the motion to settle the case, Munding wrote that he would agree not to pursue the “fraudulent transfer and strong arm avoidance claims” and he would not challenge the transfer of the ski condo to Truelove.
“After months of informal and formal discussions, hours of review of discovery documents produced in this matter, in conjunction with legal research and expert consultation, as well as arm’s length negotiations in good faith, the Chapter 7 trustee and debtors have reached a settlement,” Munding wrote.
Neither the Ravasia’s attorney, Dan O’Rourke, nor Munding immediately returned calls Wednesday seeking comment.
Munding noted in a court filing last month that the bankruptcy inflated the amount of money the Ravasia’s owed. Their attorney, O’Rourke, earlier indicated that his clients came to the $191 million figure by applying a dollar figure to more than 8,000 former clients.
“Instead of having to fund a stated $191,000,000 in creditor claims, the reality is the creditor’s claims estimated to be paid is actually closer to $153,619,” Munding wrote. “The total number of creditors is not 952, but instead less than 20.”
Despite the pending agreement, the Ravasias owed Wells Fargo some $445,789 for the remaining mortgage and late fees on their home. Umpqua Bank also has liens on the property, located at 3626 W. Center Lane, for a total of $404,984, according to court records.
Since the combined amount owed far outweighs the home’s $650,000 appraised value, the banks asked the judge to intervene.
Judge Corbit on Sept. 13 approved a request by Umpqua Bank to remove the property from the bankruptcy estate. It’s not clear through court records if Umpqua has started efforts to foreclose on the home.
Efforts to reach the Ravasias on Wednesday were unsuccessful.
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