ALDRIDGES: Lawsuit on hold until bankruptcy court lifts stay

By Patsy R. Brumfield / Daily Journal

2:15 – Judge instructs Florence Aldridge’s attorneys to ask bankruptcy court to lift automatic stay for Louis/Janice so Malski can hear full lawsuit against them.

He says it’s better to wait. Promises to make it a priority and hear as soon as possible.

• • •

1:54 P.M. – Attorneys meet with judge in chambers on how to proceed with lawsuit.

• • •

1:18 P.M. – Judge Malski announces Louis and Janice Aldridge have filed bankruptcy under Chapter 7. He asks counsel to discuss with clients the situation.

He says at issue is judicial economy – whether to proceed against Brian Aldridge and Touched by an Angel Ministries, with the possibility of having to come back against Louis and Janice several weeks later.

Attorneys are speaking with clients. Malski will speak with them in chambers shortly.

Plaintiff’s attorney Frank Russell serves subpoenas on Louis and Janice, who now are in the courtroom.

Judge says they filed for bankruptcy at 12:43 p.m. in federal bankruptcy court.

• • •

11:45 UPDATE:

TUPELO – Florence Aldridge’s damages lawsuit against three other family members began this morning in Lee County Chancery Court.

The elderly Mrs. Aldridge claims extensive assets were improperly used by her brother-in-law, Louis Aldridge of Tupelo, to whom she gave her power of attorney rights in 2003 when she became ill.

Today, her attorneys seek to convince Chancellor Mike Malski that she is owed a full accounting of what happened to her assets – money, her home, jewelry, life insurance proceeds and other things. She also wants punitive damages and attorneys’ fees.

The defendants, including Louis’ wife, Janice, and their son, Rep. Brian Aldridge, insist they did nothing improper. Among Florence Aldridge’s allegations is that Touched by an Angel Ministries Inc. of Tupelo was given $250,000 from her accounts, and that gift and other spending did not reflect her best interests.

(Below is a running account of today’s court action, also set to resume Thursday in the Lee County Justice Center. Please forgive the likely typos and other glitches that arise from typing this as it happens. Updates will be posted on top of earlier reports.)

Attorneys Rhett and Frank Russell for plaintiff. T.K. Moffatt, Tim Hudson for defendants.

• • •

10:35 – Malski returns to the courtroom. Rhett Russell tells him plaintiff’s exhibits have been pre-marked. All attorneys and Rep. Aldridge take a look at what’s been prepared.

Aldridge’s father, Louis, and mother, Janice, are not in courtroom yet.

Looks like Russells have variety of documents from Secretary of State’s website, probably from business formations and/or charities reports. Also tax returns, IRS correspondence, credit report (Rhett Russell says it will show how Florence Aldridge’s “credit was ruined.”)

10:48 – JUDGE begins. Hudson reps Louis and Janice. Moffett reps Brian and Touched by an Angel Ministries. Judge asks about an earlier filing for the charity, which was used by the defendants although it was officially dissolved by the Secretary of State’s office.

MOFETT – We don’t admit to the accuracy of their exhibits, unless supporting information backs them up.

JUDGE – All potential witnesses, except defendants, and plaintiff – you need to be excluded from the courtroom at this time. (No one moved from seats.)

MOFFETT – We pleaded statute of limitations to dismiss Brian and charity. We filed motion with brief. REsponse was filed. We have today filed a rebuttal to their memorandum. WE are of opinion that the actions against Brian and charity are time-barred, that last transaction was March 9, 2007. Although complaint was filed earlier, the charity and Brian were not added until April 28, 2010 – more than one month after absolute last transaction by charity and Brian. Complaint against Janice and Louis was timely filed, it wasn’t against Brian and charity.

Plaintiff contends that a latent injury, but defined that she was precluded from knowing about it. I asked her about whether she asked Louis about her funds, she said I was scared of him. She should have known, yet she waited more than three years to add Brian and charity. Have new brief as rebuttal.

JUDGE – Court of opinion that the motion as to Brian and charity is not well taken. Overruled. My understanding that if a lawsuit is timely filed, and it was per Louis and Janice, and iff add more defendants doesn’t change the cause of action. It relates back to date original pleading was filed. No change in cause. Overruled.

HUDSON – Ask court to reflect that Louis and Janice asked not to be present.

JUDGE – (Russell calls them). You could have subpoenaed them.

R RUSSELL – Calls Rebecca Owens (wanted to call Louis and Janice first but they are not here).

OWENS – Of Tupelo. Paralegal in his office, worked for CPA firm. Boxes on plaintiff’s table, she’s reviewed documents in them. Exhibit 1 – identifies as listing of all accounts of Touched by Angel, TBAA Enterprises, Janice, Louis, Brian and Florence Aldridge. Listing of disbursements I found. First set are accounts per Florence Aldridge, disbursements from it for charity or other defendants. $552K total.

That amount at bottom, is where funds ended up. Examined checks. In TBAAM – $371K receipts from $552K. Transfers – there were many between these accounts but they are not included in these figures if they were in Florence Aldridge accounts. All transfers made by Louis Aldridge.

Exhibit 16 – These are breakdowns of itemized listings of disbursements from Florence accounts. First is TBAAM. Shows accounts, detailed listing of each transfer, check or debit from Florence to each of defendants. Breakdown of figures on other exhibit. Louis $22K. There are 12 accounts.

Exhibit 17 – A detailed listing of disbursements from TBAAM Enterprises Inc. to various payees – transfers to other TBAAM accounts, Louis, Janice and Brian. Where a portion of those funds went to other TBAAM accounts. After $371K to TBAAM, some $12K went to Brian. Checks came from discovery.

Exhibit 18 – Disbursements from Touched by an Angel Ministries to TBAAM Enterprises Inc. Transfers from nonprofit to TBAAM Enterprises. Total $82K. Enterprises paid to Ministries $78K.

Exhibit 6 and 7 – Secretary of State website as to status of Ministries – says Ministries expired Aug. 2010. Not recognized as charity by SOS after that date.

Exhibit 9 – SOS website Enterprises – created Dec. 1, 2002. Status dissolved Dec. 24, 2004. Not viable organization since then.

All bank statements? Several missing from each of the banks records. Computations don’t include every disbursements. Totals could be understated. Overdrafts? Extremely, she says. Found Florence and some Touched – AmSouth of TBAAM Enterprises had $5,563 in overdraft charges. I didn’t have a chance to go through all. TBAAM at Trustmark, $868 overdraft, Renasant $1,105 overdraft charges, (goes back to Exhibit 1). Enterprises had 4 different accounts. Not sure of all four were under Louis’ Social Security number.

R RUSSELL – Offers two boxes of documents as evidence, on which Owens based her testimony as a composite. (HUDSON – We produced all records in our possession. If those are what we produced, we have no objection. MOFFETT – No objection. We’ve never had control of them.)

Says that’s all he has, your honor.

JUDGE – All information contained in Exhibit 15, the compilation. Contained in Exhibit 16. Anybody have problem with compilation? (HUDSON would like to cross examine her.)

HUDSON – Asks Owens – have any documentation of Mrs. Aldridge’s assets?

OWENS – Shows her assets (they were more than that), just figures for each account I could attribute to her. Not a total of all her assets. Arrived at tracing transfers and checks.

HUDSON – Any transfers from her accounts to these accounts such as AmSouth?

OWENS – Yes, did not include those because they went into one of her accounts. Any transfers from one of her accounts into another of her accounts, I did not include.

HUDSON – Disbursements, would not include anyfunds transferred between acccounts?

OWENS – No, there were some. These are directly to defendants.

HUDSON – That’s all.

MOFFATT – You’re employee of Rhett Russell, you’re not a CPA?

OWENS – That’s right. Not saying anybody stole anything, defrauded anybody. Just how much was moved. All could have been valid transfer.

MOFFATT – Power of Attorney revoked, when?

OWENS – I don’t know. Just went through all the records they provided to us.

MOFFATT – Did you look at Ministries acct and compare disbursements with receipts. Some may have come from elsewhere.

OWENS – Correct. Only took the amount I could positively identify by deposit. Some deposits have slips and cancelled checks for them. Could know for certain on some of them.

MOFFATT – For example, I’m looking at disbursements from TBAAM Enterprises, page 2, 2009. We know no deposits from Flo after 2007. How did you associate it with Flo Aldridge’s money?

OWENS – I didn’t. I just analyzed information from the bank accounts.

MOFFATT – Did you associate Flo’s money into these accounts to calculate these disbursements?

OWENS – Yes. (Moffatt says her money stopped in 2007, how can $600 check in 2009 be associated with Flo’s money?) I just looked at records provided. Some of them… account of Flo’s disbursements – every single one of those have direct correlation from her account with documentation to these specific accounts.

MOFFATT – We know Flo Aldridge revoked her POA in July 2007. What about this later check?

OWENS – It’s not included in that total.

MOFFATT – I’m confused.

OWENS – All itemization of disbursements total $552K.

MOFFATT – Flo Aldridge disbursements to TBAAM Ministries? Total what?

OWENS – Some of those are charges after the dates. I just included. But the $552K total came from her accounts.

MOFFATT – I thought you said Brian got $12K? You said yes?

OWENS – Yes, I did. (Moffatt notes checks to Brian in 2008 – is your testimony just incorrect about those?) I guess it was.

MOFFATT – Flo only source of income in this time?

OWENS – I agree.

MOFFATT – After 2007, not connected with Flo Aldridge, was it?

OWENS – Listing covers 2003 through 2008. Doesn’t have exact start and ending date before me.

R RUSSELL – Your honor, what exhibit is her referring to? (He puts exhibits in front of Owens)

JUDGE – May be some difficulty … I believe court is able to read the item which has been number Exhibit 15, shows disbursements made to specific individuals, inclduing Ministries $140K. From accts of Florence. Disbursements begin Feb. 2005 and end March 2007. All the information is contained in the exhibits. I think these amts are the same money. Look at Exhibit 4 – transfers to TBAAM Enterprises shows dates that it begins Jan. 2005 and ends Aug. 2007 total $371K. Exhibit 15 – shows $371K – it’s pretty obvious they are the same and exact dates, on checks the payee is listed.

MOFFATT — Problem, these disbursements were done after Mr. Aldridge had any involvement. That’s confusion for me. Apologize I’m not being clear.

JUDGE – All I have is official court file, filed Dec. 2008. First 4 pages, every disbursement is before filing of lawsuit. Payee is Louis Aldridge – total $22,266. Shown includes Pineapple Grill and Best Western in Hawaii are in 2005 and June 2008. Every one is before lawsuit was filed.

MOFFATT – THAT’S true on some. But if you look at one written Aug. 2009, Sept. 2009.

JUDGE – I think we’re on Exhibit 16 – every disbursement on exhibit pre-dates date of filing of this lawsuit. But I did not mean to interrupt your cross-examination.

MOFFATT – Thnk I asked about lawsuit filed Dec. 2008. These checks written after that.

OWENS – Correct, those referring to are not included in $552K figure.

MOFFATT – -Not part of $552K?

OWENS – No, only used to calculate come from Exhibit 16, latest transaction is June 2008. Nothing after from Flo Aldridge.

JUDGE – Disbursements you’re talking about are on Exhibits 17 and 18. Somewhat interesting to the court, they are from TBAAM Enterprises to Ministries, or reverse. Shows tremendous transactions between but doesn’t necessarily show from Flo to Enterprises or Ministries. Just that they were co-mingling and putting funds together. Assume source of huge amts of money was Ms. Aldridge.

MOFFATT – Asking about $12K to Brian. Some disbursements to him are from TBAAM after June 2008, other sources of income during that time other than Flo Aldridge.

One final question – all you did is look at accounts. Not saying who had responsibility, just what I found. (She says, correct)

R RUSSELL – On Exhibit 15 – just saying at top of list that you got disbursements from Flo Aldridge assets? (Owens – yes) At bottom, destination where went? (Owens – yes). Exhibit 17 – listed checks paid to defendants? (Owens – yes) Louis, Janice and Brian signed those checks? (Owens – yes)

11:42 – Russell calls Brian Aldridge. (JUDGE – Time to break for lunch until 1 p.m.)

JUDGE – About Louis as witness, inferred you were entitled to a default? I mis-spoke. I think mere fact that they aren’t here is not necessarily showing their liability against them. That will depend on the proof you put on. Your punitive request will depend upon proof.

R RUSSELL – Ask record to reflect they were here just before you called case. Also, offer their depositions at this time. JUDGE – We’ll deal with that at the point in time. Won’t finish with this today.

MOFFATT — Call to court about motion to dismiss. (Hands it to clerk).

(Afterward, speculation that Louis, Janice Aldridge may be seeking protection under federal bankruptcy laws. If that’s the case, the claims against them will likely be stayed within the bankruptcy proceedings. Stay tuned to see if today’s hearing determines what’s going on with them.)

(Come back to NEMS360.com for developments.)

• • •

9:00 A.M. TUPELO – Florence Aldridge’s damages lawsuit against three other family members was ready to begin this morning in Lee County Chancery Court.

The elderly Mrs. Aldridge claims extensive assets were improperly used by her brother-in-law, Louis Aldridge of Tupelo, to whom she gave her power of attorney rights in 2003 when she became ill.

Today, her attorneys seek to convince Chancellor Mike Malski that she is owed a full accounting of what happened to her assets – money, her home, jewelry, life insurance proceeds and other things. She also wants punitive damages and attorneys’ fees.

The defendants, including Louis’ wife, Janice, and their son, Rep. Brian Aldridge, insist they did nothing improper. Among Florence Aldridge’s allegations is that Touched by an Angel Ministries Inc. of Tupelo was given $250,000 from her accounts, and did not reflect her best interests.

(Below is a running account of today’s court action, also set to resume Thursday in the Lee County Justice Center. Please forgive the likely typos and other glitches that arise from typing this as it happens. As I usually do, I’ll post new developments on top of earlier accounts.)

Attorneys Rhett and Frank Russell for plaintiff. T.K. Moffatt, Mr. Hudson (full name coming) for defendants.

• • •

9:02 – Malski enters courtroom. Calls day’s docket for cases. Lots of people in audience.

Looks like he judge will consider some other case issues prior to start of Aldridge trial. Says he’ll start taking evidence in this case “promptly at 9:30., if the parties are unable to come to an agreement. (The lawyers leave the courtroom.)

(Come back to NEMS360.com for developments.)