Jacobs' filings show fall into bankruptcy 123 creditors seek $320.7 million

June 12, 1993|By Ian Johnson | Ian Johnson,New York Bureau

NEW YORK -- From $78.5 million in loans lent by a mightly Wall Street bank to a $210 housekeeping bill, Baltimore Orioles owner Eli S. Jacobs' bankruptcy has left a wake of 123 creditors seeking $320.7 million, according to court documents filed yesterday.

The 55-year-old businessman has $146.7 million in assets, including $94 million in Orioles stock, according to court papers. Mr. Jacobs has a monthly income of $161,000, but the gap between creditors' demands and Mr. Jacobs' assets is $174 million.

Most of the money was lent by prominent banks, including $78.5 million from Morgan Guaranty Trust Co., $54 million from the Bank of New York and $13 million from Chemical Bank.

Orioles stock was used as collateral for only one of the loans listed in the document -- $38.6 million from Citibank. But as a sign of Mr. Jacobs' former high standing in the business world, many of his loans were not backed by any collateral.

For example, most of the money from the Bank of New York was unsecured.

Many of the claims were smaller but still told a tale of Mr. Jacobs' fall into bankruptcy. New York bookkeepers, for example, had claims of $750 and $530, while several law firms, including Baltimore's Murphy & Schaffer, asked for thousands of dollars for legal services.

The smaller, unsecured claims date back three years, with many coming over the past six months as banks were making increasingly loud grumblings about Mr. Jacobs' precarious finances. A $3,024 stay at The Pierre, a hotel on Fifth Avenue in New York that ended Jan. 5, for example, is still unpaid.

Other recent debts include a claim from American Express for $10,638 in credit card purchases made in March, while Citibank says that Mr. Jacobs owes $5,979 for Visa credit-card purchases in February.

Mr. Jacobs' finances were hard hit over the past several years as some of his businesses faltered because of the recession and the heavy load of debt. His difficulties became public knowledge after four banks sued him for defaulting on loans, including Baltimore's Mercantile-Safe Deposit and Trust Co., which attempted to collect $21.6 million in August.

After months of pressure from his lenders, Mr. Jacobs entered personal bankruptcy in April, which means he cannot be sued by creditors and will be given time to develop a plan to reorganize his finances.

The documents filed in the U.S. Bankruptcy Court for the Southern District of New York were the first close look at Mr. Jacobs' finances. His problems will result in the sale of the Orioles and in many small businesses' probably being left with unpaid bills.

Mr. Jacobs also did not make good on several charitable pledges, according to the documents, including a $3 million pledge in 1988 to the Holocaust Memorial Council in Baltimore, a $250,000 pledge in 1990 to the Simon Wiesenthal Center in Los Angeles and a $75,000 pledge in 1991 to the American Jewish Committee in New York. He also failed to pay a pledge to the Wilmer Ophthalmological Institute at Johns Hopkins Hospital, according to the documents. The papers don't disclose the amount, but sources have said it was $3 million.

But not all of Mr. Jacobs' charitable donations fell by the wayside. Among the gifts made over the past year were a $1,000 gift to "Friends of Les Aspin," a club devoted to the secretary of defense, and a $200 donation to the Pikesville Volunteer Fire Department.

While Mr. Jacobs has some huge liabilities, there are also some very small ones. He owes money to his newspaper delivery service ($188.39), the swimming pool cleaner ($271.93) at his former Owings Mills estate, a sanitation company ($120), a video store ($8.49), the cellular telephone company ($148.57), the drugstore down the street from his Lexington Avenue office in New York ($168.60), Baltimore's Maid to Perfection Corp. ($210), and Manhattan Cable ($70). He also didn't pay the utility bill to the Baltimore Gas & Electric Co. ($699).

These claims are likely to be among the last to be settled, as priority goes to big secured creditors, such as the banks. In addition to the team, Mr. Jacobs claimed $52 million in assets, including $21 million in stock of Systemix Inc., Mr. Jacobs' biotechnology investment company. Shares in a dozen smaller companies -- including biotech, restaurant and audiovisual equipment businesses -- are the bulk of his assets. He also has some personal assets: a $277,000 residence at an undisclosed address, with $85,000 in furnishings, and a number of bank accounts with just $1 or $2 in them.

Mr. Jacobs also claims $160,000 in monthly income from the companies in which he owns an interest, including Systemix, and the boards of directors on which he serves. He says his expenses total $58,800.

While most of Mr. Jacobs' personal property could be seized and auctioned off by the courts, he has asked that some property be exempt. This includes $500 worth of VCR tapes, $2,500 in clothing, a $1,000 watch, and $2,000 of his stated $60,000 in books.

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