Even in bankruptcy, Basinger lives well while town does not

January 03, 1995|By Carol Marie Cropper | Carol Marie Cropper,New York Times News Service

Carol Clark lost her job as president of the bank in Braselton, Ga., after it was auctioned in actress Kim Basinger's bankruptcy.

Tom Brown, 76, was laid off five years ago when Ms. Basinger, in a burst of publicity, "bought" tiny Braselton, including the hardware store where he worked. Now he fears that he will lose his rented home as she and her investment partner prepare to sell off parts of the town, about 50 miles northeast of Atlanta, which they purchased with big development plans in mind. A neighbor, Terry Kitchens, is worried about the same thing. "If they say, 'Move out,' I get 30 days to load up," Mr. Kitchens said.

Meanwhile, in California, the owner of Golden State Landscape Irrigation and Maintenance, Mark Booth, is still waiting to collect $8,100 for yard work at Ms. Basinger's home in the Woodland Hills section of Los Angeles.

These are some of the not-so-glamorous people caught up in a multimillion-dollar contract battle-cum-bankruptcy brawl between the decidedly glamorous Ms. Basinger,star of "Batman" and wife of the actor Alec Baldwin, and Main Line Pictures Inc.

The Basinger case is hardly a typical bankruptcy. But in its extremes, it highlights some of the ironies of the bankruptcy system, which has been flooded with cases in recent years as the stigma of "going under" has lessened.

For openers, the case is one of those in which the "bankrupt" person manages to keep on living a life of luxury while creditors are forced to wait patiently to collect a fraction, if anything, of what they are owed. For Ms. Basinger, that means living in three homes on both coasts and spending $31,000 a month on clothes, pets and an ex-husband.

The case is noteworthy as well because of the way the bankruptcy court's shield can be used as a sword. Some companies involved in labor disputes have invoked the shield to void union contracts. In Ms. Basinger's case, bankruptcy protection has allowed her to appeal a big jury verdict in the dispute with Main Line without having to post an expensive, perhaps unobtainable, $12 million bond guaranteeing payment if she loses, as required by state law.

That has left small creditors such as Mr. Booth in limbo, as Ms. Basinger and Main Line lurch slowly toward a final ruling on the questions of whether she was legally bound to appear in the 1993 movie "Boxing Helena" and hurt Main Line when she bowed out.

For Mr. Brown, Mr. Kitchens and others in Braselton, a town with a hardscrabble history, the bankruptcy has been a rude awakening from a Hollywood dream. Instead of becoming a tourist attraction tied tightly to Ms. Basinger's name, Braselton is now just another asset in her bankruptcy -- and one with an uncertain future.

As the case drags on, and the lawyers' bills mount (the litigants have already spent more than $3 million chasing each other through the courts), those holding the bag can only guess what they may get.

Creditors desperate for their money have been known to go bankrupt themselves -- though not in this case, said John Reitman, the lawyer for the bankruptcy trustee handling Ms. Basinger's case. But, he said, small creditors cannot afford to force quicker action.

Most creditors fall into this category, said Charles Normandin, who teaches bankruptcy law at Harvard Law School. Bankruptcy's little guys may wind up getting only 10 to 15 cents for each dollar they are owed, he said, but all they can do is wait. "If I had a client come into my office and say, 'I've got $20,000 in an unsecured claim,' I'd say, 'File a proof of claim in the bankruptcy court and forget it,' " he said.

Unsecured creditors are at the end of the line in a personal bankruptcy case. And those lines have multiplied since the 1978 rewriting of the country's bankruptcy law, which generally made it easier for the financially swamped to walk away from most or all of their debts.

Almost 4.4 million corporate and personal bankruptcy petitions were filed in the 1980s -- more than double the number filed in the '70s, according to the Administrative Office of the U.S. Courts. Slightly more than that record number have already been filed this decade, though filings have declined slightly since the 1992 peak as the economy has improved.

Bankruptcies filed by individuals have changed less, Mr. Normandin said. But flashy cases like Ms. Basinger's can annoy those who see so much money flushed through the courts while creditors wait years to collect a few thousand dollars.

The troubles for Ms. Basinger's creditors began in May 1993, when a jury in Los Angeles decided that Ms. Basinger had indeed agreed to appear in "Boxing Helena," a film about a doctor who cut off his lover's arms and legs, and then reneged. JTC Sherilyn Fenn got the vacant role and "Boxing Helena" opened to strong reviews but a weak box office.

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