In today’s celebrity gossip section of the Zone of Insolvency blog, we are talking about recording artist and actor Earl Simmons, much more commonly known as DMX. DMX commenced a voluntary chapter 11 bankruptcy case on July 19, 2013. Since that time, according to pleadings filed by the U.S. Trustee for the Southern District of New York, DMX has consistently failed to provide required information or otherwise participate in his bankruptcy proceeding. This lack of cooperation has led the U.S. Trustee to seek the conversion of DMX’s chapter 11 case to chapter 7 or, alternatively, dismissal of DMX’s case.

The U.S. Trustee provides an extensive list of issues that have become evident in DMX’s case. The Trustee states that pleadings filed in the case are “in disarray and are internally inconsistent.” Specifically, the Trustee notes that in certain documents, DMX states his monthly income at $5,000, whereas in others he lists $1,666 as his monthly income. Elsewhere he asserts that he made $10,000 in 2013. DMX states that he has $50 in cash, and no checking or savings account. However, according to a Bankruptcy Rule 2016 statement, he paid his counsel $20,000. Further, DMX also listed “none” for value of clothing, but disclosed $1,000 a month in clothing expenses.

The Trustee’s motion also states that DMX failed to attend his creditor’s meeting (after the U.S. Trustee “reminded and confirmed with debtors counsel the time, date, and location of the 341 meeting as late as the day before the creditor’s meeting was to take place. . . .”) and failed to provide evidence that DMX’s real property is adequately insured as required.

This is not DMX’s first go-round in bankruptcy court. DMX also had a “ruff ryde” in a previously filed chapter 13 case. That case, which he filed jointly with Tashera J. Simmons in New York, was dismissed in part because “Earl Simmons has unreasonably delayed his chapter 13 case to the prejudice of creditors . . . by not filing his . . . schedules within the extended date granted by the Court and otherwise not diligently prosecuting his chapter 13 case.”

The U.S. Trustee was joined in seeking dismissal of the case as a bad faith filing by creditor Amusing Diversions, Inc., which also alleges a laundry list of illicit pre and post-petition conduct by DMX. The U.S. Trustee has moved to shorten time so that her motion may be heard on November 8, 2013, at the same time as the Amusing Diversions motion. The case begs for resolution, as DMX is a party to extensive pending and threatened litigation relating to his music and acting career, in addition to significant personal liabilities. The case should take some step towards that resolution in the coming days.

 

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Tony Lee focuses his practice on representing wireline and wireless telecommunications carriers, cable TV, and Internet companies in regulatory issues and proceedings before the FCC and state utility commissions. Mr. Lee advises local exchange and long distance carriers regarding state and federal regulatory…

Tony Lee focuses his practice on representing wireline and wireless telecommunications carriers, cable TV, and Internet companies in regulatory issues and proceedings before the FCC and state utility commissions. Mr. Lee advises local exchange and long distance carriers regarding state and federal regulatory issues, including intercarrier compensation, universal service and compliance matters. He is engaged in substantive and complex litigation in federal court, and before the Federal Communications Commission and state commissions.