Russell defends 2011 bankruptcy decision
July 31, 2014
Russell, who formerly owned 60 Minute Photo, filed for Chapter 7 bankruptcy on Aug. 23, 2011, claiming $535,367 in assets against $630,000 and ultimately was able to clear more than $500,000 of his debt with approximately $6,106 going to unsecured creditors.
“There are 400,000 open bankruptcy cases in Hampden County right now,” he said. “I want to be the guy who fights for those people because they’re good people and they deserve opportunity. With the way we’re being taxed, the way we’re being regulated and the way Boston is calling all the shots, it makes it [expletive] difficult to be a small business owner or hold a full time job in this area.”
Russell, who will face off against incumbent Democrat Angelo Puppolo Jr., in the state election on Nov. 4, told Reminder Publications he never hid his bankruptcy case, which was also ongoing during his run for selectman. Russell defeated Russell Mitchell at the May 19, 2012, Annual Town Election for the seat vacated by former Selectman Patrick Brady. He announced his candidacy for state representative on Feb. 19.
“I didn’t do anything wrong. I followed the rules. Bankruptcy is a legal remedy,” Russell said. “Am I happy about it? No, but I’m proud of what I’ve accomplished in the past and I think that this experience of believing through a very difficult time makes me just that much more sensitive to the people I’d like to represent in the 12th Hampden District.”
Puppolo said that while he understands that many people have money problems, those seeking public office should be held to a higher standard.
“There are certainly a lot of questions he has to answer,” he said. “It’s unconscionable for a person in public life to walk away from $500,000 in debt.”
As part of the bankruptcy proceedings, Russell’s 37.5-foot 1991 Hunter Legend sailboat, called Avalon, was sold for $44,000. That marked the only asset sold. After administrative expenses, bank fees and reimbursing the $31,048 owed to Wells Fargo Dealer Services, the remaining funds were dispersed to unsecured creditors.
“What sticks out like a sore thumb to me is the boat,” Puppolo said. “If he had so many financial problems, you would think the 37.5-foot boat would be the first thing to go.”
Russell hinted that his opponent’s camp might be responsible for delivery of the bankruptcy documents to media outlets, but said he wasn’t sorry it happened.
“I’m glad it’s coming out now. It just shows that I’m that much of a threat and that much of a serious candidate for this office that people would try to take advantage of mentioning my personal finances,” he said.
Russell continued by stating the interest of constituents, not personal attacks, should be the focus.
“I’ll tell you what’s unconscionable. We have an unemployment rate in western Massachusetts that’s at least double the 5.8 percent that the state would tell you. Among minority youth, it’s probably four times. That’s unconscionable,” he said. “In the last legislative session, taxes have been raised by several billion dollars, but local aid has been cut. That’s unconscionable. Those are your dollars.”
Russell’s other debts included $43,796 to Sallie Mae Inc. for student loans, which are not covered in bankruptcy, but must be reported, $15,411 to the USAA Federal Savings Bank Credit Card Services, and an additional $51,000 in credit card debt owed to Chase Bank USA, Ann Taylor and Sears.
Russell and is wife, Shelley, a principal in the Agawam Public School system, were able to keep other assets, including their home on Stonegate Circle in Wilbraham, which, according to the Assessors Office, has an assessed value of $383,200.
Russell said his financial issues were the result of what he called “a bad economy, a historic change in technology and shortsighted politics.”
The change in technology he referenced was the shift from film photography to digital equipment that was becoming more and more readily available and cost-effective.
“People didn’t get their pictures developed anymore. Most people’s pictures are on their phone now; they’re not in a photo album anymore. That’s how I made my living,” he said.
The largest amount owed to any creditor listed in court documents was a $220,000 mortgage on the property of Russell’s restaurant at 461 Boston Road in Springfield, which closed in 2005.
The mortgage was owed to People’s United Bank, who took over the account after merging with the Bank of Western Massachusetts, which issued the loan in 2008. According to the court documents, the bank claimed he made no payments on the mortgage and had no equity in the property. The property was repossessed and is now valued at approximately $144,000.
Russell said selling the property to Cumberland Farms, which planned to expand its gas station and store on Boston Road, was part of his exit strategy, but the Springfield City Council blocked the sale.
“[The mortgage] was secured on that property, but I had a deal to sell it for $700,000. The City Council at the time, of which my opponent was a member, blocked me from selling that property to a bona fide buyer,” he said. “Now it’s a vacant lot that would be generating tens of thousands of dollars of real estate taxes had it been developed like the [Springfield] Planning Board recommended at the time. The City Council said it wasn’t a good fit.”
Puppolo said the City Council turned down the proposed sale due largely to strong opposition from the neighborhood.
“They were not in favor of expansion and I think the City Council made a wise and prudent decision at the time based on the neighbors’ comments,” he said.
Puppolo added that he didn’t feel the issues surrounding the sale of the property were germane to the issue of Russell’s bankruptcy.
“That decision was years before he filed for bankruptcy and has nothing to do with his subsequent financial issues,” Puppolo said. “I don’t see a correlation between the two.”
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