Rathbun Realty Inc. filed for bankruptcy Friday, claiming more than a million dollars in debt while estimating $50,000 or less in assets.
Attorney Alan Solot filed for Chapter 7 bankruptcy on behalf of Bette Glover, president of Rathbun Realty Inc.
Unlike the more familiar Chapter 11 filing in which the debtor seeks to reorganize by negotiating with creditors to alter the terms of the loan without having to sell off assets, a Chapter 7 filing, also known as liquidation bankruptcy, allows the debtor to sell nonexempt property with proceeds distributed to creditors.
As part of the bankruptcy petition, a meeting of creditors has been scheduled for November in U.S. Bankruptcy Court downtown.
Telephone messages left for Solot were not immediately returned.
The Chapter 7 filing negated the need for a Rathbun Realty representative to make another court appearance Monday.
In March, a jury awarded a tenant renting a home through Rathbun Property Management a judgement of nearly $112,000. Because Rathbun has not paid the damages in the case, a judge had ordered representatives of the realty company back to court Monday for a debtors hearing to examine Rathbun financial and property records.
Financial troubles at Rathbun Property Management emerged after Glover and her husband, broker and co-owner George Glover, filed a report with the Tucson Police Department in August claiming a former employee embezzled more than $1 million.
Earlier this month, the Arizona Department of Real Estate issued a cease-and-desist order preventing the company from "engaging in any real estate activity … without first complying with all applicable laws and rules."
Rathbun, which managed nearly 800 residential properties in the Tucson area, has since turned over operations to an outside broker, Walt Sample of Sample Realty Investment and Trust Co.
Contact reporter Kimberly Matas at email@example.com or at 573-4191.