Bill McHenry received millions of dollars in “commissions” in exchange for his recruitment of new investors to Madison Timber. The Receiver obtained a $3,473,320 judgment against McHenry on August 16, 2019, but he has not paid it.
On January 24, 2020, McHenry filed for bankruptcy. In addition to the $3,473,320 he owes the Receivership Estate, he represents that he owes the I.R.S. $706,761.93 and a handful of banks more than $684,000.
By filing his petition for bankruptcy, McHenry triggered an automatic stay of litigation against him. The automatic stay applies to all bankruptcy petitioners pursuant to 11 U.S.C. § 362.
The result is that the Receiver cannot collect the $3,473,320 judgment against McHenry while his bankruptcy proceedings are pending. The Receiver, however, can and will participate in McHenry’s bankruptcy proceedings in order to assert the Receivership Estate’s rights.
On April 23, 2020, the Receiver filed an adversary complaint in McHenry’s bankruptcy proceedings that objects to the discharge of his debt to the Receivership Estate on the basis, among others, that the debt flows from his false pretenses, false representations, and fraud.
The following are select filings (most recent first) relating to McHenry, from the federal civil case Alysson Mills vs. Michael D. Billings, et al., No. 3:18-cv-00679 (S.D. Miss); the federal criminal case United States vs. McHenry, No. 3:19-cr-00020 (S.D. Miss); the bankruptcy proceeding In re William B. McHenry, Jr., No. 20-bk-268 (Bankr. S.D. Miss), and the adversary proceeding Alysson Mills v. William Byrd McHenry, Jr., No. 20-ap-22 (Bankr. S.D. Miss):
2020-02-06 [Docket entry only] “The Judgment Debtor Exam scheduled for 2/10/2020 at 1:30 PM is hereby postponed until further notice.”