Bankruptcy proceedings for Columbus entrepreneur and millionaire Donald R. DePriest hit a snag Wednesday at a hearing in Aberdeen.
DePriest, along with his attorney Selene Maddox of Tupelo, appeared before his court-appointed case trustee Steven Livingston in U.S. Bankruptcy Court of the Northern District of Mississippi where DePriest testified under oath to assets and liabilities he had submitted to the court. DePriest has essentially been forced into Chapter 7 bankruptcy, which requires a debtor to liquidate certain assets to help pay off outstanding debts.
According to documents DePriest filed with the court, to which he testified on Wednesday, he claims $4.1 million in assets against $43.6 million in liabilities. Now retired, he testified he makes about $4,000 per month between Social Security payments and payments from other sources.
Through the bankruptcy process, debtors are required to list any outstanding court proceedings – such as a divorce or a lawsuit – where they could financially benefit from a judgment or settlement. However, DePriest failed to note on his submission to the bankruptcy court a pending federal lawsuit in Illinois where he and his wife, Sandra DePriest, are seeking more than $2.5 million they claim they are owed from oil lease investments.
DePriest told Livingston on Wednesday that he did not realize he had to list that lawsuit, since he believed it dealt primarily with his wife and her assets. Yet, according to court documents for the case, Donald and Sandra DePriest are co-plaintiffs, with Donald actually listed above Sandra on the complaint.
Maddox told the trustee she became aware of the pending Illinois lawsuit this week, and she planned to amend DePriest’s bankruptcy court filings to show any potential financial gain he has from it.
Four petitioners filed an involuntary petition last September – with claims totaling $13.2 million – that precipitated DePriest’s bankruptcy proceedings. All four had previously received court judgments entitling them to that money, which DePriest has not paid.
Once DePriest submitted to the bankruptcy, it opened the door for other creditors to lay claim to his assets.
Former business partner and DePriest accountant, Oliver Phillips Jr. of Columbus, is seeking $9.1 million in the bankruptcy from a judgment he received in Lowndes County Chancery Court. Court documents show other Lowndes County residents who invested with DePriest have nearly $2 million in total claims.
A former telecommunications entrepreneur, DePriest owned Charisma Communications, an entity which dealt with cellular phone service licensing in the 1980s. He sold that company for $100 million in 1986, according to Lowndes County Chancery Court documents. Since then, DePriest, who lives on Seventh Street North in Columbus, has dealt with capital investment and other business ventures through his companies, among them MCT Corporation and Maritime Communications.
In 2005, President George W. Bush appointed DePriest, a major Republican donor, to the Tennessee Valley Authority board of directors. Four years later, DePriest resigned from the post after being accused of not repaying millions of dollars in loans and misleading investors.
On Wednesday, Livingston noted DePriest’s former status as a thriving multi-millionaire and pointedly asked him, “What happened?”
While not giving a specific answer, DePriest told Livingston he ended up losing much of his fortune due to several “unfortunate circumstances,” including a “fire” and “technology failures.”
Neither Maddox nor DePriest would comment to The Dispatch after Wednesday’s hearing.
The case has been continued to July 1.
Zack Plair is the managing editor for The Dispatch.