River Forest real estate developer Frank "Marty" Paris remains in Cook County Jail, as he has for nearly a month, as a federal bankruptcy judge considers whether a Cook County divorce court judge can keep him locked up indefinitely until he pays hundreds of thousands of dollars to his ex-wife and a group of lawyers demanding fees.
On Jan. 3, federal Bankruptcy Judge David Cleary took under advisement competing motions from Paris, on one side, and his ex-wife, Kerry Paris, and a phalanx of lawyers on the other, over the questions of which assets may belong under federal bankruptcy protection, and whether that protection should produce Marty Paris' release from what he has called an illegal "debtor's prison," being used by lawyers to squeeze him for money.
The various parties squared off before Judge Cleary again for the second time since Paris filed for Chapter 7 bankruptcy in early December.
U.S. Bankruptcy Judge David Cleary
| Premierbankruptcylawyers.com
That bankruptcy filing came at the same time Paris was arrested and locked in the Cook County Jail under the order of Cook County Judge Abby Romanek, who is overseeing the Paris divorce case in Cook County family court.
Paris has never been formally charged with any crime. Instead, he was ordered to jail under a so-called writ of body attachment. Romanek had issued the writ after finding Paris in civil contempt of court for not fulfilling prior orders issued by that judge and others amid the divorce proceedings.
Romanek has never set an end date for Paris' incarceration. Rather, at the time, she said Paris would remain in jail until he could "purge" the contempt order by paying a $500,000 cash bond; signing over large amounts of property to his ex-wife, Kerry Paris; and secure a $2.5 million life insurance policy, to be paid entirely to his ex-wife upon his death.
Paris, however, remains jailed.
The jailing marked the second time a Cook County judge has ordered Paris incarcerated during the divorce proceedings that began in 2016.
The couple had married in 2002 and have seven children, according to court documents.
Paris, founder and president of Sedgwick Development in Chicago, had been jailed for five days in 2017 at the order of Cook County Judge Karen Bowes, allegedly for failure to comply with orders from that judge to set aside $750,000 to pay his then-wife's legal bills.
Throughout the process, Paris has argued the nature of his business means that seemingly tens of millions of dollars in revenue that appear on balance sheets and income statements don't actually equate to money in his bank accounts. Rather, Paris has argued those revenue figures represent "phantom income" that merely passes through his business to lenders who help to finance his company's residential building projects in Chicago and nearby suburbs.
However, judges have consistently sided with his ex-wife in finding that they believe Paris has a net worth of more than $20 million, and should be able to afford to pay off court-ordered judgments, including thousands of dollars each month in alimony and child support plus all living expenses for the homes held by his ex-wife, tens of thousands of dollars annually for his children's "activities," and millions in legal bills for attorneys who represented him and his ex-wife.
Lawyers who have backed Paris' incarceration over the unpaid bills include attorneys from the firms of Lake Toback DiDomenico and Hurst Robin Kay & Allen, who have represented Paris; and attorneys from the firms of Cronin & Co. and Angelini Ori & Abate, who have represented Kerry Paris in the proceedings.
Among others who would receive a cut of proceeds is believed to be attorney Sean Crotty, of the firm of Crotty & Schiltz.
According to court documents, Crotty purportedly has co-habitated with Kerry Paris during the Paris divorce proceedings, and the two have been romantically involved.
Crotty has also co-signed motions asking Judge Cleary to keep Paris in jail.
Former Cook County Judge Tim Murphy formally dissolved the Paris' marriage in December 2022.
According to court documents, Paris paid $500,000 in family support last December. However, he has persistently told the court that he cannot pay the additional ordered sums, because he doesn't have the money available.
In response, attorneys for Kerry Paris have argued Marty has the ability to access assets held by various corporate entities they believe are under his control to satisfy the court's orders.
Marty Paris has responded by asserting this represented an overly-simplistic appraisal of his business dealings and structure, claiming persistently that he cannot access the money that is locked up in the corporate entities.
Marty Paris' assertions, however, have proven unpersuasive to Judge Romanek and others, leading to multiple findings of civil contempt against Paris and ultimately the order for his indefinite incarceration, pending his ability to "purge" the contempt.
In bankruptcy court, Paris and his attorney, Scott Clar, of Crane, Simon, Clar & Goodman, of Chicago, have argued federal bankruptcy protections should extend to all of Paris' assets.
Therefore, they said the so-called "automatic stay" protections in federal bankruptcy law should supersede Romanek's jailing order while the bankruptcy court sorts out Paris' financial situation and apportions assets among his various creditors.
Kerry Paris and the lawyers on her side responded to Paris' bankruptcy filing by arguing the attempt to file bankruptcy was illegitimate and done in bad faith, as part of a game of legal "keep away" to prevent his perceived adversaries from taking his assets.
In a motion filed in bankruptcy court, they argued Paris must remain in jail as the only way to force him to pay alleged unpaid family financial support and fees to his and ex-wife's lawyers.
The parties had faced off in bankruptcy court in December. At that time, Judge Cleary chose not to rule on the cross motions concerning Paris' incarceration. He continued that hearing to Jan. 3.
According to a report published by ALABNews.com, on Jan. 3, Cleary also considered arguments over how to handle assets Paris claims are held by the affiliated corporate entities, and arguments over Judge Romanek's demand that Paris potentially borrow $300,000 more to pay his way out of jail, even though his estate was in bankruptcy.
According to the ALABNews report, bankruptcy trustee Ira Bodenstein, who is overseeing Paris' bankruptcy estate, told Kerry Paris "that she was on notice for any assets she received from Mr. Paris due to disposing of assets in the limited liability companies."
According to the ALABNews report, Clara, Paris' bankruptcy attorney, further continued to urge Judge Cleary to declare Paris should be freed, asking "rhetorically what possible good could come from Mrs. Paris’ insistence to keep Mr. Paris locked up indefinitely."
It is not known when Judge Cleary may rule on the competing motions over Paris' continued incarceration.
Clar declined comment following the hearing.
Another hearing over Paris' continued jailing is scheduled on Jan. 5 before Judge Romanek in Cook County court.