PORTLAND, Maine — A federal judge has thrown out the bankruptcy cases of three Maine housing companies tied to embattled developer Michael Liberty.
The companies, which together own about 600 units of low-income and senior housing across the state, filed last year to reorganized under Chapter 11 of the bankruptcy code.
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Opposing counsel argued that the companies were abusing federal bankruptcy law in attempts to break contracts with their property manager. And the top bankruptcy judge in Maine appears to have agreed.
Last Friday, Chief Judge Peter Cary dismissed the cases of Pine State Housing Series, LLC, Montfort Housing and Birch Ridge Limited Partnership.
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Liberty, who was recently released from a federal prison and is facing new allegations of scamming investors out of millions of dollars, is named in court documents as a “general partner” in each of the companies.
Drummond Woodsum lawyer Jeremy Fischer represented the companies’ property manager, Stanford Management, and filed the motion to dismiss the cases. He said the “bad faith” cases were also an effort by Liberty to line his own pockets.
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“Ultimately the purpose was to enrich Michael Liberty at the expense of everyone else in the case,” said Fischer.
Stanford Management continues to run the properties “to the benefit of their tenants and the satisfaction of regulators,” Fisher said.
Lawyer George Marcus, who represented the housing companies, declined to comment through an employee of his firm.
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