[Chat] Fw: [NNEHousing_BaltimoreCity] NEWS: Hamm defends filing for insolvency

[Brad Schlegel]

 Food for thought!!

----- Original Message ----- 
From: <NNEHousing_BaltimoreCity at us.army.mil>
To: <NNEHousing_BaltimoreCity at yahoogroups.com>
Sent: Wednesday, November 17, 2004 6:49 AM
Subject: [NNEHousing_BaltimoreCity] NEWS: Hamm defends filing for insolvency


NOTE: There is NOTHING wrong with filing for bankruptcy.  However,
when you do it, make sure you comply with the law.

Is the O'Malley Administration capable of thinking of these things
BEFORE it selects another police commissioner?

Here's a helpful checklist that I developed in 2
minutes over my morning coffee - it's yours for free!

Things To Do When Investigating a Potential Police Commissioner

1.  Check criminal record;
2.  Check arrest record;
3.  Check civil filings;
4.  Check domestic violence protective order filings;
5.  Google;
6.  Check property ownership and residency in Baltimore City;
7.  Check voter registration;
8.  Interview candidate;
9.  Read job application completed by applicant;
10. Check references;
11. Ask references for references;
12. Check candidate for visible deficiencies (i.e. does
he make racist, sexist, anti-gay, or other inappropriate
remarks during interview?);
13. Inquire if candidate has a history of public drunkeness
or other inappropriate behavior;
14. Have an adult not in awe of the candidate's ability to
handle a gun and make the police car's lights flash and siren
blare interview candidate again;
15. Check records of red-light tickets, parking tickets and
other citation-type infractions;
16. Check bankruptcy filings.

************************************************

Hamm defends filing for insolvency
1997 bankruptcy process did not note pay increase

By Ryan Davis and Stephanie Hanes
Sun Staff

November 17, 2004

Acting Police Commissioner Leonard D. Hamm filed for bankruptcy in
1997, just days after the city school board approved the promotion
that made him permanent school police chief and more than doubled
his salary.

But on the forms he filed in federal court, Hamm listed his salary
as the annual equivalent of $27,936, not the $64,260 he was set to
receive. He also indicated he was not expecting a noteworthy change
in salary.

Throughout the three-month bankruptcy process, Hamm never told
anyone about his raise, and in December 1997 he was relieved of
$21,300 in debt.

Many local bankruptcy lawyers said that if Hamm knew about his
pending raise when he entered his court filings, he abused the
federal bankruptcy system.

Hamm and city lawyers say there is nothing wrong with what he did.

The acting commissioner says that despite the school board's
approval of his promotion, which was made during a public meeting
along with at least two dozen other personnel moves, he was unaware
of the coming raise when his bankruptcy was filed.

"I never knew anything about getting a raise until I actually saw my
paycheck," he said last night. "I never went to any school board
meeting, and no one ever notified me."

City lawyers say Hamm's filings properly reflect his status at the
time he filed them -- the only time that is important, they say.

"The question is whether they're correct at the date of filing,"
said City Solicitor Ralph S. Tyler. "What I know is that the form
was accurate. It accurately reflects his salary and pension."

The revelation comes days after Hamm's predecessor, Kevin P. Clark,
was fired by Mayor Martin O'Malley amid questions about past
domestic abuse allegations. An investigation of a dispute in May
between Clark and his fiancee did not substantiate any allegations,
though it turned up other alleged -- though unproven -- domestic
disputes from Clark's past in New York. That disclosure raised
questions about the background check O'Malley performed before
hiring Clark.

Upon firing Clark last week, O'Malley named Hamm acting police
commissioner. Hamm had been the city's No. 2 police officer since
September. The mayor's spokesman, Steve Kearney, declined to say
yesterday whether O'Malley was aware of the bankruptcy before being
asked about it Monday by The Sun.

"We've looked at this matter carefully, and there is nothing here
that causes concern," Kearney said. "Commissioner Hamm has a long,
distinguished career in the Baltimore Police Department. We are
conducting a very thorough background check. And we anticipate that
Commissioner Hamm will be nominated and confirmed as Police
Commissioner."

Most police agencies, including Baltimore's, perform credit checks
on their applicants. In 2000, O'Malley hired former Police
Commissioner Edward T. Norris, who had previously filed for
bankruptcy.

Chapter 7 bankruptcy is commonly described as a way for an honest
debtor to be relieved of burdens that he or she cannot repay.

In a Chapter 7 filing, a debtor has to show that his disposable
income exceeds his expenses by only a negligible amount, if at all.
If, however, he has enough money left over to pay even a portion of
his debts, lawyers say, he should file for Chapter 13 bankruptcy,
which requires repayment to creditors.

"In a Chapter 7 case, what you're saying to the court is, 'I don't
have the ability to make payment on my debt,'" said Marc Kivitz, a
Baltimore bankruptcy lawyer. "Not even 'payment in full,'
but 'payment at all.'"

Hamm listed nine creditors to which he owed the $21,300. Those
included Harbor Bank, financial corporations, Circuit City and Home
Depot. The amount did not include the mortgage on his West Baltimore
home or his car loan, on which he continued to make payments. The
successful bankruptcy filing excused him only from the $21,300 in
debts.

Hamm, 55, declined to say yesterday what led him into debt. "It's
personal," he said.

The popular commander retired in 1996 as a major in the city police
force. He had served 22 years and was earning $64,000 a year when he
retired, according to his bankruptcy filing.

He then worked about 1 1/2 years for the security division of the
Downtown Partnership, a business advocacy group. For that, he was
paid $43,000 annually, plus his police pension, according to his
bankruptcy filing.

Hamm left that job to work for the schools on April 1, 1997,
according to his resume. He signed a one-year contract stating that
his annual salary would not exceed $30,273. He said yesterday that
he took the job, despite the pay cut, because he wanted the
challenge of working with children.

Hamm said yesterday that he retained attorney Sharon King on July
11, 1997, and gave her his paperwork to file for Chapter 7
bankruptcy. "I left everything in the hands of my attorney," he said.

In a public meeting, the school board promoted Hamm from consultant
to a director position on Aug. 26 that year.

The next day, Hamm signed his bankruptcy forms.

On Sept. 2, the forms were filed. They indicated that including his
salary and pension -- from which loan payments were being deducted --
 Hamm was bringing home $2,760 a month. He claimed monthly expenses
of $2,839, apparently making it impossible for him to gather enough
money to repay his debts.

By Sept. 8, school records reflect, Hamm was being paid at a rate of
$64,260 per year.

On Oct. 7, Hamm attended a creditors meeting -- a session in which
trustees typically ask debtors and their lawyers whether any
information in the bankruptcy filings has changed. The trustee in
Hamm's case, attorney Monique D. Almy, noted in the official record
of the meeting that Hamm had changed employers.

In response to whether the financial information in his initial
filing was correct, she checked "yes." She wrote that no amendments
were necessary.

"If your question is, 'Is that kosher?' I would say, 'Absolutely
not,'" said Alan Grochal, a local bankruptcy lawyer. "If I were the
trustee in the case, I would be troubled."

According to Hamm, no one ever asked if his pay had changed and he
never told anyone his pay had changed.

On Dec. 12, 1997, Hamm's debts were expunged.

A salary increase, some said, does not necessarily mean a filing was
inappropriate.

"The fact that his salary went up a few days later, even if he knew
about it, doesn't necessarily indicate he filed in bad faith," said
Thomas Dame, a Baltimore bankruptcy attorney.

Both the city solicitor and police legal counsel Kim Y. Johnson, a
bankruptcy attorney, indicated yesterday that they didn't believe
Hamm's raise would have prevented him from having his debts expunged.

"I'm strongly suggesting to you that it's unlikely it would have
mattered," Tyler, the city solicitor, said.

Would Hamm do anything differently if he filed for bankruptcy
today? "Absolutely not," the acting commissioner said.

Sun staff writers Matthew Dolan and Liz Bowie and Sun researcher
Jean Packard contributed to this article.

http://www.baltimoresun.com/news/bal-te.md.hamm17nov17,0,7174369.story?coll=ºl-home-headlines

Copyright © 2004, The Baltimore Sun