In what may be a gambit to protect the family townhouse from creditors, Seletha Nagin, wife of convicted former New Orleans Mayor Ray Nagin, filed for bankruptcy protection in federal court in Texas this week, court records show.
The eight-page Chapter 7 filing was not necessarily startling. The Nagins’ money problems are well known, and their modest townhome in the Dallas suburb of Frisco was set to be sold at a foreclosure auction this week.
Prosecutors have also asked a federal judge to order Nagin to pay $500,000, which they calculate as the value of his ill-gotten gains.
It’s not clear what, if anything, the former mayor has been doing for a living since he left office. He wrote a book about his experience during Hurricane Katrina, but it sold poorly. He also sought work as a consultant and public speaker in various arenas, apparently with very modest success.
One high-paying consulting job that lasted for nearly a year after his term in office ended was characterized by federal prosecutors as a series of kickback payments. It became the basis for nine of the charges against him. He was convicted on all of those counts.
Seletha Nagin’s bankruptcy petition, filed Monday, may have bought the Nagins more time on their impending foreclosure.
Chapter 7 bankruptcy filings automatically trigger a stay on other collection efforts against the person declaring bankruptcy, including foreclosures. Those processes can resume once the bankruptcy has been concluded.
Less than a month ago, the lender who holds the note on the Nagins’ townhome called in its loan, and the home was set for a foreclosure sale Tuesday. Seletha Nagin filed for bankruptcy a day before the scheduled sale. It could not be determined Wednesday whether the sale took place.
Seletha Nagin’s bankruptcy filing lists 14 creditors but does not specify the amount owed to each.
One of the creditors is Everhome, which holds the note on the home in the Bella Casa subdivision in Frisco, a debt of about $157,000.
Others include AT&T; Comenity Bank; Credit Collection Services; Credit Control; Dillards; Hughes, Watters & Askanase LLP; the Internal Revenue Service; Kohl’s Department Stores Inc.; Macy’s; Monarch Recovery Management Inc.; Nations Recovery Center Inc.; OrthoTexas; and Radiology Associates of North Texas.
Nagin was convicted on 20 of 21 corruption- and bribery-related charges in February. He is scheduled to be sentenced June 11 by U.S. District Judge Ginger Berrigan. The government’s request for forfeiture of Nagin’s assets is also before Berrigan.
Editor’s note: This story was changed May 8 to reflect that the application lists 14 creditors, not debtors.
Follow Gordon Russell on Twitter @gordonrussell1.