Court Seeks Answers on Closed Auction

By Elizabeth Hardin-Burrola
Gallup Independent
October 6, 2015

http://gallupindependent.com/

U.S. Bankruptcy Judge David T. Thuma has ordered attorneys for the Diocese of Gallup into court to explain why the public and media were barred from attending the diocese’s recent property auction.

Thuma issued a notice to show cause Friday and set a hearing date for Oct. 19. However, Thomas D. Walker, the diocese’s Albuquerque bankruptcy attorney, filed an amended notice of hearing Monday, which bumped up the hearing to 1:30 p.m. Wednesday.

In his order, Thuma noted that the Gallup Diocese “may not have conducted a ‘public auction’ as required” by the Federal Rules of Bankruptcy Procedure. Attached to Thuma's order were two letters of complaint from individuals barred from attending the Albuquerque auction Sept. 19. The first letter was written by Meredith Edelman, a doctoral scholar conducting research, and the second letter was from the Gallup Independent.

"These parties claim they were not permitted to observe the New Mexico auction," Thuma stated. "The Court needs more information about whether the auction was a public auction, who was permitted to observe the auction, and who was excluded. If members of the press and/or public were excluded, the Court would like the Debtors to show cause why the auction sales should not be invalidated. If remedies less harsh than invalidation are available, the Court would like to hear argument related to advisability of such alternative relief."

Thuma cited an Aloha Airlines case in 2009, in which U.S. Bankruptcy Judge Lloyd King ordered a new auction to be conducted after a reporter and a labor union representative were barred from attending an auction.

According to a Honolulu media report, King said, "The exclusion of a reporter was an outrage. It's the United States conducting the sale, and you told a reporter no."

The Diocese of Gallup's hearings in U.S. Bankruptcy Court are open to the public, as are documents in the case's court file. The only exceptions to this are confidential documents related to clergy sex abuse survivors who have filed claims in the case.

‘Agent for the court’

In the diocese's Albuquerque auction, Todd Good, the CEO and president of Accelerated Marketing Group, barred anyone from entering the auction who wasn't a qualified bidder. Good, along with George H. "Hank" Amos III, CEO and president of Tucson Realty & Trust Co., was hired by the Gallup Diocese to publicize and conduct the property auctions in Phoenix and Albuquerque.

Good and Amos were paid a flat fee of $45,000 by the diocese and allowed to collect a 10 percent buyer's premium on each sale.

According to sales reports submitted to the court, both auction sales only garnered a fraction of the properties' assessed or actual values. The total sales for both auctions was reported as $225,066, with the diocese only profiting about $160,660 and Good and Amos collecting about $65,500. Both auction reports also appear to contain a number of errors that diocesan attorneys have not explained or corrected.

Good, who described himself as an "agent for the court," told the media, "We have discretions how we conduct the sale. We see no advantage to let somebody in the sale that is not a bidder. In other words, it doesn't benefit the debtors and it doesn't benefit the creditors, and therefore we only let qualified bidders into the event."

In her letter to Thuma, Edelman said Good made a similar statement to her before threatening to have her removed from the hotel property where the auction was taking place. Edelman told the judge she believed it would have been beneficial to creditors to allow observers into the auction.

"The creditors in this instance are survivors of child sexual abuse whose abuse was covered up for years," Edelman said. "They can only benefit from transparency in this process. If members of the public and the press are unable to observe the procedures, this transparency is lacking."