Socialite Patricia Kluge and her current husband filed Chapter 7 bankruptcy last week after losing millions on a vineyard business that lost more money than it made. Even the large divorce settlement with her billionaire ex-husband has not been able to save Kluge’s finances.Their grand ambitions to make a world-renowned Virginia wine weren’t cheap; according to the Post’s extensive profile, Kluge may have funneled at least $44 million into the business. Moses told the Post that “no expense was spared” as the couple bought “the best of everything.” But, he said, “we spent too much, too fast.” And while the winery did gain prestige (its product has been served at the White House), the downturn hit. The couple were late on payments, sales plummeted and they defaulted on their loan.
After their lender seized the winery, none other than Donald Trump put forth the winning bid of $6.2 million at the foreclosure sale of the vineyard in April. Trump and Kluge have known each other for decades.
In an effort to stave off bankruptcy, the couple auctioned off millions of dollars worth of assets; but they barely put a dent in the $50 million of debt they owe. With only $1 million to $10 million in assets left, the couple will still need to liquidate a considerable amount of assets in bankruptcy to satisfy creditors. However, bankruptcy will allow them to keep many of their most important assets such as their primary residence, household goods, furnishings and other assets protected by bankruptcy exemptions. With the help of their bankruptcy attorney and the cooperation of creditors, they could significantly slash their debt and walk away with a large amount of their wealth still intact.
(source: Blogs.wsj.com )