Video-poker executive-cum-developer John Vontran forced to liquidate
Published: December 1, 2010
John Vontran, whose video-poker-machine company Amusement Vending Inc. forfeited more than $50,000 in illegal gambling proceeds to the federal government early this year, consented on Oct. 25 to Chapter 7 liquidation of assets after a U.S. bankruptcy trustee accused him and his wife, Kelly Vontran, of “gross mismanagement” and providing “inaccurate and incomplete information” to creditors. The couple initially filed for Chapter 11 reorganization last December.
How this change will affect the prospects for his ambitious redevelopment of Dundalk’s Yorkway parcel—a formerly crime-ridden apartment complex that has been cleared for 66 new homes, a project widely anticipated and promoted by local and state politicians—remains unclear. Work was busily underway during a recent visit, with nine homes completed (including the model unit, which houses the project’s sales office) and sold signs marking numerous lots where construction had not yet begun. Vontran’s company acquired the site in 2008 for nearly $1.64 million from Baltimore County, which bought it for nearly $21 million two years earlier.
When news of the Vontrans’ bankruptcy first emerged last winter, John Vontran stressed that his personal financial straits were “completely separate” from the Yorkway project. His initial bankruptcy filing lists the company that owns the parcel, Yorkway LLC, as a creditor.
Vontran did not return multiple messages left at his cell phone number, which was provided by Baltimore County spokesperson Angela Heffner after City Paper asked her for information about Yorkway’s progress so far. Heffner later said she spoke to Vontran, but “was unable to get a completion date” or “any information” about the project’s current status. When asked if she knew whether Vontran intended to return City Paper’s calls, she said, “I don’t think so.”
The motion to convert the Vontrans’ bankruptcy to Chapter 7 was filed in September, and focuses on Vontran’s conflicting statements, made during creditors meetings held in January and July, regarding three companies: Amusement Vending, JKBK Inc., and Yorkway Properties LLC.
Amusement Vending, trading as Amusement Novelty Sales, is the company that forfeited cash early this year, part of which had been seized during a 2007 federal raid of its offices at 6806 Eastern Ave., according to court documents. As part of a November 2009 agreement with the federal government, which Vontran signed, $51,295 was forfeited as illegal gambling proceeds in connection with the company’s business of holding “casino night” fundraisers for nonprofit organizations. In a 2005 City Paper article (“Game Sharks,” Mobtown Beat, March 9, 2005) that covered a police bust of one of those events, Vontran explained that his company “doesn’t touch the money” that’s raised, but only “rent[s] out the tables” used for gambling.
The bankruptcy trustee’s filing paints a picture of Vontran as a flustered, story-changing debtor when asked to explain Amusement Vending during the two creditors meetings. It concludes that Vontran either “effectively transferred ownership” of the company “to his brother-in-law,” Kirk Kacala, “for no consideration, or his testimony does not provide a complete and accurate picture of the transactions as they took place.” Vontran’s stated reasons for putting the business in his brother-in-law’s hands, the filing states, were that “he ‘wanted to change his hat’ and that he ‘rolled out of bed and looked up at the sky’ and ‘for personal reasons,’” according to the trustee’s filing.
The other two businesses that the trustee’s filing states the Vontrans mismanaged—JKBK and Yorkway Properties, the latter a separate company from Yorkway LLC—are related, though Vontran shed little light on what it is the two businesses do. JKBK is described as an “operating business, which Mr. Vontran was actively managing and from which he was receiving regular compensation.” The filing asserts that the Vontrans transferred JKBK’s assets to Yorkway Properties—a company in which they have a 25 percent stake— “for no consideration.” As for Yorkway Properties, the filing continues, “Mr. Vontran TWICE [capitalization in the original] indicated that he did not know who the owners of Yorkway Properties, LLC were,” then “testified that he did, in fact, know” who they were, but “declined to disclose them”—though he later acknowledged that they are his brother, his brother-in-law, and his mother. Vontran went on to say he formed Yorkway Properties for “no special reason” and would not say what business it conducts. “I haven’t decided what I’m going to do with it,” he testified, indicating that it “has never generated any income since its formation and does not have any assets.”
The Vontrans’ “failure and refusal” to “respond to questioning” and their “provision of inaccurate and incomplete information” to creditors, the filing argues, establish cause to convert the bankruptcy to Chapter 7 liquidation. On Oct. 25, the Vontrans consented to the conversion. Another creditors meeting is scheduled for Dec. 22, and the last day for parties to object to the Vontrans’ discharge as debtors is set for April 1, 2011.
In the meantime, in March an adversary case was filed in the Vontrans’ bankruptcy. It was brought by Frank Scarfield, a longtime Baltimore-area real estate developer and investor, who alleges Vontran engaged in fraud and false pretenses in setting up the financing to purchase from Baltimore County the Yorkway property that is now actively being developed. That case is scheduled for trial next June.
Among Scarfield’s dealings with Vontran was the sale of the old Seagram’s distillery to a Vontran company called VO LLC. The distillery property is adjacent to the Yorkway development, and Vontran has stated that he intends to develop it next. However, VO went bankrupt itself in January—halting at the last minute a planned auction of the distillery property—and in October the distillery property suffered a fire.
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