The Strange Tale of Terry Anderson, Ex-hostage and Bankruptcy Debtor
The story of journalist, professor, and ex-hostage Terry Anderson answers several questions you probably didn’t known you needed to have answered.
- Let’s say you are a reporter for the Associated Press and are held hostage by Islamic Militants for seven years at the close of the cold war. How much is that worth? If you’re Terry Anderson and the government responsible for your kidnapping enjoys massive oil revenue that is frozen in American banks, the answer is $26,000,000. (That would be $3.7 million per year; or, $10,176.12 per day of captivity).
- Let’s say you collect your $26,000,000. Are you safe from needing, eventually, to file bankruptcy? If you’re Terry Anderson, who filed bankruptcy in 2009, then the answer, sadly, is no.
- Exactly how long does it take one man to spend $26,000,000? In Mr. Anderson’s case, the attrition rate on $26M seems to have been approximately seven years. (Which, appropriately, is the exact length of time it took him to earn that money in the first place).
And while all this is no doubt amusing, it got us wondering: what would have happened if Mr. Anderson had filed bankruptcy in 2001, the year before he received his hefty (and well warranted) restitution from the Iranians? What ability would a chapter 7 trustee have had to pursue the Iranians himself, on Mr. Anderson’s behalf? While we have not yet had a client who was owed $26,000,000 by a foreign government (not including the regrettable number of clients we have had who were expecting large checks from various deposed, Nigerian royalty), we do periodically represent individuals who own land or other assets in another country.
Bankruptcy law is clear that the power of the trustee to administer assets of a bankruptcy debtor does not stop at the U.S. border. But what does stop is the trustee’s confidence that he will be able to convince a foreign government into cooperating with his right to liquidate that particular asset. The practical reality is that instead of the trustee attempting to sell a house in Indonesia, he will simply require that the debtor sell the asset himself and turn over the proceeds. A trustee may not have much sway over a court in Indonesia, but he holds a great deal of sway here in bankruptcy court.