Andover state senator files for bankruptcy
03/06/2011 12:00 AM
03/06/2011 12:06 AM
A state senator who serves on the budget and banking committees has filed for personal bankruptcy.
Ty Masterson, R-Andover, lists more than $800,000 in unsecured debts, not tied to assets or collateral.
Often people filing bankruptcy are able to discharge those bills, which in Masterson's case include credit cards, commercial loans and debts to local businesses.
Masterson said most of the debts are from a failed business, MasterBuilt Homes, in 2006.
"But I personally guaranteed the notes, so I have to file it under personal bankruptcy," Masterson said.
Masterson said he liquidated his real estate holdings business to pay off debts when his construction company closed.
When the former state representative was running for Kansas Senate in 2008, he said he was working to pay off $150,000 in court-ordered judgments related to his businesses. His bankruptcy statement filed in December shows he owes nearly six times that amount.
Masterson said he forestalled filing bankruptcy for four years because he had tried to work out repaying the debts. But he said he couldn't reach agreements with two banks.
"It was solely due to the two banks' fairly recent decision to no longer work with me that I had to file to protect the others I am working with," Masterson said.
Masterson owes Corner Bank $209,000 and Emprise Bank $53,890 in commercial loans, according to his Chapter 7 filing. He also listed more than $160,000 in revolving credit card debt.
Rick Thompson, a Wichita lawyer representing Corner Bank, said the bank has a policy to not discuss cases in litigation.
Masterson also owes several local businesses, including $85,000 to Fisher Lumber of Garden Plain. Joe Fisher, the company's president, declined to comment.
In the Senate, Masterson serves on the Ways and Means and is vice chairman of the Financial Institutions and Insurance committee.
"I certainly hope Sen. Masterson is a better steward of the people's money than he is his own," said Ed Nazar, a Wichita bankruptcy lawyer who, as the case's trustee, represents the creditors.
Masterson said his failed businesses resulted from an employee charging unauthorized expenses and project mismanagement.
"I learned a personally painful but valuable lesson about having the proper accountabilities in place," Masterson said.
"Given the lessons I've learned, I will be more effective in my job."
Before being elected to the state Senate, Masterson was elected to the Andover City Council in April 2005 and appointed to fill a term in the Kansas House that October.
Masterson said he's tried not to play politics with his debt.
"Some people told me I should file this in Kansas City to keep it out of the press," Masterson said. "But I said, 'No, this is my home, and I'm not trying to hide anything.'
"If it costs me my seat, it costs me my seat."
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