Bankrupt Moriarty Assured of Nearly $1 Million
W. Patrick Moriarty, the bankrupt Orange County businessman awaiting sentencing on a number of political corruption charges, has a contract with the fireworks company he once controlled that will pay him nearly $1 million over the next nine years--even though he might be in prison.
Moriarty will be paid $150,000 this year and $100,000 annually for the following eight years by Pyrotronics Corp. of Anaheim, the company that was at the center of his fireworks fortune, a lawyer familiar with Moriarty’s bankruptcy case confirmed Wednesday.
James Stang, a law partner of Richard Pachulski, trustee in Moriarty’s Chapter 7 bankruptcy case, said his firm is looking into the agreement to see whether proceeds from the deal can be used to settle some of Moriarty’s outstanding debts.
The question is whether the proceeds from the agreement constitute pre- or post-bankruptcy earnings, Stang said. The law protects post-bankruptcy earnings from creditors, he explained.
Donald Crivellone, new chairman of Pyrotronics, said he would not have normally accepted the agreement, dictated by Moriarty as part of the sale of the firm, but added, the opportunity to purchase “a good company for a good price” was so beneficial that “I had no other choice.”
In any event, Crivellone said, he has no need for Moriarty’s consultation on business affairs and will not be calling on him for advice. However, a clause in the agreement that precludes Moriarty from competing with Pyrotronics in the fireworks business is helpful, Crivellone added.
The agreement specifically mentions the possible inability of Moriarty to render services to Pyrotronics due to incarceration and says he will be paid nonetheless, Stang and Crivellone agreed.
Moriarty has acknowledged debts of at least $11.5 million in the bankruptcy case.
In a separate action, he is scheduled to be sentenced in federal court here Aug. 26 on a variety of charges, including mail fraud, bank fraud, bribing politicians and laundering political campaign funds.
