Bankruptcy Judge Freezes Walters’ Home Sale Money

A federal bankruptcy judge on Wednesday froze the proceeds expected on the sale of a $1.8-million Indian Wells desert home by Jacqueline Walters, the wife of Silverado Banking, Savings & Loan figure Bill Walters.

The action by Judge John J. Wilson acknowledges that some of an estimated $21 million in property, cars and other assets that Jacqueline Walters holds title to may rightly belong to her husband’s creditors. But Wilson stopped short of a bankruptcy trustee’s request that Jacqueline Walters be prohibited from liquidating assets or spending beyond a court-approved allowance of $44,000 a month.

Bill Walters, a former business partner of Neil Bush who defaulted on more than $100 million in Silverado loans, gained national attention after testifying before a congressional committee last summer that he was broke even though he was dividing his time among a $1.9-million Newport Beach estate, the Indian Wells retreat and a $250,000 mobile home in Laguna Beach.

R. Neil Rodgers, the court-appointed bankruptcy trustee, claims that Walters tried to hide his personal assets while pleading poverty to creditors, and Rodgers has filed suit to recover the assets in Jacqueline Walters’ name. In Wednesday’s motion, Rodgers claimed that she is dissipating her estate.

Bill Walters has denied that he purposely moved money out of creditors’ reach.

From the sale of the Indian Wells home, Jacqueline Walters was expected to receive a $300,000 check today--representing a sale of personal property--with the remainder of the money to go to pay creditors.

Jacqueline Walters acquired much of her wealth shortly after her October, 1986, marriage to Bill Walters. Within 48 hours of the ceremony, as part of a prenuptial agreement, several property transfers were made.

Rodgers claims that Walters ultimately gave his wife title to the homes, six cars, a $7.6-million interest in a Colorado limited partnership, $1.7 million for real estate improvements, a $1.4-million promissory note and at least $884,000 in cash.

To support his assertion that the estate is being liquidated, Rodgers claimed in court documents that $138,000 had been wired from a family trust fund into Bill Walters’ private bank account between February and April of this year. Rodgers said another $540,000 has been missing from the bank account since January, 1990.

Robert Steiner, an attorney for Jacqueline Walters, said the trust fund had been set up by Bill Walters’ mother. “This is not an asset of Mrs. (Jacqueline) Walters,” Steiner said.

He added that Jacqueline Walters needs the $300,000 to pay attorneys’ fees and to support her children.

Before he decides whether to release the $300,000, Judge Wilson said he wants a full disclosure of Jacqueline Walters’ income and expenses at a hearing set for June 10.

Bill Walters was one of Denver’s highest-flying real estate developers, helping to reconfigure the city’s skyline while amassing a personal fortune.