Judge Finds Ex-Redman Receiver in Contempt

A judge on Thursday found the former overseer for the scandal-plagued Marshall Redman real estate holdings in contempt of court for failing to provide audited accounts of cash and property and for ignoring an order to appear.

With a stern warning that a jail cell awaits him if he continues to delay, Los Angeles Superior Court Judge Robert H. O’Brien declared receiver Donald W. Henry in contempt of court and set a Dec. 31 appearance date for Henry to account for his 19-month stint as receiver in the Redman land fraud case.

Under Henry’s tenure, prosecutors allege, the Redman receivership came to a virtual standstill, leaving about 1,500 alleged Redman victims in limbo. The 50-year-old Calabasas resident was fired last November, amid allegations he had solicited kickbacks from a receivership attorney, overbilled the receivership and failed to provide a regular accounting of his expenditures, court records show.

Redman’s three companies were seized in 1994, and the millionaire developer was criminally charged last May after authorities alleged he had used questionable tactics to sell undeveloped desert property to unsophisticated Latinos.

Henry was appointed by O’Brien in April 1994 and managed to clear title for only a handful of Redman customers before he was fired, prosecutors said.

The former receiver, who was also asked last year to resign his post as federal bankruptcy trustee, reportedly left the country for Australia in June.

On Thursday, O’Brien expressed his displeasure that Henry had missed several filing deadlines on an audit of his activities as Redman receiver and that he had failed to appear in court as ordered last month.

“Why shouldn’t I hold him in contempt and direct sheriff’s deputies to go wherever he is in the world and bring him back?” he asked Henry’s personal lawyer, Gary Byron Roach. “We’re already well into October and my time and patience are dwindling.

Roach told O’Brien that Henry was reportedly ill and receiving treatment and would be back in the country within 60 days.

“We’re not working on Mr. Henry’s schedule,” the judge said. “He faces an indefinite stay in jail until those reports are produced. We want him now.”

Deputy Los Angeles City Atty. Fay Chu, who along with Kern County prosecutors brought the 1994 civil lawsuit against Redman resulting in the receiver’s appointment, was not surprised by the judge’s ire.

“The court has given Mr. Henry a lot of leeway and now it is time for him to show up for an accounting,” she said. “So far, Mr. Henry has delayed the court with excuses. And it’s come time that the court says it will not tolerate any more excuses. And that is good.”

Henry’s potential legal problems extend beyond the Redman case.

U.S. Trustee Marcy Tiffany said Thursday that officials have recently finished an internal investigation of Henry’s activities in more than 250 cases in which he served as a trustee. In February 1995, Tiffany suspended Henry from receiving new bankruptcy cases after officials found numerous irregularities that included “charging excessive expenses and utilizing personnel in a way that was not appropriate.”

Tiffany said Thursday that her office is still investigating.

“We’ve found that a vast majority of the cases with which Mr. Henry was associated are OK, which is not to say they were well administered, or were moved along as fast as they could have been,” she said.

“We have suspicions with how some trust funds were handled. While we can’t say with any conclusiveness there was no loss to any of the estates, it doesn’t appear that there are. But we’re still looking.”