Correra bankruptcy called bid to dodge legal action
SIC wants investment scandal suit to advance
The State Investment Council is contending that Marc Correra, one of the main players in New Mexico’s multimillion-dollar investment scandal, filed for bankruptcy earlier this year to thwart the state’s legal actions against him.
The SIC is asking federal Bankruptcy Court in Dallas to allow its lawsuit against Correra to proceed to trial late this year, as scheduled.
Correra, who shared in more than $22 million in “finder’s fees” for helping financial firms get millions of dollars in state investments during the administration of Gov. Bill Richardson, filed for bankruptcy in Texas shortly before he was scheduled to testify in the state’s lawsuit.
In court filings, the SIC claims “the timing of this Bankruptcy Case suggests the
Debtor (Marc Correra) and his father have been improperly thwarting the NMSIC’s rights to discovery in the pay to play action — a significant abuse of the bankruptcy process.”
The SIC’s civil lawsuit names Correra and his father, Anthony Correra, a close friend, adviser and political fundraiser for Richardson. The lawsuit accuses the elder Correra of abusing his position as an unofficial adviser to the SIC and Richardson, allowing his son to share in millions of dollars in fees paid by financial firms chosen to get invest- ments from the SIC. The SIC is seeking return of all fees paid to the Correras and other monetary damages.
Marc Correra is one of the main defendants in multiple civil lawsuits filed by the State Investment Council, Educational Retirement Board and two Fraud Against Taxpayers Act lawsuits filed by Frank Foy, former chief investment officer for the teachers’ pension fund. Foy’s lawsuits were the first filed, but the cases have been tied up in the courts for years.
A filing in federal Bankruptcy Court usually brings a halt to all civil lawsuits against the person seeking bankruptcy protection or liquidation.
The SIC argues that its lawsuit, scheduled to go to trial at the end of this year, will resolve many of the issues that face the Bankruptcy Court.
Both Marc and Anthony Correra refused to appear to give sworn testimony in the SIC’s lawsuit after the bankruptcy petition was filed.
The SIC argues that Anthony Correra has no right to refuse to give a sworn deposition just because his son filed bankruptcy and point out that Marc Correra didn’t provide much of the financial information contained in the Bankruptcy Court filing when ordered to produce that information in the state’s lawsuit.
Marc Correra estimated his assets at between $1 million and $10 million earlier this year.
According to the bankruptcy documents, in 2014 and 2015 Marc Correra transferred $3.7 million to his father’s accounts as repayments for loans.
He also claims to owe his father an additional $1.5 million.
In the initial bankruptcy, Marc Correra estimated his potential liabilities at up to $500 million but didn’t include the additional $1.5 million owed to his father.
Correra said that his assets were tied up in his divorce proceedings for several years and that his parents were paying his bills, including legal bills. He said that he has not worked since 2009 and that financial firms that owe him money have refused to pay since the investment scandal became public.
He testified in the bankruptcy proceeding in late March that once his assets were freed up after his divorce he began paying his parents back.
“Finally when the divorce was settled, the funds were released, and then at that point I was able to repay the loans,” Correra told the bankruptcy trustee earlier this year.
Documents also show more than $4 million set aside in IRAs and accounts for his two children.
Correra said that his parents still are paying his bills and that those bills continue to climb, including legal fees.
He testified that he paid his wife more than $4 million in the divorce settlement, that his children now live in Paris and that his parents pay for their private schooling.