Toby McKenzie Says He Is Ready To Again Manage His Businesses

Seeks Removal Of Trustee Steel; Cleveland Businessman Changes Lawyers

Tuesday, August 11, 2009

Cleveland, Tn., businessman Steve "Toby" McKenzie, who in February said he was too ill to continue to manage his huge estate that had gone into bankruptcy, now says he has recovered enough to take back over.

Mr. McKenzie, who filed a $151 million bankruptcy last December, has also switched attorneys. Kyle Weems, a bankruptcy specialist, has been replaced by Richard Banks.

Attorney Banks said in a court filing, "The medical problems of McKenzie have been stabilized and substantially resolved. Medical testimony, if necessary, can be presented at the hearing on this motion establishing that Toby McKenzie can act as a debtor-in-possession."

He said Trustee Steel has not filed a plan in the case, not stated why he has not filed a plan, and has not recommended conversion of the case to Chapter 7 (where the remaining assets are liquidated and there is no plan for ongoing operation of businesses).

Attorney Banks said, "Toby McKenzie and his wife, Rebecca McKenzie, respectfully submit that it is in their best interest, the best interest of creditors, the best interest of this estate and the best interest of present employees of these two entities (including several past employees covered by the major medical insurance policy owned by Sam Management Company LLC and funded by Villages Lanes LLC) for the debtor to be restored to the status as debtor-in-possession of these two entities."

He said Mr. McKenzie has obtained a commitment for funding "necessary to hopefully re-organize the finances of Village Lanes LLC. The revenue generated from the Village Lanes will generate future income for Toby McKenzie to be used to fund a Chapter 11 plan."

A hearing in the motion is set in Chattanooga Bankruptcy Court on Thursday at 10 a.m.

Judge Tom Stinnett is overseeing the case.

Meanwhile, Trustee Steel asked the court to allow one of Mr. McKenzie's properties - the Hampton Creek golf course and development at Ooltewah - to remain open.

Northwest Georgia Bank has filed a lien on the property, citing a $100,000 loan.

The motion says Mr. McKenzie owns the property where about 12 of the holes of the 18-hole course are located. It says he leased the land where the remaining holes are from Ellsworth McKee.

Trustee Steel said Hampton Creek Development recently entered into a contract to sell the remaining property at the site to the entity that acquired 51 residential lots. That deal closed in June.

Mr. McKenzie became wealthy in the rent to own business and as a pioneer in the lucrative check cashing business, then ventured into real estate, trucking and other businesses.

McKenzie Arena at UTC was named for Mr. McKenzie and his former wife, Brenda, after they gave a large gift to help pay off the debt on the former Round House.


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