EDITOR’S NOTE: A list of Robert McLean’s creditors may be found at murfreesboropost.com.
Murfreesboro philanthropist Robert W. McLean earned less than $20,000 during the past five years but obtained $40 million in loans and borrowed $10 million, a bankruptcy trustee said Wednesday.
McLean, 59, died Tuesday of a self-inflicted gunshot wound to the head. He was scheduled to face his creditors Wednesday after an involuntary bankruptcy proceeding was opened against him in July.
Creditors sought $20 million in lawsuits.
Instead of McLean answering questions, Trustee Robert H. Waldschmidt outlined how McLean spent the loans he received and explained to creditors the chance of recouping their investments are “not real good.”
About 50 creditors and attorneys attended the one-hour hearing at the Customs House where the U.S. Bankruptcy Court is located in downtown Nashville. Many creditors gasped aloud when they heard McLean spent almost $49 million. Of that amount, $21.2 million was paid to lenders for interest on their loans.
Waldschmidt hopes to recoup some of the losses through the sales of McLean’s four houses, a condo, limousine, sports car, Jeep, musical instruments and personal property. Through discussions with McLean and a review of his computer and written files, Waldschmidt did not locate any hidden funds.
“The news is not good,” Waldschmidt said. “It’d be nice if we could find a pot of gold at the end of the rainbow.”
As the hearing began, Waldschmidt assured the creditors he will proceed with the bankruptcy claims.
Creditors must file proof of claims with the bankruptcy court by Dec. 26 to collect any of the assets.
The trustee began selling some of McLean’s assets, including stocks, vehicles and homes. His office on South Church Street will be auctioned Oct. 11 while his personal property will be sold Oct. 20 at the National Guard Armory in Murfreesboro.
He is considering actions against MTSU for the gift of Steinway pianos for the music department and against the Country Music Hall of Fame for the receipt of Mother Maybelle Carter’s guitar.
After being appointed trustee, Waldschmidt tried to unravel what McLean did with “your money.” He talked with McLean and reviewed his Quick Books computer program where every transaction was recorded. He’s also reviewing 10 years of written records before 2002.
During the past 5-1/2 years, McLean did not place new money in investment accounts.
“He has told me he earned no income during that period,” Waldschmidt said.
How the money was spent
The trustee described how McLean spent the money:
• Payments to lenders for interest on their loans, $21.2 million.
• Payments to lenders to pay or reduce principal, $3.1 million.
• Payments to banks, credit cards or other loans, $6.6 million.
• Payments to/for charitable organizations, $2.2 million.
• “Loans,” mostly for individuals, including support for MTSU students, $4 million.
• Payments for upkeep of his office, including payroll and expenses, $1.6 million.
• Payroll taxes, $1 million.
• Payments for mortgage and upkeep of six houses/condo, $1.1 million.
• Movie, “Our Very Own,” $1.3 million.
• Music equipment purchases, $1.5 million.
• Payments to Horace Nichols and/or his company, $3.6 million.
“The payments to Mr. Nichols are alleged (by Mr. McLean) to be a part of an investment, but there do not appear to be any contractual rights established by any documents to establish the nature or the extent of the investment,” Waldschmidt said. “Therefore, the trustee cannot conclude that Mr. McLean received any benefit from these disbursements.”
When asked about Nichols, Waldschmidt said he didn’t have any information about him because he could not locate him.
• Payments to his mother’s estate, $900,000.
• Miscellaneous other expenses such as flowers, gifts, limo services, pools, sky suites, tickets, dues, subscriptions, insurance and storage rent, $1 million.
None of the money was placed in investment accounts during the past five years although McLean did have minimal balances in several investment accounts.
Regarding McLean’s home in Stratford Hall in Murfreesboro and his vacation home in Destin, Fla., Waldschmidt said the residences may not have enough equity. Mortgage holders have asked for foreclosure due to lack of payment.
McLean’s house on Center Hill Lake is on the market with several prospective buyers looking at it.
None of the creditors wanted to make a statement during the hearing.
Questions from creditors
After the hearing, Waldschmidt perched on the desk and answered questions from attorneys and creditors.
Attorney David Kious, who represented some debtors’ interests, asked if McLean invested in the stock market.
Waldschmidt replied McLean explained he worked the stock market in the 1980s and 1990s but lost money in the stock market slide in 2001-2002.
“He lost quite a bit,” Waldschmidt said.
McLean set up several corporations in Las Vegas but Waldschmidt hasn’t tracked down one particular entity.
Since McLean’s death, the trustee’s office is reviewing 10 life insurance policies for possible collections.
At the end of the meeting, assistant Kim Turner asked creditors if they received mail from the trustee about their claims.
During the only light moment of the meeting, one creditor said, “I haven’t got my check.”
“It’s in the mail,” Turner replied immediately.
Lisa Marchesoni may be reached at 869-0814 or at lmarchesoni@murfreesboropost.com.
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