AFP InDepth | Clearing up questions on Bell bankruptcy

The hard thing to reporting on a 25-year-old bankruptcy is being able to get to the facts of a matter in which there is a good bit of detail in terms of the initial bankruptcy filing but little more than what people remember on the back end.

That’s what I’ve run into in reporting on the 1984 bankruptcy of Dickie Bell, a four-term Staunton City Council member running for the 20th District seat in the Virginia House of Delegates.

I’ve scoured the Sept. 10, 1984, bankruptcy petition filed by Bell in relation to the failure of his Springhill Road grocery store, The Country Market, and talked at length with Bell, a representative of one of his creditors and several people unattached to the matter who have offered off-the-record business and legal expertise and insight into the bankruptcy process.

The first thing that becomes clear to me is that what I reported last week regarding what Bell’s creditors were repaid was inaccurate.




Here’s what Bell told me in an Oct. 12 interview on the bankruptcy filing: “We paid back everybody everything, either through payments after all this happened, or with collateral that we had there. Everybody got paid.”

Several commenters on the AFP story and also on blogs on the News Leader website pointed out the difficulties in the math to that end. The bankruptcy petition listed $162,378 in unsecured claims without priority beyond the value of his home, household goods, vehicles and the building that had housed The Country Market. Certainly it is possible that one could pay that amount of money back – consider that $162,378 in 1984 dollars is equivalent to more than $300,000 in 2009 dollars – but it doesn’t seem all that logical on its face.

I asked Bell to clarify in an e-mail exchange on Wednesday.

“It is my understanding that all creditors received something, although we were not given an accounting of that, and that’s what I meant to convey when I said everyone got paid,” Bell said in his e-mail reply.

“I suppose it is fair to assume that some creditors wrote off some debt, but I cannot confirm or deny that since we were given no final accounting of that,” Bell said.

“Obviously we did not hand over $162,000 in cash to pay off debts. I am sorry if that is the impression I gave you,” Bell said.

That does make sense, again based on my new understanding of bankruptcy law and procedure. This amount of money is a lot to you and me, but it’s small potatoes in the grand scheme of things bankruptcy-wise, and it is fairly common that creditors simply write off debts in cases where there’s no collateral to go after and thus little or no expectation of a return of monies.

But that said, it’s fair for me to point out that “(i)t is my understanding that all creditors received something, although we were not given an accounting of that, and that’s what I meant to convey when I said everyone got paid” and “we did not hand over $162,000 in cash to pay off debts” is a different story from “(w)e paid back everybody everything, either through payments after all this happened, or with collateral that we had there. Everybody got paid.”




It’s also fair for me to point out that Bell should be given some leeway again given the time that has passed and the lack of corroborating paperwork. What is known about the dispensation of the ’84 bankruptcy is what Bell and his creditors remember, largely, and memories can soften or harden over time, depending on perspective.

How much leeway Bell should be given is a matter of perspective. One reader e-mailed me to say that he felt sorry for Bell that the issue had come up because Bell had paid back his debts; another brought up a similar point and offered the view that the reporting on the matter came across as a “smear.” Bell himself in our first interview last week used that same terminology. “I don’t like that it’s come up. It’s unfortunate. When these kinds of things come up, it’s always an effort to smear somebody. And I feel like the way we handled it and the things we did, we shouldn’t be smeared for it,” Bell said.

Intentional or not, Bell’s recollection that “everybody got paid” clearly mitigated whatever sting there could have been to Bell from the story in the context of his run for the 20th District House seat. With politics hanging over this story in the shadow of the Nov. 3 election, it’s worth exploring the contention of Bell’s political critics that there is a relevance to his bankruptcy filing in the context of Bell’s positioning as a fiscal conservative who believes in limited government.

As one critic put it in a conversation with me this week, “How can he preach limited government when he was the recipient of a big-government bailout in the form of bankruptcy protection? I wonder if his creditors think he’s fiscally conservative.”
I put the issue to Bell, who thinks he learned some valuable lessons as a result of his experience.

“Most small, independent businesses are operating on a shoestring, at least for the first four, five, six years that they’re in business, and you’ve got to do things to support them in order to survive,” Bell said.

“Small business accounts for three-fourths of our jobs, and we have to be sensitive to things that we can do. Government can’t fix everything. Government can’t make up for bad business decisions or situations that come up like in our case. But the one thing you can do is create an environment where people can keep doing this,” Bell said.

“The government’s role is to create a friendly regulatory environment, keep taxes and fees where businesses can afford to pay them, and also at the same time expand their business and create jobs, and then government needs to get out of the way. And that’s what I’ve kind of tried to do as an elected official, is just not overdo it,” Bell said.




This one’s tough for me, because I can see both sides. Bell’s critics have a point that it can come across as hypocritical for him to preach limited government and fiscal-conservative management given the fact that he ran a small business into massive debt and eventual bankruptcy. There’s a certain amount of “Do as I say, not as I do” to that that can be uncomfortable when you think about it.

On the other hand, it’s not that Bell did anything illegal, one, or two, that he did anything any other small-business owner hasn’t had to think even briefly about at some point in the run of their small business, given the cyclical nature of the business world, the ups and downs, the troughs and valleys.

A small-business owner myself, I know well that running a small business is like riding a roller coaster backwards in a tornado. And that there isn’t a person in business today that doesn’t tell me that times are tight, that they’re not worried and fretful for the future, that something as simple as a tax deadline or bump up in price of something in their supply chain or an outstanding invoice not coming in on time might push them to the edge.

Me, personally, I tend toward the claw-your-way-out-of-it route, but I’m not sure that there’s anything necessarily morally right or wrong either way.




Where does this leave us in the end? We’ve cleared up the issue as to whether or not Bell’s creditors were paid back in full. They weren’t, as Bell acknowledges. Bell’s critics think this should effectively disqualify him from seeking or at the least being elected to the House of Delegates. Bell cites these criticisms as evidence of opponents trying to smear him politically.

It’s hard to say that something that is factually correct is a smear. It’s also hard to say that a 25-year-old bankruptcy is or isn’t relevant to an election campaign.

I’m usually one who will tell you exactly what I think is right or wrong on a particular issue of the day in no uncertain terms. On this one, I’ll leave it to you to decide for yourself.


– Story by Chris Graham



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