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Federal Court Dismisses Arnold Smith's Bankruptcy

Friday, March 3, 2017, 1:30 pm News Flash Archive

Yesterday, Federal bankruptcy Judge Edward Ellington signed an agreed order dismissing Dr. Arnold Smith's chapter 11 bankruptcy after Smith failed repeatedly to file the required schedules and plan to move the case forward. Judge Ellington's order, which was agreed to by the parties, may be seen here: Order of Dismissal.

Smith's attorney had already asked for and received three deadline extensions, claiming the last time that Smith was about to be released from the State Mental Hospital and that he needed to consult with Smith before submitting the required schedules and plan. The Taxpayers Channel report on this request may be seen here: Court filing suggests Arnold Smith may soon be released from Whitfield.

On January 30, 2017, the bankruptcy trustee filed a motion to either dismiss Smith's bankruptcy, or convert it to Chapter 7 liquidation. His motion may be seen here: Motion to Dismiss Bankruptcy.

Dr. Smith was indicted for conspiring to murder Greenwood attorney Lee Abraham back in 2012. During a shoot-out at Abraham's Market Street office, investigators from the Attorney General's office shot and killed Keaira Byrd and wounded Derrick Lacy. Video later emerged which showed Dr. Smith instructing Byrd to shoot Abraham right between the eyes.

But the criminal case against Smith ground to a halt when Circuit Court Judge Breland Hilburn ruled that Smith was incompetent to stand trial, on account of his psychotic delusions of a persecutory nature. Smith was then committed to the State Mental Hospital at Whitfield where he remained until he was transferred last November to Pine Grove, a private psychiatric facility.

Meanwhile, Abraham's civil lawsuit against Smith, for conspiring to have him killed, was stalled by Smith's bankruptcy proceeding, which was widely viewed as an effort to frustrate Abraham's day in court. The bankruptcy trustee asked the court to dismiss Smith's bankruptcy back in 2015 because, he claimed, Smith was not actually bankrupt. It turned out that Smith claimed $10 million in assets, and only $250,000 in liabilities. The bankruptcy trustee's claims of Smith's bad faith were reported by The Taxpayers Channel here: Trustee Claims Arnold Smith Bankruptcy Filed in Bad Faith.

Abraham's suit was put back on track in March 2016 when Federal District Court Judge Debra Brown sent it back to state court for trial. See Federal Judge sends Abraham v. Smith back to state court for trial.

Abraham's case against Dr. Smith is set to go to trial this month.

John Pittman Hey
The Taxpayers Channel

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