Attorneys for Michael R. Mastro say they've lost contact with the bankrupt real-estate magnate and don't know where he is.
Bankrupt former Seattle real-estate magnate Michael R. Mastro and his wife, Linda, were ordered by a judge three weeks ago to turn over two giant diamond rings for safekeeping — and haven’t done so.
They’ve been found in contempt of court and fined. Bankruptcy Judge Marc Barreca has scheduled another hearing Friday to consider stiffer sanctions if they still haven’t complied.
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But Mastro’s lawyers say they can’t reach the couple, and don’t know where they are.
The Mastros apparently have moved out of the home in Palm Desert, Calif., where they have lived since last fall, James Frush, one of Mike Mastro’s attorneys, said Wednesday. The phone and fax numbers are inoperative, he said.
In a court filing Tuesday, Thomas Bucknell, Mastro’s lead bankruptcy lawyer, said he hadn’t been in touch with his client since July 1 — the date Barreca found the Mastros in contempt.
Bucknell said he no longer has an email address for Mastro, and doesn’t know if Mastro has received mail Bucknell has sent.
“Briefly stated, I am no longer in communication with Mr. Mastro,” Bucknell wrote.
“It seems like he’s gone,” said James Rigby, the court-appointed trustee charged with uncovering Mastro’s assets and distributing the proceeds to his creditors.
“I don’t know what to make of it … This isn’t a regular occurrence.”
Mastro, 86, a longtime real-estate developer and lender, was pushed into one of the state’s largest bankruptcies ever two years ago.
Rigby has estimated Mastro’s total unsecured debt at $325 million.
The two rings, which sport diamonds of 27.8 and 15.93 carats, are valued at $1.4 million.
They have been objects of a tug of war between the trustee and the Mastros since September 2009.
The trustee contends in a lawsuit that Mastro, before entering bankruptcy, transferred legal control of the jewelry and other assets to an offshore trust in an illegal maneuver to keep them out of creditors’ reach.
Another bankruptcy judge ruled last year that the rings were Linda Mastro’s separate property. But Barreca last month set that ruling aside and ordered the Mastros to turn the rings over to a Seattle jeweler until he makes a decision on their ownership.
The rings were supposed to be handed over June 22. After that deadline was missed, Bucknell said Mike Mastro had told him the rings were out of the country, but he would retrieve them and turn them over by July 1.
That deadline also passed, with no sign of the rings.
Bucknell and Frush asked Barreca last month to let them withdraw as Mastro’s lawyers. In a filing then, Bucknell said he hadn’t been paid for some time, and much of the litigation directly involving Mastro had pretty much concluded.
Mastro supported his withdrawal, Bucknell added.
In his filing Tuesday, Bucknell said his inability to communicate with Mastro made his withdrawal not just appropriate, but mandatory.
A hearing on the lawyers’ withdrawal requests is scheduled July 22.
Rigby said last month that he expected Mastro’s unsecured creditors would get their first distribution — a total of about $3 million — around the end of the year. The trustee is also suing various Mastro associates, seeking funds he says should be distributed among all unsecured creditors.
Frush, who has served as Mastro’s spokesman, said Wednesday he hasn’t been in contact with his client since June 22 — but also hasn’t tried to reach him since then. “I don’t know where he is.”
Rigby said he would continue to press for enforcement of the court order. One option, he said, is to ask a federal district-court judge to issue an arrest warrant.
“All he’s got to do is do what the court order says,” Rigby said.
Eric Pryne: 206-464-2231