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August 7, 2008

NEW: Court orders Rep. Terrill's bankruptcy case reopened

By M. Scott Carter

State Rep. Randy Terrill's 2005 bankruptcy case will be reopened, a federal judge ruled Thursday.

U.S. Federal Bankruptcy Judge T.M. Weaver - the same federal bankruptcy judge who originally ordered Terrill's discharge - issued an order at 11:05 a.m. Thursday, reopening the 2005 case.

Weaver - a bankruptcy judge for the Western Oklahoma District - had ordered a discharge of Terrill's debts under Chapter 7 of the Federal Bankruptcy Code March 2, 2006.

In Thursday's ruling, Weaver reopened the case and ordered the appointment of a trustee.

"It is therefore ordered... that the trustee's motion is sustained, this case is hereby reopened, and the court orders the appointment of a trustee herein," Weaver wrote.

Weaver noted that "no objections or responses" had been sent to the court.

"Said motion was filed July 18... notice was duly given to all parties appearing on the mailing matrix," the judge wrote. "The time for response to said motion expired on Aug. 5, and no objections or responses have been served or filed."

Weaver made the motion at the request of the original creditor's trustee, Edmond attorney John D. Mashburn.

In July, Mashburn filed a request to reopen the case after published reports alleged irregularities between Terrill's bankruptcy petition and his state campaign filings.

In that filing, Mashburn said state campaign reports showed Terrill had received funds from his campaign, which could be considered an asset.

Thursday afternoon, Mashburn said he had expected the judge to rule in his favor.

"I had been watching for it," he said. "It (Weaver's ruling) was not unexpected. Right now, I'm waiting for the reappointment of the trustee."

Mashburn said he expected Weaver to reappoint him to that position. "Yes, I do expect to be reappointed," he said.

While Weaver's order doesn't set aside Rep. Terrill's bankruptcy, Mashburn said the judge's order allows creditors to try and recover additional funds from Terrill's estate.

"The discharge is still there," he said. "The purpose of this reopening, as far as I'm concerned, is to try and recover assets, or what appears to be assets, of the estate."

Other actions, Mashburn said, would depend on why the case is being reopened.

"The trustee already has information to pursue an asset. If he needs more information, he can request information either formally or informally."

Mashburn said he expected other filings in the case to happen quickly. "There's not a given time frame," he said. "But I would expect something to be filed pretty quickly."

Terrill and his wife filed their Chapter 7 bankruptcy petition Oct. 14, 2005, less than a year after he was elected to the Oklahoma House of Representatives.

In July, Terrill downplayed the request to reopen the case, but attributed it to his political opponents.

"I don't mind the trustee taking a second look to make sure everything was done properly," Terrill said. "It's unfortunate ... that some ... are trying to damage me politically because of a family bankruptcy filing; I find it despicable that someone would exploit my wife's financial difficulties during college."

Previously, Terrill said he was confident a review of the bankruptcy case and all the documents related to it will find nothing wrong.

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