Scientology's Reed Slatkin


Judge puts Slatkin assets up for sale
100,000 shares of Earthlink stock on the block





The sale of bankrupt money manager Reed E. Slatkin's assets is starting.

On Wednesday, U.S. Bankruptcy Court Judge Robin Riblet in Santa Barbara approved the sale of Mr. Slatkin's Earthlink stock and other publicly traded securities.

A 100,000-share chunk of his Earthlink stock will be sold immediately, and there is a buyer ready to purchase his La Cumbre Country Club membership.

Within a few days, Mr. Slatkin's Hope Ranch home and other properties will be put on the market, said Sue Montgomery, a lawyer working with the court-appointed trustee to liquidate many of his assets.

"This is not a fire sale," she said. "We are seeking fair market value to maximize the returns to creditors."

Earthlink shares hit a 52-week high of $17.88 on July 23 but have since dipped to $15.47 on Tuesday. Mrs. Montgomery said in court that Mr. Slatkin, who resigned this year as an Earthlink board member, has more than 1 million shares of Earthlink stock. He also has stock in other companies but a full accounting of the value is not available.

Mr. Slatkin is not objecting to the liquidation of most assets. However, he is petitioning the bankruptcy court to exempt some property from sale. That includes his $4 million Hope Ranch home, a handful of life insurance policies, a 1998 Volvo coupe, $17,000 in clothing, household furnishings, jewelry and art, plus a couple of retirement accounts.

A court-appointed trustee is moving to sell many of Mr. Slatkin's assets and use proceeds to help reimburse creditors.

Mr. Slatkin is the subject of a federal investigation for allegedly defrauding investors through his unregistered investment advisory business for 15 years until he declared bankruptcy May 1. He promised investors annual returns of up to 60 percent, but creditors' lawyers suspect it was a Ponzi scheme in which early investors are paid with money belonging to more recent participants.

Although exactly how much is missing is still unknown, Mr. Slatkin owes perhaps 850 creditors an estimated $250 million and up to $539 million, but apparently has only $44.6 million in assets according to the first official accounting of his finances by the trustee, R. Todd Neilson. But Mr. Neilson said the accounting analysis is incomplete and admitted it may presently overstate the scope of debt.

Among Mr. Slatkin's assets are three country club memberships. A Santa Barbara resident is ready to buy Mr. Slatkin's La Cumbre Country Club membership for $140,000.

Mr. Slatkin has 10 properties worth more than $7,880,000, records show. These include his Hope Ranch estate at 4480-4484 Via Esperanza; 96 acres of undeveloped land north of Solvang in Ballard Canyon, worth an estimated $1 million; a two-story, 2,200-square-foot house at 890 N. Kellogg Ave. in Goleta worth $500,000; and an 1,800-square-foot house at 3125 Riley Road in Solvang.



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