A Grover Beach financial services owner accused of fraud after defaulting on millions of dollars in personal loans has filed for bankruptcy.
Al Moriarty, owner of Moriarty Enterprises, owes more than $22 million to creditors and dozens of San Luis Obispo County residents who loaned him money.
Moriarty filed for Chapter 7 bankruptcy Monday in U.S. Bankruptcy Court in the Western District of Washington, where he owns a home.
Nineteen separate civil lawsuits have been filed against Moriarty in San Luis Obispo Superior Court for unpaid payments on promissory notes.
Those claims, which vary in amount, allege fraud, elder abuse and breach of contract for not repaying loans as promised and a lack of required security licenses needed to make investments.
The bankruptcy filing will take precedence over those civil filings, resulting in the lawsuits being stayed until the Bankruptcy Court determines Moriarty’s assets and liabilities and distributes them.
In the Chapter 7 filing, Moriarty lists his assets as more than $3.7 million, all in property in the South County and Washington state.
Moriarty is seeking to keep his home in Bremerton, Wash., miscellaneous household and personal items, jewelry worth about $1,500 and three vehicles estimated to be valued at $21,000, including two Cadillacs and a Dodge Ram Van.
Other property that could be liquidated to pay his debts include a condo, a triplex, a single-family home and a commercial property in Grover Beach, a million-dollar home and land in Nipomo, and a condo in Washington.
Before Moriarty filed for bankruptcy, Kirby Gordon, his attorney, filed a motion in San Luis Obispo Superior Court in an attempt to consolidate the civil lawsuits to reach a settlement.
“We honestly tried to work out some kind of global settlement with everyone who had filed,” Gordon said. “That was truly our intent, or we would have gone to bankruptcy back in April when the first case was filed.”
It is not yet clear how much money those who are awaiting the repayment of loans varying from $25,000 to $500,000 might receive.
The case has been assigned to bankruptcy trustee Michael Klein in Bainbridge Island, Wash., through the Bankruptcy Court. Klein could not be reached for comment.
The first civil lawsuit against Moriarty, filed in April by San Jose attorney David Kraft on behalf of Floyd Cannon, was anticipated to go before a judge this month.
Moriarty failed to make the required $5,393 monthly payments to Cannon starting in January 2012 for a loan of more than $200,000 dating to 2010, according to the lawsuit.
“Now we have to start over in bankruptcy court,” said Kraft, who acknowledged that the chance of getting the full amount owed to Cannon is slim.