Claremont Insider: Bankrupt

Monday, November 21, 2011


City Council meets tonight in closed session to discuss the upcoming vacancy in the City Manager billet when CM Jeff Parker departs for Tustin, a 15 percent raise, and that much fatter pension when he retires.

Since the discussion will take place in closed session, we assume it will cover more than simple issues of process. In fact, Friends of Tony Ramos--including Jeff Parker and Mayor Sam Pedroza--are already in print pushing his candidacy.

Tony Ramos, from a Claremont Courier photo

"...A perfect fit for this community", Parker is quoted in the Courier [Saturday, November 19]. The Courier goes on to write, "Mr. Ramos is the 'natural candidate', according to Mayor Sam Pedroza." We hear there is quite a bit of lobbying going on behind the scenes.

The Courier goes on to address, obliquely and in the most genteel way, how "[c]ouncil would not comment on Mr. Ramos' personal bankruptcy filing last March and how that might affect his fiscal responsibilities as potential city manager. " Councilmember Nasiali is quoted, somewhat breathtakingly, that "bankruptcy is a personal matter, but I don't see that as having to be intermingled [with his potential responsibilities as city manager]."

As is frequently the case, the Courier is a bit behind the times. Not only did Ramos file for bankruptcy last winter (the case was heard in March and dismissed for reasons that don't appear in the public written record), but he re-filed again in May 2011. This second petition proceeded without serious apparent impediment through the summer (it was amended somewhat on July 15) and Ramos was adjudged a Bankrupt--if that is the term--under Chapter 13 on September 23, 2011.

While we don't agree at all with councilmember Nasiali, who erects an imaginary Chinese Wall between a person's private integrity and public integrity, we have purposely stayed away from the Ramos matter on this blog because it was--well--kind of distasteful to us. The Insider has received several emails asking, in sum, "what's the story on Tony Ramos' bankruptcy?" And, we have received numerous emails over the past six months pointing out certain facts, issues, and angles to the story.

Almost all of the documents relating to the Ramos bankruptcy are public records at the bankruptcy court in Riverside.

It's Hard to Struggle by on an Income of $170,000 Per Year

Ramos' May 9 bankruptcy petition is essentially similar to his first one a few months earlier. It appears to have a bit more backup information.

(Use the controls under the window below to view the document)

Ramos Second Bk Eleven Documents

It shows a current monthly income of $14,282, annualized to $171,384. This is well over twice the relevant median family income for a California household of 4 ($78.869 from DOJ website). Still, $170K doesn't go as far as it used to although a lot of people would probably think they could scrape by on that.

Ramos' list of debts is noteworthy. It's not always possible to determine the time period exactly when these were incurred, but the list alone is rather daunting:

  • City of Claremont, 557 Loan, $2287
  • F&A Credit Union, auto loan on 2006 F150 truck, $13,208
  • Specialized Loan Services, 2nd lien on home taken in 2005, $148,000
  • Toyota Motor Credit, 2009 car loan on Camry, $19,614
  • Wells Fargo, 1st mortgage on home, $457,308 (home value est. at $440K)
  • IRS, 2008 Tax Debt, $3592
  • ACS/CLC College Loan, educational, $1835
  • Bank of America, credit debt, $6493
  • Calvary Portfolio Svcs, collection agency for GE Money Bank, $11,533
  • Capital One, credit debt, $2303
  • Capital One (another acct), $4335
  • Chase, $5415
  • Chase (another), $3498
  • Chase (yet another), $4494
  • Collection Consultants, collection agency for Bear Valley Comm. Hospital, $1094
  • Discount Tire, 2006 credit card (sweet wheels on some vehicle...) $1391
  • Diversi[fied] Col[lections], collection agency for college loan, $2000
  • Dr. Altwin, 2010 visit, $377
  • Dscvr/glelsi [sic], educational,, opened 8/11/08, $2217
  • Firstar, auto lease, $5152
  • GEMB/Mervyns, $452
  • Household Bank, credit card debt, $196
  • Household Credit Services, credit debt, $2033
  • Inland Valley Anesthesia, 2010, $519
  • Inter Community Medical Center, 2010 medical bills, $457
  • Kohls/Chase, credit card, $1261
  • Lowes/MBGA, last active 3/19/2009, $8497
  • National Credit Adjust, account HSBC, $4321
  • Nordstroms, $4456
  • Premier Family Medical, $67
  • US Bank, $1102
  • US Bank (another), $5152
  • Wells Fargo Financial Bank, credit card, last active 3/27/2009, $890
  • WFFNB, credit card, $3764

Simply put, Tony Ramos owes money, as the Dude said about Bunny in The Big Lebowski, all over town. The bankruptcy petition shows a couple of judgments against Tony for breach of contract.

That is not all. Apparently the Ramos household decided sometime last Fall or Winter to adopt bankruptcy as a business model. Tony's domestic partner filed for Chapter 7 bankruptcy in October and it was granted, relieving him of $40-some thousand in debt, as close as we can make it. This discharge of debt occurred in March.

Chapter 7 is the "you can't get blood out of a turnip" chapter and Tony's domestic partner was able to show virtually no income against large monthly expenses. Thus, his dischargable debts were made to go away.

Tony Ramos filed under Chapter 13 because of his disposable income. His 60-month repayment plan is as follows:

The amount of each monthly plan payment is $2125 for months 1 to 35. For months 36 to 60, the monthly plan payment is $2218. The due date is the 9th day of each month. The plan provides for the payment of 30% of allowed claims for general unsecured creditors.

This is a base plan with the debtor paying at least $129,825 of disposable income in the Plan. The debtor shall submit statements of income on an annual basis to the Trustee, which income shall be reviewed by the Trustee who may petition the court to increase the monthly plan payment for cause until such time as all allowed unsecured creditors, to the extent they are to be paid during the term of the Plan, are paid 100%

Without working knowledge of the details of bankruptcy law, it is a little hard to parse just how much debt is actually discharged. It also depends on the details of payments into the plan over the next 5 years. A good guess, subject to refinement, is a couple hundred thousand dollars.

In total, the Ramos household has discharged debts in the past year totalling--what?--nearly a quarter million dollars, plus or minus.

We assume, though there is no documentation in the Court record, that Tony has duly reported his 5% raise granted by Jeff Parker last August. Such reports would be between him and the Bankruptcy Trustee.

(There is an interesting addendum to this in the court documents. On October 12, three days after the first payment to the Trustee was due, the Trustee petitioned the Court for an order dismissing the bankruptcy in re: Anthony Ramos. The grounds are stated: "This motion is based on the following grounds: material default by the debtor with respect to the term of the confirmed plan by failing to make payments according to the plan (11 U.S.C. 1307(c)(6)."

So, immediately after getting a favorable judgement, Tony Ramos failed to make the first payment deadline. (It should be noted, on October 25 the Trustee moved to withdraw the above motion, so presumably Tony ponied up.)

Why rehearse these dreary facts?

The question is this: Is this the kind of person Claremont wants as its City Manager? We've heard several "justifications" for considering Ramos from people who should know better. First, "rather the crook we know than the crook we don't know; there are all kinds of crooked city managers out there and you really don't want them." Second, "If Tony knows we know, he'll be more likely to stay on the up-and-up." And finally, winning the sympathy vote, "Tony needs the City Manager job or he won't be able to pay off his creditors."

These justifications, while given with all earnestness, sound silly. The City Manager is a role model, like it or not. How can Ramos have any moral authority with any employee, stakeholder, or group with a record flagrant with irresponsible management of his own finances as outlined in the court documents? And what about his propensity to cut corners, shave the rules or norms for Tony's benefit? (there is a statement buried in the court documents explaining away Tony's failure to keep up with his mortgage payments to the tune of some $18,000. He apparently didn't think he had to pay them when he had filed for bankruptcy.)

Would the City Fathers (they are all men, now) actually consider giving him a City credit card? And what about somebody, somewhere, who might have something they could hold over Ramos--a misstatement someplace, inadvertent or not. Really. This guy couldn't hold the lowest level security clearance because of the ripe possibility of being susceptible to extortion.

We don't necessarily begrudge a person caught in a financial bind not of his making. That's why we have bankruptcy laws instead of debtors' prisons. From appearances, though, Ramos' problems are entirely of his making, starting long ago and continuing over years. (For example, he's not really that underwater on his house. He owes $476K on the first and values it at $440K. The problem is the $148,000 plus he took out of it in 2005 and owes now as a second trust deed. Where did that go?)

Make no mistake. Tony Ramos' entire situation is the responsibility of one Tony Ramos.

Maybe in the current situation, Parker is right when he says Ramos " the perfect fit for this community." And the Mayor is right when he says, Ramos is the "natural candidate". Maybe to lead the City into bankruptcy, the town needs someone with first-hand experience.

* * * * *

The documents here are a matter of public record, available at the website Registration and a credit card is required, though the document viewing costs is a nominal 8 cents per page. Even that is waived unless the download count is really large. The court is the U.S. Bankruptcy Court, Central District, ECF. Court rules require that addresses and SSANs be redacted in subsequent publication.