When Nathan Deal filed personal disclosure statements in the U.S. Congress, he described himself as a “partner” in a “family business” with his daughter and son-in-law.
When Carrie Deal Wilder and her husband, Clint, filed a bankruptcy petition last year, however, they described themselves as the “100 percent stockholder” of Wilder Outdoors, the sporting goods store they opened in 2006 in Habersham County. Her father, by then a candidate for governor, was mentioned nowhere in documents the couple filed with the U.S. Bankruptcy Court in Gainesville.
The bankruptcy proceedings allowed the Wilders to walk away from the business, debt-free. It left Deal and his wife, Sandra, with millions invested, and lost, in Wilder Outdoors.
Over the past week, Deal has framed his financial situation as the result of a father and a mother helping a child. In a news conference and in an e-mail message to supporters, Deal said the hardships caused by Wilder Outdoors’ collapse help him relate to Georgians’ struggles through a long economic downturn.
Documents examined by The Atlanta Journal-Constitution suggest, however, that Deal’s role in the failed business went beyond that of simply a co-signer on a series of business loans.
It also is clear that the omissions in the Wilders’ bankruptcy filings — whether inadvertent or intentional — insulated Deal from political fallout during a hard-fought Republican primary campaign. The Wilders declared bankruptcy in July 2009, two months after Deal launched his campaign for governor.
As first reported last week by the AJC, Deal lost his initial investment in Wilder Outdoors – about $2 million, according to campaign aides – and is personally responsible for a nearly $2.3 million loan payment that is due Feb. 1. To pay that debt, Deal and his wife are trying to sell their home in Gainesville, as well as the Habersham County site of Wilder Outdoors.
The debt, however, exceeds the net value of all the Deals’ property and other holdings, financial disclosure statements indicate.
In an interview Monday, Deal said that when he invested in Wilder Outdoors, he did not know his son-in-law had previously declared bankruptcy. Clint Wilder did not disclose that 2001 bankruptcy in the 2009 filing, an oversight that could invalidate the proceedings.
A spokeswoman for the federal bankruptcy trustee would not comment Monday on whether it is investigating the omission of Clint Wilder’s previous bankruptcy.
Deal said Clint Wilder had good financial credentials, including a degree from Emory University, a master’s in business administration from Tulane University and job experience with BearingPoint consultants.
“He has been a good husband to my daughter. He’s been a good father to my youngest grandson,” Deal said. “He had the criteria and the credentials, and he’s a fine person. I did not know [about the earlier bankruptcy] at the time, and things are as they are.”
“Anytime you start a small business, you know there are risks and gambles you take,” Deal said. “We felt like considering the time frame when it was initiated that it was a reasonable undertaking. But obviously there are many circumstances over which nobody had any control. But I never regret helping my children.”
The Wilders’ bankruptcy forms the nexus for financial problems plaguing Deal in the final weeks of his campaign against the Democratic candidate, former Gov. Roy Barnes, and Libertarian John Monds.
Deal’s stake in the company, he reported in congressional disclosures, was worth between $250,000 and $500,000. He listed the site of Wilder Outdoors as an asset worth between $1 million and $5 million — offset by loans in the same range that he had guaranteed for the business.
As late as January 2010, in an amended disclosure for 2008, Deal still listed himself as a partner in Wilder Outdoors, and still claimed the property was worth $1 million to $5 million. He did not disclose the size of the loan against the property, however. “Sandra and I,” he wrote, referring to his wife, “guaranteed the bank note [loan].”
On a state financial disclosure filed in June, covering 2009, Deal reported $2.1 million in “contingent liabilities” that apparently referred to the Wilder Outdoors debt. The disclosure does not mention the bankruptcy proceedings — completed the previous November — that left Deal and his wife solely responsible for the debt.
When Deal’s daughter and son-in-law incorporated Wilder Outdoors in January 2006, they listed no corporate officers other than themselves. It is unclear how much of a stake in the business was accounted for by Deal’s investment.
In his tax returns for 2006, 2007 and 2009, Deal claimed business losses totaling about $308,000, according to documents he released earlier this month. Deal did not release complete tax returns that would show how the losses occurred, but campaign aides recently attributed them to the Wilder Outdoors investment.
In 2006, Deal paid just $5,575 in federal income tax on $188,000 in gross income, the documents showed. In 2007, with a gross income of about $205,000, Deal’s federal taxes totaled $2,068.
When Wilder Outdoors went out of business in March 2009, it left behind about $336,161 in business debts in addition to its loan with Community Bank & Trust of Cornelia, bankruptcy records show. Those debts were not secured by collateral.
Jack Williams, a professor at Georgia State University and a bankruptcy professor, said the Deals would face no liability for Wilder Outdoors’ unsecured debts. The Deals could have been listed as creditors themselves, Williams said, although in an unsecured position as guarantors of the loan.
Many of the creditors supplied goods for the business: outdoor clothing, shoes, firearms, camping gear. Three companies sued the Wilders in Habersham County Superior Court. For instance, The North Face, a manufacturer of outdoor clothing, sought repayment of $43,690 in unpaid bills, along with $2,089 in interest and $4,603 in attorneys’ fees, court records show.
Like the others that sued, the company won a judgment against the Wilders – but collected no money.
In November 2009, U.S. Bankruptcy Judge Robert Brizendine in Gainesville discharged the Wilders’ debts, leaving them with few assets, primarily a home in Marietta. Nothing was left for the creditors.
“There is no property available for distribution from the estate,” trustee Paul Rogers reported to the judge, “over and above that exempted by law.”
Staff writer J. Scott Trubey contributed to this article.
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