The Chapter 13 petition adds to a growing list of court cases involving Thomas, best known in Chicago as an FBI informant who carried a wire about a confidant of former Governor Rod Blagojevich. An office building that a Thomas Partnership owns in St. Paul is in sequestration. A Indiana Mall owned by another company Thomas is bankrupt. And a bankruptcy trustee in a separate case accused Thomas and a partner of embezzling $2.8 million from a South Side mall in a way that constitutes theft or embezzlement.
A personal bankruptcy filing could offer Thomas a way to extinguish his business debts. But that clashes with the rags-to-riches redemption story he described in a mid-February interview with Crain’s, when he said he was worth $150 million.
Thomas said he had next to nothing when he was released from federal prison camp in Duluth, Minnesota in 2017. He was serving time there after pleading guilty to charges of stealing more than $370,000 in public funds to a marina development in the southern suburb of Riverdale.
It was his first trip to prison but his second conviction. After pleading guilty to a billboard rental scam in New York, Thomas was put on probation in 2010, his reward for helping federal prosecutors in Chicago convict Antoin “Tony” Rezko, a close associate of Blagojevich. , and former Ald. Isaac “Ike” Carothers.
After prison in 2017, Thomas embarked on a series of acquisitions that included an Aurora apartment building, a shopping mall in Elkhart, Indiana, and the former Sherman Hospital in Elgin. With a new wife and a young son, he said he was a changed man whom lenders and investors could trust. Asked about recent lawsuits and bankruptcy cases, Thomas, director of the Chicago-based Freedom Development Group, said he was confident he could resolve them, possibly by selling the affected properties and using the proceeds to pay off debts.
“I’m not cash rich,” Thomas said in February. “I am rich in assets. »
His bankruptcy record tells a different story. Thomas, effusive in February, wouldn’t say much about the recent filing. In brief text messages, he said the matter “was being withdrawn” and had “nothing to do with finances”. He did not respond to a follow-up message requesting an interview.
The 17-page petition is short on details. In addition to listing assets of $0 to $50,000, the filing estimates Thomas’ liabilities at just $500,001 to $1 million. He only mentions one creditor: his ex-wife, Lori Korwek Thomas, who has a claim of $650,000 against him.
“That was the impetus for the case,” says Jeffrey Harris, the local attorney representing Thomas in the bankruptcy case.
Harris said he was unaware of the nature of the complaint against Thomas, saying only that he believed it was related to the separation of the couple’s assets following their divorce. Lori Korwek Thomas declined to comment and her attorney did not return a phone call.
Surprisingly, the Chapter 13 petition reveals nothing about Thomas’ business and real estate creditors. He indicates that his debts are mainly consumer debts, not commercial debts, and that no creditor has debts secured by his property.
Thomas owns interests in several commercial properties through limited liability companies, a common practice in the industry. For some of the companies, Thomas has guaranteed repayment of debt in the event of mortgage default.
Of all his recent investments, Sherman Hospital may have been the best. A Thomas Company acquired the closed Elgin Hospital for $1 million in 2019. In 2020, at the start of the coronavirus pandemic, the state decided to lease the hospital for COVID-19 patients. But he never followed through on his plans. Instead, he reached a settlement to pay the company nearly $4 million.
Other investments have not worked as well. Several creditors and partners have sued other Thomas businesses and Thomas himself, alleging they failed to repay debts or reneged on agreements. In the case involving the South Side Mall, a bankruptcy trustee alleges that Thomas made illegal transfers of ownership to other Freedom Development Group properties. Back in February, Thomas insisted he didn’t know anything about the transfers.
Individuals filing for bankruptcy protection are required to provide a complete list of their assets and liabilities. Harris, Thomas’ attorney, acknowledged his filing had omissions, but said he was not breaching that requirement at this early stage in the case.
“As of today, right now, they don’t have to be over,” Harris said. “So far, we have complied with the rules.”