Bankruptcy trustee steps in to stop Kenny’s Kustoms sales on Craigslist

dwren@thesunnews.comJanuary 9, 2014 

Kenny's Kustoms is located on S.C. 9 in the Longs community of Horry County on Wednesday, Dec. 11, 2013. Photo by Janet Blackmon Morgan / jblackmon@thesunnews.com

JANET BLACKMON MORGAN — jblackmon@thesunnews.com Buy Photo

The trustee in a bankruptcy case filed by classic car restorer Kenneth Key – accused in court documents of stealing money and car parts from his customers – has filed an emergency motion to stop Key from selling undisclosed assets that could be used to help pay some of the more than $600,000 in judgments and other debts Key owes.

Trustee Michelle Vieira filed the motion Wednesday after learning that Key is trying to sell a 1951 Ford chassis as well as other cars and assorted automobile and motorcycle parts, tools and equipment on Craigslist. Key did not disclose on bankruptcy documents any of the items he is trying to sell on the Internet site.

Vieira, in the motion, stated that Key apparently is “attempting to sell property that is owned by the bankruptcy estate” and creditors would be harmed by the sales because “the assets will not be available for liquidation” to pay Key’s debts.

Vieira wants a judge to force Key to turn over all of the property he is trying to sell and allow her to search Key’s home and business for any other assets he might have failed to disclose. Vieira also is asking a judge for permission to hire an attorney to handle negotiations regarding the sale of Key’s assets and possibly file lawsuits – known as adversary proceedings – against Key for any potential wrongdoing. A judge is scheduled to review Vieira’s requests on Jan. 21.

Vieira declined to discuss the emergency motion with The Sun News, saying it is her policy not to talk about pending cases.

Key – who filed for a joint bankruptcy liquidation with his wife, Connie – told The Sun News that he does not own the items he is selling on Craigslist, but is selling them for customers. He said the tools and equipment he is selling belong to mechanics hired to work at his Kenny’s Kustoms shop at 1445 S.C. 9 in Longs.

“I don’t know why everyone thinks I have money,” Key said. “I don’t have anything.”

Key said he is trying to shut down his business and plans to live off of his wife’s income and monthly Social Security checks.

“They are shutting me down,” Key said, referring to dissatisfied customers who have waged court battles with him for years. “I have no other income.”

Key had at least three ads on Craigslist, according to Vieira’s motion, and had updated the listings just hours after a court hearing Monday in which “he testified under oath that his [bankruptcy] schedules and statements were true and honest.”

One of the listings is for the sale of a “hot rod and custom shop” and the advertisement indicates that the owner is “retiring soon” and “all equipment, tools, parts and cars [are] for sale.” The listing also indicates that the shop is a “great business, all cash.” The ad provides a cell phone number for Key and directs potential buyers to “ask for Kenny.”

On bankruptcy documents, Key and his wife stated the value of Kenny’s Kustoms is zero dollars.

Bobby Ward, one of the consumers who say they’ve lost money to Key, said he is pleased that the trustee is questioning the bankruptcy documents and investigating the Craigslist sales.

“He tricked innocent victims into trusting him and then stole their hard-earned money,” Ward said in a letter included in court documents. “He should be held accountable for his actions and bankruptcy should be denied.”

Ward took his 1939 Ford pickup truck to Kenny’s Kustoms for restoration work in 2008 and paid $16,000 to Key in advance of any work on the vehicle. A year later, Ward said he learned no work had been done and Key refused to refund the money. When Ward retrieved the truck, he learned its chassis had been cut and then welded back together in a way that made it unsafe to ever drive again.

Ward obtained a judgment against Key – one of nearly a dozen lawsuits and judgments filed against Key, according to his bankruptcy filings.

Among the largest judgments is $275,950 that Key owes to Virginia resident William Elliott for taking money but failing to do any work on a pair of classic cars – a 1955 Ford Thunderbird and a 1966 Ford Mustang convertible. Elliott said both cars were ruined while sitting untouched at Kenny’s Kustoms.

Key told The Sun News he has completed all of the work he was paid for in every instance and the dissatisfied customers who have sued him amount to a small percentage of people who are mostly happy with the work Kenny’s Kustoms has done on their cars.

“For those few [customers] that are trying to extort money from me, there are 500 more than love what we’ve done,” he said. “This has been going on for eight years now and I’m tired of fighting. I’m just trying to get it all finalized so I can get the hell out of it.”

Vieira on Thursday filed notices in bankruptcy court that she is putting Key’s case on hold for 30 days and is ordering him to amend his filings to show all of the assets owned by him and his wife.

Key’s bankruptcy documents shows Kenny’s Kustoms took in $165,555 in 2011 and $103,029 last year. Key reported that he pays himself a $1,000 monthly salary. It’s not clear where the rest of the money from Kenny’s Kustoms has gone. On bankruptcy documents, Key and his wife say they own no real property and their vehicles – a 2003 Chevy Silverado and a 2004 Chevy Suburban – are worth less than $10,000 combined. Their other reported assets total about $4,000 – mostly clothing and household items and all of it exempt from seizure to pay creditors.

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