U.S. Trustee wants to question classic car restorer over bankruptcy filing

01/16/2014 4:52 PM

01/17/2014 7:54 AM

The bankruptcy liquidation case of classic car restorer Kenny Key – accused in court documents of stealing money from customers – and his wife has drawn the attention of the U.S. Trustee’s office in Columbia, which wants to interview the Keys under oath about assets they might have failed to disclose in their bankruptcy filing.

Linda Barr, a trial lawyer with the U.S. Trustee’s office, asked a judge on Thursday for permission to conduct a Rule 2004 examination – the bankruptcy court’s version of a deposition – with Key and his wife, Connie, on Jan. 27 in Columbia. Such requests typically are granted.

Barr made the request based on a report from Michelle Vieira, the Myrtle Beach trustee overseeing Key’s case, after Vieira visited Key’s shop – called Kenny’s Kustoms – located on S.C. 9.

“Based on her review of the business location, an examination of the debtors to identify and secure assets is needed soon,” Barr said in a court filing. Barr told the judge that the Keys’ lawyer, Jackson Turner-Vaught, failed to respond to her initial request for an examination of his client.

Turner-Vaught and Vieira have told The Sun News they do not comment on pending cases.

Barr said in court documents that she plans to interview Key and his wife separately about their conduct while under the bankruptcy court’s protection from creditors as well as their property, liabilities and financial conditions.

The request to question Key follows a consent order filed this week in which Key agreed to give Vieira access to all of his property and business records. Vieira went to court to get that access after learning Key was trying to sell a 1951 Ford chassis as well as other cars and assorted automobile and motorcycle parts, tools and equipment on Craigslist. Key had not disclosed those items on the list of assets he provided to the bankruptcy court.

Key also tried to sell his shop through a Craigslist ad that stated the owner is “retiring soon” and “all equipment, tools, parts and cars [are] for sale.”

Key told The Sun News that he does not own the items he tried to sell on Craigslist, but is selling them for customers. He said the tools and equipment he tried to sell belong to mechanics hired to work at his shop.

After the Craigslist sales came to light, Key filed amended statements with the bankruptcy court in which he said he also sold three other cars for customers over the past year. Key did not identify the cars’ owners, referring to them on court documents as “random customer.”

The discovery of previously undisclosed assets means there might be some money to distribute to the Keys’ creditors, including dissatisfied customers who have filed about $600,000 in judgments against the car restorer. Creditors have until April 11 to file a claim with the bankruptcy court. The first of those claims – a nearly $4,800 credit card debt – was filed Tuesday.

Bobby Ward, one of the consumers who say they’ve lost money to Key, said he is doubtful he’ll recover any of his funds but is pleased with the scrutiny the trustee is giving the case.

“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.

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.

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