Sonja Morgan of RHONY Loses Control of her Chapter 11 Bankruptcy Case

Sonja Morgan’s anticipated battles with her newly appointed Chapter 11 trustee may make for great reality storylines when her hit Bravo series, Real Housewives of New York, returns for Season 6. Sonja lost control over her nearly 3-year-old Chapter 11 case when the bankruptcy judge appointed Ian J. Gazes as her Chapter 11 trustee.

Sonja had bitterly fought this attempt by Hannibal Pictures, Inc., to force the reality star to sell her assets for less than she wanted, but enough to pay creditors. Hannibal sued Sonja and her production company Sonja Productions LLC in 2006, saying that the reality star and her film outfit broke a contract agreement by failing to provide the promised funding for Fast Flash To Bang Time, a John Travolta film that was never made. The case was decided for Hannibal in September 2009 with the judge awarding a $7 million verdict.

A Chapter 11 trustee has the complete power to sell all of Sonja’s assets, capture her income and largely manage her affairs. Because she remains in Chapter 11 Sonja does retain the power to file a plan of reorganization, detailing her plan to pay creditors. However, Sonja has submitted at least two plans that have already failed in the bankruptcy court. The appointment of Gazes may force the former wife of billionaire John Adams Morgan, great-grandson of financier John Pierpont Morgan, to finally submit a plan that creditors, and the bankruptcy court, will approve.

[gravityform id="2" title="true" description="false" ajax="true" tabindex="200"]