SPRINGFIELD, Mo. A local landlord known for renting dangerous and uninhabitable homes has filed bankruptcy.
417 Rentals, owned by Chris Gatley, could soon cease to exist.
According to court documents Gatley is several million dollars in debt. He filed for Chapter 11 bankruptcy in August. This would allow him to keep 417 Rentals alive by reorganizing to stay afloat.
However, the city doesn't want this to happen unless Gatley follows a radically different business model from what he uses now.
"To stop Chris Gatley from operating as he is it's going to take an act of the bankruptcy judge," said Assistant City Attorney for Springfield, Duke McDonald.
We've often reported on the problems 417 Rentals has maintaining its properties.
"He's one man trying to operate 500 properties. That, in and of itself, seems like an impossible task," said McDonald.
He said Gatley must change the way he operates if he wants to save his business.
"The federal law says, that a judge can confirm a reorganization plan only if the people that are going to carry on the business will operate consistent with public policy," explained McDonald.
That means Gatley will have to renovate his properties and bring them up to city code.
McDonald said, "Based the activities that we've seen from 417 Rentals, we think it's going to be a small miracle if he turns that around."
The city filed an objection to Gatley's bankruptcy case. According to court documents Gatley has made false statements about neglected properties, including the apartment building we told you about last month on Grant Avenue that could be demolished.
"To hold him accountable what we have done is we have worked with his bankruptcy lawyer, Ron Weiss and gave him a list of criteria that we'd like to see as part of the plan, as part of the bankruptcy plan showing that yes we have turned over a new leaf," explained McDonald.
If Gatley doesn't comply the city could take the matter back to the judge to force him into Chapter 7 bankruptcy.
We asked, "Can we see the end of 417 Rentals?"
McDonald said, "You certainly could. That is certainly a possibility. A liquidation would mean that he would have to sell all of the company's assets, pay the creditors. After that, the rest of that the debt would be discharged, whatever that is, but he would have to find a different business, different way to make a living."
Our calls Gatley's attorney, Ron Weiss have not been returned.
Another hearing for this case is scheduled for Wednesday.