LOS ANGELES, AUG. 12 -- Barry Minkow, founder of the ZZZZ Best Co. carpet-cleaning business whose stock in the company was worth more than $100 million earlier this year, has filed for personal bankruptcy, his attorney said today.
Yale M. Harlow said he filed a petition Friday to liquidate Minkow's assets under Chapter 7 of the U.S. bankruptcy code.
Minkow, 21, "doesn't have any substantial assets that I know of, at least none of those that are attributed to him," Harlow said.
Harlow said he filed the bankruptcy petition on Minkow's behalf because Minkow faces several lawsuits and foreclosure proceedings against his $698,000 Woodland Hills home.
A detailed list of Minkow's assets and debts must be filed with the court within 15 days, but Harlow said he will probably ask for an extension.
Minkow resigned as chairman of ZZZZ Best just days before the company filed for Chapter 11 bankruptcy protection on July 8. The company's directors have since sued Minkow and others, accusing them of fraud, theft and diversion of corporate funds for personal use.
In the month before ZZZZ Best collapsed, according to court documents, Minkow signed checks for cash or approved cashier's checks totaling $3 million.
Arthur Barens, another of Minkow's attorneys, said the money all went into his business.
Minkow, who owned 52 percent of ZZZZ Best's stock, recently liquidated some of his assets, including his Ferrari, to help pay legal fees, Barens said.
But Herb Wolas, the trustee for ZZZZ Best, said he was astonished by the filing and will ask the court to determine what happened to the assets.
Los Angeles Police Chief Daryl F. Gates alleged last month that Minkow and ZZZZ Best were part of a narcotics and money-laundering conspiracy involving organized crime.
According to court records, ZZZZ Best owes creditors $36 million. When Wolas was appointed trustee, he found only $30,000 in cash at the company. Since then, a sale of some of the company's assets has raised $62,000.