On my daily walk this morning, I listened to Love Trapped, Episode 1. The theme music was interesting. The number (and length) of ads was super-annoying.
Content-wise, I thought the episode focused way, way too much on not just Clayton, but The Bachelor in general. Yes, I know that background stuff is for context, but I got seriously bored in the middle….to the point I almost stopped listening. I didn’t watch Clayton’s season and I don’t care if he was the most popular bachelor or the least. But again, I understand why the context was arguably needed.
Clayton’s discussion about having a gun and thinking of killing himself? That felt performative, kind of too dramatic. I didn’t like that.
LOOK — I had several long conversations with Stephani Young over the last year. I found her to be professional, smart, and I believe she cared about telling this story the “right way” (meaning giving accurate facts and details from both sides). Over the years, I have dealt with tons of “real” journalists (i.e., not crazy people with a webcam posting garbage on YouTube). Stephani is a real journalist.
She made it clear she wanted to include Laura’s side. She asked to either interview Laura or have me answer questions on Laura’s behalf. Unfortunately, due to the pending Rachel Mitchell thing, that just wasn’t an option. So, with only one party able to participate, I am prepared for Love Trapped to be a lot more one-sided than it should be.
Anyway, the point of this post isn’t to talk about the podcast. It’s to share something I realized while listening to Clayton talking about his real estate career (I had no clue he had never done any deals before Laura).
This detail got me thinking about something important which could be a BIG issue for Clayton in the BK case. Here’s the deal — Clayton (with Woodnick) filed an adversary proceeding against Laura. Woodnick says the $200K in fees should be exempt from discharge because it represents “willful and malicious” harm suffered by Clayton.
Let’s look at exactly what the Complaint says:
See paragraph 35? It claims Laura caused “significant financial harm to Echard.” It doesn’t explain precisely what that means, but it’s not hard to guess — it’s referring to the $200K in fees awarded to Clayton. That would be harm (although I would still argue it’s self-inflicted harm, but that’s a separate issue).
I have a theory about this — I don’t believe that $200K debt is real. Sure, the courts granted judgments in favor of Clayton, so the debt is real in that sense. But debts can be, and often are, forgiven. Or just waived in their entirety. So just because you incurred a debt on paper does NOT mean you have actually been harmed in the real world.
Here’s the thing — Clayton is only harmed by those debts if Woodnick actually forces him to pay that money. If the debt is waived/forgiven, Clayton never pays Woodnick. In that scenario, Laura did not, in fact, “cause significant financial harm to Echard.”
Think about this. What if Woodnick said to Clayton: “Look bro, don’t worry about the fees….I won’t make you actually pay any of this. I just hate Laura so much, I am going to do this work for free, and I will try to get the money from her, but if I can’t collect from her, don’t worry — you won’t have to pay.”
Really, think about this for a second. Clayton is 32 years old. I don’t have a lot of specific info about his current income, but I don’t believe he is rich. Do you really think a young guy in his position would agree to be legally bound to pay $200,000 in legal fees?
Would you put yourself in that position? Signing a contract to pay $200,000 that you knew you could never afford to pay?
I don’t believe that for a second.
And keep something else in mind — before I started my own practice, I spent almost 10 years working at law firms in Phoenix. During that time, I saw clients rack up large bills they couldn’t pay. In around 99% of cases, after the bill got above a certain level, the firm would fire the client and sue them for the unpaid fees. I personally did this for my bosses (which sucked). Lawyers want to get paid. If a client owes the money, the lawyer WILL pursue the debt. I’ve seen it. I’ve done it.
That was pretty much the default situation in EVERY “real” case.
This is just my speculative opinion, but I don’t believe for one second that Clayton actually agreed to pay $200K to Woodnick. No chance. Yes, there’s a written fee agreement that says this, but my belief is Woodnick made a second verbal side agreement with Clayton: he doesn’t have to pay the debt if Laura can’t or won’t pay.
Here’s why I think this will matter. I’m not trying to dox the guy, but Clayton bought a new house last year. This is all public record, so I could share links. As a courtesy, I won’t.
What matters is this — records show he paid $739,000 to buy the house. Like most folks, Clayton needed a mortgage for the purchase. Public records show he borrowed $665,910. So basically, he put 10% down and borrowed the other 90%.
Why does THAT matter? Because – when you apply for a mortgage, you have to give the bank tons of information regarding your income AND your debts. There’s something called a debt-to-income ratio which is critical to anyone who wants a mortgage loan.
Would anyone like to bet whether Clayton told the bank that he owed $200,000 in legal fees to Woodnick Law? I will bet you a full dinner on me at Toca Madera (excluding alcohol) Clayton did NOT disclose that debt to the bank.
Because there is no debt. It’s a sham.
If I am right (and to be clear – I am just speculating about this), that means one of two things:
1.) Clayton committed bank fraud when he applied for a mortgage without disclosing a real $200K debt he actually owed; OR
2.) Woodnick lied to the bankruptcy court by falsely claiming Clayton was harmed by a debt which Woodnick knows is fake (due to the side agreement between Clayton and Woodnick).
Or who knows – maybe I’m wrong (again). Maybe Clayton DID fully disclose the debt to the bank. Maybe his income is SO HIGH, the bank didn’t see an issue with his debt-to-income ratio. Maybe Clayton has been making monthly payments to Gregg Woodnick for the last several years. Or maybe not.
Let’s be fair. Let’s not speculate about this. Let’s get to the truth.
Once discovery opens in the the BK adversary proceeding, I’ll shoot a subpoena to Clayton’s bank asking for a copy of his loan application. If that $200K debt isn’t listed on the application, well, maybe Queen Jennifer will be interested in pursuing that further, in the interests of justice…..
Or maybe not.