A bankruptcy judge last week denied the chapter 7 petition filed by a pair of Spokane, Wash., doctors who lied about their finances, prompting the judge to rule that their “failure to provide accurate information was knowing and fraudulent,” the Spokane Spokesman-Review reported. Dr. Sajid Ravasia, a longtime psychiatrist at Providence Sacred Heart Medical Center, and Dr. Debra Ravasia, a gynecologist, originally filed for creditor protection in 2017 from about 8,000 former clients of Debra Ravasia’s failed businesses, Northwest Health Summit and Ajuva Spa. While it appeared the case had ended with a settlement in 2017, the U.S. Trustee’s Office objected to that settlement and the case proceeded to trial, which convened last month. Chief Bankruptcy Judge Frederick Corbit ruled against the Ravasias on Thursday, agreeing that acting U.S. Trustee Gregory Garvin proved by a preponderance of the evidence that the Ravasias lied about their incomes to avoid a restructuring plan that would have provided some payment to those people and companies that were owed money. Judge Corbit noted that the bankruptcy proceedings exist to allow an “honest debtor to discharge debts and to make a fresh start, free from the burden of past indebtedness,” he wrote. But Judge Corbit ruled that Garvin showed that the couple lied about both their incomes and expenses during the case. The $191 million bankruptcy was filed after Debra Ravasia shut down both of her businesses in 2016, which Sajid Ravasia apparently did not help manage. The couple’s actual debt was vastly lower than $191 million. Their first attorney, Dan O’Rourke, previously explained that they had arrived at the $191 million-figure by assigning a $20,000 value on each of the businesses’ 8,000 former clients. However, the couple nonetheless sought chapter 7 protection under the argument that their living expenses, which included paying staff to care for their lawn, swimming pool and cost of tuition to a private school for their children, far exceeded Debra Ravasia’s ability to pay because she was no longer employed or employable.
