A Tri-City executive is being sued in bankruptcy court by a creditor seeking more than $1 million for an outstanding loan balance, interest and legal fees, the Tri-Cities Area (Wash.) Journal of Business reported. The case against Fraser S. Hawley, a developer and business leader who was married to state Sen. Sharon Brown (R-Kennewick) is set to go to trial May 9. Hawley is being sued by MS Properties LLC and owner Michael Shemali, which is asking the court to determine if Hawley’s debt could be erased under the Bankruptcy Code. Hawley filed to liquidate his assets under chapter 7 in 2020, after he and Brown secured a divorce. The bankruptcy was discharged in March 2021. Shemali, along with Columbia Bank and J.P. Morgan Chase, were his top unsecured creditors. Hawley and partner Thomas Arnold borrowed $500,000 from MS Properties in 2016. Later that year, Hawley told MS Properties he needed additional money and secured an additional $250,000 loan. The suit does not identify the purpose of the loans. The plaintiff began making demands for repayment in July 2017. The outstanding balance, including interest and legal fees, stood at $1.09 million in January 2021. The suit centers on allegations Hawley concealed assets that could have repaid the debt by getting divorced and transferring assets to his wife, which he disputes in response to the original complaint. Hawley was married to Brown when the notes were signed, and the couple had significant and valuable assets. The suit claims the couple entered a “sham divorce” in which Hawley transferred assets to Brown and beyond the reach of the bankruptcy. The initial divorce decree was entered March 30, 2018.
