Attorney Gary Peel seeks to dismiss his bankruptcy petition so trustees cannot recover assets from his wife Deborah Pontious-Peel, according to trustee Carla Randolph.

Randolph's attorney, Laura Grandy, wrote April 5 that Randolph offered to buy equity in some assets while letting Gary Peel keep certain personal property.

Randolph made the offer "in lieu of filing a Complaint against the Debtor's current wife to recover those assets," Grandy wrote in an objection to Peel's motion to dismiss.

"In response to that offer, the Motion to Dismiss was filed," she wrote.

Grandy also warned that Gary Peel might transfer or liquidate assets to pay for his defense against indictments that a federal grand jury approved March 23.

The grand jury charged him with bankruptcy fraud, obstruction of justice and possession of child pornography.

The indictments caught the eye of regional bankruptcy trustee Nancy Gargula of Peoria. On April 4, a day ahead of Grandy, Gargula objected to the motion to dismiss.

"Given Debtor's conduct, it must be judicially determined that Debtor will not be free once again to try at a later date to discharge the debts owed to the various creditors, and in particular, to his ex-wife," wrote Gargula's attorney, Mark Skaggs.

He wrote that Randolph and Grandy were liquidating assets that Gary Peel may have thought were not free and clear of liens and had no value to the estate.

"Debtor is not free to dismiss this case now that the Chapter 7 trustee has discovered these assets simply because Debtor does not want to now lose those assets," he wrote.

If the objection left an impression that Gargula had taken sides with former wife Deborah J. Peel, Gargula erased any doubt April 17.

She objected to a motion Gary Peel filed last August to discharge his debts to Deborah J. Peel under the divorce contract they signed in 2003.

Skaggs wrote that Deborah J. Peel opposed discharge and retained counsel.

Skaggs wrote that on Jan. 20, Gary Peel telephoned Deborah J. Peel and told her he had a relationship with her sister during the marriage. He wrote that Gary Peel told Deborah J. Peel she would find pictures of her sister at her home.

"Defendant informed his ex-wife that if she did not abandon the bankruptcy challenge, cease in her attempts to depose Defendant's current wife, and agree to a new financial settlement, he would disclose the pictures to his ex-wife's parents," Skaggs wrote.

He wrote that Deborah J. Peel, in cooperation with law enforcement authorities, met Gary Peel Jan. 31.

The photos were placed in a sealed envelope, Skaggs wrote, and both Gary Peel and Deborah J. Peel signed across the seal.

Skaggs wrote that Gary Peel said he would provide Deborah J. Peel with the envelope after she signed a new settlement agreement.

He wrote that a bankruptcy court must deny discharge if a debtor knowingly or fraudulently gave, offered, received or attempted to obtain money, property or advantage for acting or forbearing to act.

Skaggs said April 20 that Gargula tracks all cases in the region and intervenes when necessary. He would not say how often she intervenes.

U.S. Bankruptcy Judge Gerald Fines of Danville has set a May 1 hearing on Gary Peel's motion to dismiss.

Fines has set a May 5 status hearing on Gary Peel's motion to discharge his debts to Deborah J. Peel.

Before either of those events, Fines will hear a motion of First Collinsville Bank to take Gary Peel's house at 16 Kensington Court in Glen Carbon on April 26.

The bank moved March 31 to lift the court's automatic stay on its claim.

Attorney Kevin Stine wrote that Gary Peel has not made regular payments on the property. He wrote that promissory notes of $337,003.29 will come due Aug. 6.

The bank wants Fines to order Randolph to abandon the house from Gary Peel's estate.

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