Widow of Gregory Hirsch testifies during heated Meeting of Creditors in Master Lending Group bankruptcy case

For nearly two hours on Aug. 15, roughly 70 people took part in a Meeting of Creditors teleconference concerning the Chapter 7 bankruptcy case for Master Lending Group, LLC (MLG). During the meeting, the widow of MLG owner Gregory M. Hirsch testified in front of creditors, lawyers and others. The meeting was originally scheduled for Aug. 9, but the death of Gregory Hirsch on Aug. 3 caused the meeting to be pushed back one week.

Judith Hirsch, through power of attorney rights with MLG rep Judson C. Hill, filed the petition for bankruptcy for her husband and MLG on July 6 with over $40 million of creditor funds listed on the official form 201 petition. Bankruptcy Trustee Tiffany E. Caron began the teleconference by asking Judith Hirsch about MLG and her potential knowledge of the investment business run by her husband from 2005-2022.

Caron began by asking her about $975,000 “cash on hand” that was listed as an asset on the MLG filing. Before Hirsch could or would answer, Hill objected to Caron’s line of questioning.

“This is totally askew from what we had talked about before now,” Hill said. “If you want to ask her questions about the preparing of the petition, she can answer. But we are not going to let (Judith Hirsch) answer any questions about Master Lending Group or its assets. Mrs. Hirsch is not a witness in the case. All of this was discussed prior to this hearing.”

But Neil Gordon, council for Caron, responded to Hill’s objections only five minutes into the meeting.

“This isn’t the first time something like this has happened and (Hirsch) has to answer basic questions as the representative of the corporate debtor,” said Gordon. “There is no other representative. She is the one who signed, by her own admission, the statements, schedules and petitions. She has to explain the basis for the information that she signed without interruption by her attorneys. She's only being asked in the capacity of the representative, not as an individual in her own right and these are normal, appropriate questions. I've conducted over 40,000 of these and I have never had an attorney object to basic questions that are required to be asked.”

Hill responded in kind.

“Well, there's a first time for everything.”

After several minutes of heated exchanges between Gordon and Hill, Caron re-asked the question to Hirsch about the $975,000 that was removed as an MLG asset after originally being listed as one on the bankruptcy petition.

“Why were those funds removed as an asset in this case?” Caron asked Hirsch.

“To the best of my knowledge, those were Greg’s funds,” Hirsch answered, “That’s the answer I provided, I don’t know.”

When asked if she had received any money from Master Lending Group over the last two years, Hirsch responded that she had not, at least “not to her knowledge.” When asked if she, or any of her family members, had received funds from MLG in the last four years, Hirsch responded again, “No, not to my knowledge.”

Creditors for MLG have until Oct. 10, 2023 to file claims in the case if they hope to receive any compensation. While roughly 130 creditors were listed in the original bankruptcy filing, only 27 claims had been filed at the time of the phone call. The 27 claims amounted to $6.3 million, attorneys noted on the call. Creditors can make their claims and learn more information by visiting the website set-up by Caron at www.MLGtrustee.com.

The best way for the creditors to communicate specific concerns or information to the Trustee is by emailing Caron’s forensic accountant, Greg Hays (ghays@haysconsulting.net). Hays was on the call with creditors. He testified about what his firm (Hays Financial Consulting) had found since being brought onto the case in mid-July.

“It's like a puzzle. You have to get little pieces of it. From the bank records, to the promissory notes and third parties and you put it all together to determine what came in, what went out and what caused the problem,” said Hays. “We don't have all the records to show what was loaned (by MLG). We know what was loaned, but we don't know what all came back. We're missing a lot of the records.”

Hirsch said that she had received money from MLG at some point, but she “did not remember why it was paid” to her. She was asked during the call about the amount of money she received but she could not provide specifics. Still, Hirsch said that the amount was “more” than $50,000. When asked if it was more than $250,000, she couldn’t confirm nor deny the amount.

“I honestly do not recall,” she said.

Hays testified during the hearing that the predecessor to MLG was called “Empire Lending Group” and that the group had dissolved around 2001.

“We're going to have to piece that together and see what comes back,” Hays told creditors on the call. “We don’t see a lot of examples where Master Lending was generating income of any kind. We have to investigate and determine what happened. So, there's a lot of investigation to do in order to put this story together.”