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Baldwin Brothers Finally Forced to Take Bankruptcy Personally

August 04, 1996|JOHN O'DELL | TIMES STAFF WRITER

SANTA ANA — As their home-building empire began crumbling, brothers Alfred and James Baldwin at least were able to look to their private estates in tightly guarded Emerald Bay for sanctuary.

It's the Baldwin Co., after all, that's been in bankruptcy for 13 months, not the brothers.

But the Baldwins' sanctuary was invaded last week as Orange County marshals hauled an estimated $1 million worth of artwork and antiques out of the brothers' side-by-side homes to help satisfy a $2.2-million judgment against the two home builders.

Geoffrey S. Fearns, a former Baldwin Co. executive, won the award in arbitration after accusing the brothers of unfairly pressuring him to quit his job as head of the company's Orange County division in 1993.

Much of the property seized, court files show, was selected by Fearns from photos published in Architectural Digest magazine, which extolled the beauty of the two oceanfront homes. One of the houses, owned by James and Nancy Baldwin, was put on the market last year for $10 million.

Marshals confiscated the property without warning after Fearns argued in court papers that the Baldwins, who own several vacation homes as well as boats and private planes, could remove the property if served with the order in advance.

Neither the Baldwins nor Fearns could be reached for comment Friday.

In court documents, Fearns swore that the brothers told him they did not have the assets to pay the judgment--despite the value on paper of their personal holdings.

A court hearing has been scheduled later this month to determine whether the Baldwins can pay Fearns without a court-ordered sale of their personal goods. Meantime, the property is being held in storage by the marshal's office.

The Baldwins so far have been shielded from the repercussions of their business bankruptcy because they are not personally liable for any of the Baldwin Co.'s estimated $250 million in debt. In addition, they still own thousands of acres of prime Southern California land through several other businesses and partnerships that are not involved in the bankruptcy.

But Fearns was able to crack the wall that separates the brothers from their business operations.

He did not prevail in his wrongful-firing claim, but a court-appointed arbitrator ruled that Fearns was owed $2.2 million under his profit-sharing agreement with Baldwin Co.

The Baldwin brothers were personally liable because they owned the company, which by then was in bankruptcy and had no funds to pay the award. The Baldwins no longer have operating control of the Baldwin Co.

The brothers also are named in dozens of claims pending in court cases filed by creditors in Orange and San Diego counties, but it is not clear whether they can be held personally liable in most of the cases. If they are, creditors are eyeing other Baldwin properties including a Wyoming ranch, a Cabo San Lucas vacation compound, an Idaho ski chalet, a 100-foot yacht and a stable of off-road racing cars.

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