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Corona Councilman's Bankruptcy Adds Fuel to Political Fire

Jeffrey Bennett keeps digging out, a fact trumpeted by enemies he's made on the board. That doesn't help his reelection bid.

August 23, 2004|Seema Mehta | Times Staff Writer

Corona Councilman Jeffrey Bennett and his family live the good life: They have a $2.5-million home in the city, occasionally jet to Hawaii for deep-sea fishing and own a stable of automobiles that includes a Bentley and Ferrari.

Bennett also is digging out of bankruptcy.

The councilman, who made his fortune in the gourmet dog kibble business, blames attorneys, creditors he calls inflexible and a luxury auto broker for his financial troubles.

His enemies on the City Council, however, lay the blame squarely on him -- and his personal debts have become a juicy political target in his November reelection bid.

Two council foes have accused Bennett of hyping conflict-of-interest allegations against them to deflect attention from his own problems.

"It's obvious that Mr. Bennett's personal life has become overly complicated and mildly depressing, and therefore he has chosen to spin these negative energies outward to diffuse people's interest in him and have them look at us," said Councilman Darrell Talbert. "It's good, old-fashioned dirty politics."

Bennett and his wife, Nan, who were worth $35 million in 2000, were worth negative $14 million two years later, with their debts taken into account, according to court records. To clear his debts, Bennett has sold millions of dollars' worth of property -- including vacation homes in Lake Arrowhead and Breckenridge, Colo., as well as commercial property in Corona.

"Everyone, at the end of the day, is going to be made whole," Bennett said. "There's plenty of assets and equity to pay off everybody."

Bennett said he planned to hold on to the Bentley and Ferrari for now, but even those may eventually have to be sold.

Bennett is a brash New York native who co-founded Nature's Recipe pet food company in 1981, coming up with the concept after cooking daily vegetarian meals for his ailing dog, who had food allergies. The company's products included dog kibble made from New Zealand lamb and rice. In 1996, H.J. Heinz Co. bought Nature's Recipe for a reported $90 million to $100 million.

Bennett spent some of his fortune on philanthropy, producing a documentary about dogs that served in the Vietnam War, and donating $100,000 to a memorial for Medal of Honor recipients at Riverside National Cemetery.

Bennett, 51, also donated generously to Republican candidates and jumped into politics himself in 1992, when he was first elected to the Corona City Council.

In recent months, that council has become a tense, divided panel, where former allies are now enemies.

Talbert and Mayor Jeff Miller have come under scrutiny for having started an energy consulting firm while the city was trying to take over some Edison power lines, substations and other facilities.

Bennett, who helped Miller get his political start by appointing him to a city parks and recreation board, became the pair's loudest critic, hurling damning allegations against them in court papers and the press.

Talbert and Miller were cleared of criminal wrongdoing and accused Bennett of lying to inflate the controversy surrounding them and deflect attention from his financial woes.

The matter came to a head in a Riverside courtroom this month when Bennett tried to make amends with Talbert and Miller. He extended his hand, but Miller loudly refused to shake it.

Bennett's financial problems stem from a series of deals, investments and transactions, which were put under a microscope when he filed for federal bankruptcy protection in November.

City National Bank lent Bennett $9 million for a variety of business ventures and sued the councilman in 2002, saying he failed to keep the bank apprised of his finances, as required.

Specifically, bank officials were alarmed after being told Bennett had transferred his family trust to an account based in the Cook Islands, a well-known haven for keeping assets low-profile.

According to the bank's court filings, Bennett told the bankers he was trying to make himself "judgment-proof" because of an airplane purchase deal that fell apart.

Bennett and a partner had bought a passenger jet for about $18 million, which was supposed to be leased monthly, then eventually bought, by Kentucky Fried Chicken. But KFC never bought the plane.

According to the bank, that left Bennett and his partner holding a bill for $5 million and threatened with a lawsuit by GE Capital Corp., the financing agent for the airplane purchase, according to the bank's court filings. Bennett vehemently denies the bank's allegations regarding his family trust, saying he never tried to make himself judgment-proof. He says he received bad legal advice about the trust.

Jeff Broker, Bennett's attorney, acknowledged that the trust was briefly moved to the Cook Islands but that it was moved back to California in early 2003, as required in the settlement agreement between the Bennetts and City National Bank a year after the lawsuit was filed.

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