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Wednesday, Dec. 31, 2014 12:01 am

Like father like son

Jacob Parsons declares bankruptcy

While his father, Jeff Parsons, made headlines by declaring bankruptcy and was accused of hiding assets and cheating employees out of wages, Jacob Parsons last summer filed for bankruptcy in Texas.

The biggest unsecured creditors in Jacob Parsons’ bankruptcy case are the Internal Revenue Service, which is owed $190,175 for unpaid income taxes, and the Illinois Department of Revenue, which is owed more than $23,100 for unpaid taxes. Parsons owes more than $41,800 to other unsecured creditors, including credit card companies, a former landlord, a plumber and at least one lawyer. Secured creditors include Marine Bank, which holds a $330,000 mortgage on Parsons’ home in Petersburg.

The bankruptcy case of the younger Parsons has been moved to Springfield at the request of Jeffrey Richardson, trustee in charge of the bankruptcy case of THR and Associates, the failed company that was owned by Jeff Parsons and that once employed Jacob Parsons. The case was transferred out of Texas when attorneys hired by Richardson told the court in Texas that most of Jacob Parsons’ assets and creditors are in Illinois, Jacob Parsons doesn’t live in Texas and that Jacob Parsons had halted fraudulent-transfer proceedings in Springfield by filing for bankruptcy.

Jacob Parsons established a company called Uncle Buck’s Trading Post in Lincoln nine days after his father and THR declared bankruptcy in 2012. Like THR, Uncle Buck’s was set up to buy and sell precious metals and collectibles. Richardson and Charles Covey, the trustee in charge of Jeff Parsons’ personal bankruptcy case, say that Jeff Parsons fraudulently transferred assets to his son and Uncle Buck’s in an attempt to hide assets from creditors. Covey says that Jeff Parsons gave his son nearly $26,500 shortly before filing for bankruptcy in 2012; Richardson says Jeff Parsons fraudulently transferred at least $119,600 in assets to his son and Uncle Buck’s Trading Post.

Federal agents seized “a significant amount of the inventory” from Uncle Buck’s, attorneys for Richardson said in the motion to transfer the younger Parsons’ bankruptcy case from Texas to Illinois. Richardson and Covey have an interest in recovering any fraudulently transferred assets, the attorneys said, and witnesses with knowledge of fraud accusations that could have a bearing on the younger Parsons’ bankruptcy case are in Illinois.

In bankruptcy filings, Jacob Parsons says that he and his wife earned $82,000 in 2012, $75,320 in 2013 and $38,320 through the first half of this year. On the other hand, he deposited more than $228,600 in his personal bank account in the month after his father and THR declared bankruptcy in 2012, according to court papers, and also made more than a dozen $9,200 monthly payments on his father’s Panther Creek home after the elder Parsons and THR declared bankruptcy.

Jacob Parsons, who has a house in Petersburg, reportedly moved to Texas in January. He moved to Colorado in September, before the first hearing was held in his bankruptcy case filed in Texas, according to the motion to transfer the case.

After the case was transferred to Springfield, Jacob Parsons’ attorney in Texas withdrew from the case, and Parsons on Oct. 31 filed a pro se motion to dismiss the case. In the motion, Parsons said that he couldn’t afford a lawyer, nor could he find one in Springfield who would represent him.

“The majority of local bankruptcy attorneys have a conflict of interest due to association with either THR bankruptcy or Jeff Parsons’ personal bankruptcy,” the younger Parsons wrote. “Debtor is self-employed and has been unable to work due to a medical crisis involving the recent birth of their baby.”

U.S. bankruptcy judge Mary Gorman last month denied the younger Parsons’ motion to dismiss the bankruptcy proceedings.

Jacob Parsons could not be reached for comment.

Gorman in October issued a $2.2 million judgment against the elder Parsons in his 2012 bankruptcy case, determining that he had broken a law forbidding business owners from taking assets from insolvent companies. The elder Parsons was also hit with a $12.2 million judgment in May, when a federal judge ruled that he had shortchanged THR employees out of wages. Parsons this month told the court that he has no money to satisfy the judgment.

Contact Bruce Rushton at brushton@illinoistimes.com.

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