Beneath his judicial robes Andrew Armatas has been stripped bare, right down to the 35 shirts (dress and casual), 8 pairs of slacks, "misc. socks, undergarments, etc." and single tuxedo he lists among his worldly possessions. Augmenting these is $50 in cash, nothing in the bank and an inventory of household goods that would do a college sophomore proud: some posters, a waterbed, a leather chair and hassock, and, yes, a Toyo 8-track stereo player/receiver. The Chapter 7 bankruptcy filing submitted March 3 by Denver County Court's chief presiding judge offers just $16,094 in assets--offset by a whopping $2,659,035 in liabilities.
The discrepancy is so stark you have to wonder how Armatas ever judged himself to be a real estate investor--and how he could ascribe blame for the $2.5 million gap to Denver's sour market in the Eighties. That explanation leaves a real odor in the court.
The bankruptcy filing contains other clues worthy of a courtroom drama. The judge does not own a home and pays no rent. But in his $4,354 monthly expenses--balanced by the $4,385 he takes home from the City and County of Denver--he lists $150 for "home maintenance," $330 for utilities, $75 for cleaning and lawn care. The judge does not own a car, but he pays $148 a month in auto insurance, as well as another $220 in transportation costs. He shells out $600 a month on food-and that isn't counting the $250 for "dinners, meetings, alumni functions, professional dues" or $240 in "recreation, clubs and entertainment, newspapers, magazines, etc."
Armatas says he owns no property, but he lists loans and notes secured by a building at 16-22 South Broadway (where tenants say they make their rent payments to the Sam Armatas Trust). He notes his 25 percent ownership in Arakouzo, a Colorado partnership, market value "unknown"--and then adds it in as a zero-dollar asset, even though his liabilities list a $12,000 loan secured by that partnership, as well as a $550,000 business loan to the entire partnership from Colorado National Bank, where Armatas also has an outstanding promissory note--reduced in a 1990 judgment to $163,939. He also owes $45,300 to Central Banks, $110,000 to First Interstate of Englewood; $14,955 to Wyoming's Keye Bank and a note at the Home State Bank in Loveland, reduced to $57,094 this January, just as Armatas was stepping up to become presiding judge of Denver County Court.
Although elsewhere in the filing Armatas claims he made no charitable contributions in the previous year, his monthly budget includes $100 for charity. Perhaps that's what Armatas considers the $100 payment he makes each month to the IRS. At this rate, it will take only 230 years to pay off the $276,574 he owes on a tax lien filed in May 1990 for the period ending December 1988. (In Armatas's filing, that lien is actually listed three times, which means his liabilities may be $552,000 lower than estimated.) And he hasn't shown any speed in clearing off $950 billed by Deloitte & Touche in 1990 for the dissolution of his marriage.
Details of that legal action fill another file in the City and County Building, where Armatas goes to work every day--but it's not open to public viewing. His divorce--Armatas was the petitioner, his wife of 25 years the reluctant respondent--was just going through Denver District Court when Armatas was appointed to a Denver County Court judgeship in March 1990. Like many others, Armatas requested that the details of his divorce remain confidential. And Judge Lynne Hufnagel, as she has with so many others prominent in the legal field, including Denver City Attorney Dan Muse, acceded to Armatas's request. Even so, the files do contain a few documents--he got to keep his household furnishings (that 8-track, no doubt), his interest in Arakouzo and the Sam Armatas Trust; she got the cars and the Bronco tickets, as well as custody of their then-twelve-year-old son and $1,800 withheld monthly from the judge's paycheck.
The divorce petition also notes that Armatas would "assume and be solely liable for any and all federal and state income tax liability for the years 1988 and 1989."
Timing is everything. By early 1990 the IRS was clearly coming on strong. But when the call came from Mayor Federico Pena for Armatas to ascend to the bench, he jumped at the chance. And almost five years later, when Mayor Wellington Webb asked Armatas to become the presiding judge, Armatas had to know that his bankruptcy filing was imminent. Rather than show judgment, though, he accepted the appointment.
As a result, Armatas is now stripped as bare as the supplicants before his bench, where he has frequently displayed wit and compassion. Denver County Court doesn't deal with many big-ticket items, and rarely debtors who owe $2.5 million. This is the court of small crimes. Traffic tickets. Barking dogs. Curfew violations. Code violations. And on those, the most celebrated scofflaw is Douglas Bruce, the father of Colorado's tax-limitation law and a real estate investor himself. In the summer of '93 Bruce spent many hours in Armatas's courtroom, where he was eventually found guilty by a jury of two counts of maintaining an unsafe building and two counts of failure to obey a lawful order to fix up some of his properties. Ultimately, Armatas ordered Bruce to pay a $2,500 fine and do 150 hours of community service or spend 28 days in jail.
Bruce, being Bruce, says he would rather go to jail, even at the "risk of being sodomized"--and perhaps attracting some publicity. In the meantime, last Thursday he was back in Denver County Court, arguing that he'd been singled out for prosecution and citing misconduct by Armatas. "He's a real estate investor who's a failure," says Bruce. "I'm a real estate investor who's successful. How does somebody whose income is $74,000 a year borrow $2 million?"
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It's a good question, and Bruce takes pleasure in asking it. After all, Armatas was the man who sent a magistrate to arrest Bruce two months ago--after misplacing a certified letter that had arrived at the courthouse the week before. "This guy's made my life miserable for two years--and you didn't help any," Bruce tells me. "I knew he was morally and intellectually bankrupt. I just didn't know he was financially bankrupt."
The Bruce trial in August '93 was quite a circus. "This case is an atrocity," Armatas told the prosecutor and Bruce. "You're both too busy on your own soapboxes."
But by sitting in judgment on one real-estate investor when he had all too real real-estate problems of his own, Armatas has given Bruce a boost right back onto his soapbox.
And that is a liability beyond forgiveness.