The State Worker

Chronicling civil-service life for California state workers

June 23, 2011
Don Novey grilled by union attorney at bankruptcy hearing

110623 Novey file photo 2002.JPGDuring a tense bankruptcy hearing this morning, the former president of the state's correctional officers association sparred with an attorney for his former union over everything from his earnings and property holdings to the value of sports memorabilia and jewelry.

Don Novey and his wife Carol Novey sat at one leg of a u-shaped conference table on the 7th floor of the federal courthouse in downtown Sacramento to go over their court filing with trustee Jan Johnson and to give creditors a chance to probe their finances.

Their attorney, Peter Macaluso, urged them several times to remain calm as they fielded questions from CCPOA bankruptcy lawyer Barry Spitzer, who was seated at the other leg of the table.

"Where did the this money go?" Spitzer asked after noting that Novey made more than $1 million total from 2008 and 2009 but has assets of only $354,000.

"Spent it," Novey said.

As The State Worker reported late Wednesday, the Noveys owe more than $670,000 in taxes, secured and unsecured debt, according to their bankruptcy filing. That includes $20,000 to CCPOA from a stipulated settlement reached after the union accused Don Novey of breach of contract. Spitzer was the only lawyer representing a creditor at today's hearing, even though several others in the Novey filing have much more at stake.

Several of Spitzer's questions implied that the Noveys might be hiding money or understating the value of their assets. He asked why, for example, their court filing didn't include a Hawaii timeshare worth about $5,000 (the file will be amended to include it) or how they arrived at the $1,000 rental value of an Arizona condo when they haven't yet rented it out (it was based on rentals for similar units for in the area).

At one point during the 20-minute hearing Spitzer focused on a pair of boxing gloves signed by Muhammed Ali valued at $250.

"Would you sell me those (gloves) for $250?" Spitzer asked.

"I wouldn't sell them," Novey said, because of their sentimental value.

"$1,000?" Spitzer asked.

"I wouldn't sell them," Novey said again.

When Carol Novey said that the $5,000 itemization for jewelry was "garage sale value" and not a professionally appraised estimate, Spitzer sarcastically asked, "You bought the jewelry at a garage sale?"

Novey's image as a skilled political consultant took some hits last year after he advised clients to pour money into Republican Meg Whitman's failed bid for governor. That may have been behind his response when, early in today's hearing, the bankruptcy trustee asked Novey why he suffered "a significant decrease in income" in the last six months. His answer: "Loss of employment."

PHOTO: Don Novey, 2002 Sacramento Bee file photo

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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