Mastro denies bankruptcy trustee's claims

Bankrupt real-estate developer and lender Michael R. Mastro says allegations that he tried to put his Medina waterfront home, Rolls-Royce and jewelry out of reach of creditors are "misleading, incomplete and inflammatory."

James Rigby, the trustee appointed by U.S. Bankruptcy Court to liquidate Mastro's assets, filed a lawsuit earlier this fall alleging that Mastro had transferred control of the assets to offshore trusts "to hinder, delay or defraud creditors" after sensing his real-estate empire was collapsing.

Mastro denied the allegations in a response filed with the court this week.

Rigby is seeking to void the transfers. His lawsuit also attempts to undo two deeds of trust that Mastro signed earlier this year pledging his home to several business associates. Those deeds, too, were devised to defraud creditors, the complaint says.

In his response, however, Mastro says the house was lawfully pledged to pay back several big creditors. He contends Rigby's moves to block foreclosure could damage those creditors — and Mastro — as the home's value continues to fall, and that could be grounds for a countersuit. One of the deed-holders has moved recently to foreclose on the house.

Mastro, 84, was forced into bankruptcy by three of his banks this summer. He has filed documents showing total debts approaching $600 million, and significantly smaller assets.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com