Why is it so hard to know what Daryl Heller owns? A law professor explains

• By Brett Sholtis/LNP | LancasterOnline

As a federal bankruptcy judge mulls whether to appoint a trustee to oversee former ATM network owner Daryl Heller’s personal Chapter 11 bankruptcy, legal experts say that real estate owned by companies Heller registered could be liquidated to pay investors who have lost millions.

But what exactly Heller owns is not an easy question to answer.

Heller registered several business entities — Accordo Limited Partnership, Brookfield Partners a.k.a. Brookfield Properties, DHQM and DHQM2 — and listed them as assets on his December 2023 personal financial statement.

However, Heller’s attorney, Sari Placona, says her client owns just 1% or less of these companies. Accordo, Placona said, is owned by some of Heller’s immediate family members.

Widener University Law Professor Luke Scheuer specializes in corporate law. He said limited liability companies and limited partnerships are private entities, which don’t have to disclose to the public who their owners are. Although Heller was listed as “general partner” and signed the registration documents on some of these entities, that doesn’t mean he owned them.

Scheuer said that it’s possible Heller was overwhelmed by how many businesses he owned, leading to inaccuracies in his personal documents or public filings.

“The other possibility is that someone is doing one of those shell games that you see on the boardwalk, where someone is shuffling around ownership at the last minute for the sake of either hiding assets, or taking them out of the jurisdiction of the court, or the jurisdiction of the bankruptcy,” Scheuer said. “You’re not allowed to do that. But does that mean that doesn’t happen? No. It can happen, and it does happen.”

A business is required to keep track of its records, but those would only be visible if lawyers obtained them, Scheuer said.

He used one example: Accordo Limited Partnership, for which Heller’s adult son Ethan is now listed as an officer on state filings.

“If the son was transferred ownership, then that has legal meaning, because there’s a tax consequence to these things,” Scheuer said. “You have to keep these records. You have to have done a vote. You can’t just say it happened.”

If a judge allowed attorneys to request the records, they should be easily produced by Accordo, Scheuer said. Attorneys for the ATM investor funds did attempt to get the Accordo records, but the bankruptcy judge rejected that effort.

Scheuer noted that the rules of bankruptcy do not allow the transfer of assets without the court’s authority. Transferring assets to avoid liability “could be fraud,” he said, but it’s also possible that this is an example of poor accounting.

Placona said Heller signed away his ownership stake “in early 2024.” Paramount, Heller’s ATM investment company, first failed to pay investors in April 2024. In August, investors filed suit for control of the company, claiming they were owed $65 million. Heller filed for bankruptcy protection in February.

“You can lose the protections of corporate status with sloppy record keeping,” Scheuer said. “That doesn’t make it criminal. But if you are intentionally doing it, it could be.”

This reporter’s work is funded by the Lancaster County Local Journalism Fund. For more information, or to make a contribution, please visit lanc.news/supportlocaljournalism.

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