A month after MSU Trustee Faylene Owen filed for Chapter 7 bankruptcy with her husband, members of the MSU Board of Trustees expressed mixed emotions on the filing’s implications for the board.
Citing $109,781 in unpaid taxes and about $475,000 in unsecured debt, Faylene and Larry Owen filed for bankruptcy on Dec. 11. Faylene Owen began her first term on the board in January 2007 and chairs the board’s finance and investment advisory committees. Her husband is a former MSU trustee.
Chapter 7 bankruptcy involves the sale of a debtor’s assets to creditors.
At least one trustee felt the Owens’ recent financial woes warrant a reconsideration of Faylene Owen’s committee positions.
Trustee Melanie Foster said given those positions, it would be in the university’s best interest if Owen step down as chair.
“I’m not personalizing it,” Foster said. “Our role as trustees is to be good stewards on behalf of the university. I think given her current financial condition, that’s been compromised.”
Foster, who with Trustee Donald Nugent is one of the board’s two Republicans, said she believes Trustee Joel Ferguson, the board’s chairman, should re-evaluate Owen’s committee positions.
Faylene Owen, a Democrat, said Sunday despite Foster’s opinion, she will further her work for the university.
“I will continue to work to preserve the financial position of Michigan State University and I will continue to work very hard to control the costs for our students,” Faylene Owen said.
Ferguson said it is premature for him to comment on the specifics of the Owens’ financial situation.
He said his duty as chairman is to “organize the board,” but declined to say whether he has the power to remove Owen as chair of the finance and investment advisory committees.
“Nothing’s going to happen right now,” Ferguson said. “We’re going to sit down and sort this out. (Owen will) do what’s best for the university. We all will.”
Larry Owen claimed full responsibility for the couple’s financial woes, citing several failed real estate investments. He said he did not believe the situation would negatively affect the board’s image with the community.
According to documents filed with the U.S. Bankruptcy Court for the Western District of Michigan, the Owens owe the Internal Revenue Service $63,556 in 2008 income taxes. Additionally, the couple’s unpaid 2007 and 2008 state income taxes total $32,000 and are owed to the Michigan Department of Treasury.
Officials from the IRS and the Michigan Department of Treasury said they cannot legally discuss any aspect of a person’s tax filing, including whether the taxes have been paid since the December bankruptcy filing.
Larry Owen said the couple will pay the delinquent taxes in full.
“This is not an effort to disregard taxes,” he said.
“We are obligated to and they will be paid.”
Sandy Hamlin, assistant register of deeds for Clinton County, said the Owens’ $1.04 million home in Bath Township went into foreclosure and was purchased Nov. 18 by BAC Home Loan Servicing for $594,000.
An additional $100 will be added to the $594,000 for each day the Owens do not redeem the property, Hamlin said. The couple has until mid-May to do so, although the bankruptcy filings indicate the Owens intend to surrender the home.
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The Owens took out two mortgages in 2003. The couple were then late on their property taxes to Bath Township four times in the next three years, totaling $31,598.
Each set of late taxes was paid in full in December 2007, and the couple has no delinquent taxes to Bath Township or Clinton County. The Owens’ current address is listed in East Lansing.
Larry Owen said he and his wife expect to clear up their financial issues within the year.
“I’m advised it will probably take six months,” he said.
Staff writer Zack Colman contributed to this article.
