NEW ORLEANS — Unlike this season's winning on the football field, current and former members of the New Orleans Saints who bought nonexistent tax credits from a defunct movie studio are likely to come out big losers — perhaps getting back only 15 percent of their investment.
The Saints personnel — including coach Sean Payton, quarterback Drew Brees and former Ole Miss and Saints quarterback Archie Manning — were among investors who paid a total of about $1.8 million to Wayne Read, then-head of Louisiana Film Studios LLC, a suburban New Orleans operation that collapsed in 2009. The team itself is not involved.
The studio is in federal bankruptcy liquidation.
Read pleaded guilty last year to interstate transportation of stolen property and wire fraud and is scheduled to start serving a four-year federal prison sentence on Feb. 19.
In the meantime, a court-appointed trustee has been trying to recover at least part of the money to repay the studio's creditors. According to court records, about $713,000 has been recovered. Most of that has been taken back in two chunks: $425,000 that Read paid to a doctor to save his home in Wonder Lake, Ill., and $210,542 that Read paid to settle a credit line for Mardi Gras Studios, another failed movie studio project.
"We have collected a few nickels and dimes since then," said Fernand Laudimiey, an attorney representing the court-appointed bankruptcy trustee.
At the same time, bankruptcy law requires that attorney fees and costs come from that pot. So far, about $175,000 has been paid in the case, further reducing the amount available to pay the Saints players and other creditors, records show.
Collectively, the Saints are the studio's largest creditor, but they are competing with other big creditors for the likely miserly payback for their claims. 47 Construction, a company owned by the wife of former Saints long snapper Kevin Houser, has put in a $700,000 claim for work done on the studio. Another construction company has a $150,000 claim.
U.S. Bankruptcy Judge Elizabeth Magner eventually will decide what claims are allowed — and how much each claimant will get.
Attorney Jimmy Castex, who filed claims on behalf of several of the Saints, said it's likely that time is running out to find more money to pay creditors.
"Everyone was hoping that Read would pay restitution. He was ordered to pay restitution, but he hasn't paid anything," Castex said. "We were hoping that he had some money stuffed somewhere and would pay it back."
Read has been ordered to pay $1.8 million in restitution — at the rate of $500 per month. The money that has been recovered by the bankruptcy trustee is being applied to the total.
Castex estimated the tax-credit buyers probably stand to see only 15 cents for every dollar they paid under the current scenario. A final distribution will have to be approved by the judge.
Although Read peddled the movie industry tax credits, which provide a state income tax cut for buyers, state officials said the credits were never paid for. Court records list 27 current and former Saints players and coaches, and administrative personnel as credit buyers. Former defensive end Charles Grant gave Read the most money: $425,000. Payton paid $144,000, Brees invested $100,000 and Manning paid $80,000.
Investors were told they would be getting back $1.33 for every dollar invested.
Former Saints long snapper Kevin Houser, who purchased $125,000 in credits, is the target of a lawsuit filed by Payton and several present and former players claiming he was involved with Read in the sale of the credits. The suit is scheduled for trial in U.S. District Court in New Orleans on June 18.
Read is the only person who has faced criminal charges. The Saints organization has repeatedly refused to comment on the case.