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Lyons cohort files 5th claim of bankruptcy

Bernice Edwards, who soon will be sentenced on federal tax evasion charges, filed in Milwaukee.


© St. Petersburg Times, published September 22, 1999

Bernice Edwards, accused of helping fallen Baptist leader Henry J. Lyons swindle millions of dollars from corporations, has filed for bankruptcy for the fifth time in her life.

But Milwaukee bankruptcy officials say the prospect that the court will ultimately accept her bankruptcy filing appears uncertain.

Edwards, after all, is soon headed to prison.

Edwards, 42, awaiting an Oct. 25 sentencing on federal tax evasion charges, last week filed for personal bankruptcy protection under Chapter 13, offering to repay her debts on a schedule.

In papers filed in Milwaukee, the only asset she listed was her Milwaukee home, which she valued at $52,000. She listed liabilities of $15,200 and told the court she had no income.

But Louis Jones, a trustee for the federal bankruptcy court in Milwaukee, said Edwards' preliminary bankruptcy filing did not provide a list of creditors or assets besides the house. Edwards has until Oct. 2 to do so.

Jones, who called Edwards a "serial filer," said the bankruptcy court will make a determination of whether the filing is a "good-faith effort" by Edwards to repay her debts.

"There is a tendency to scrutinize a filing much more closely when we see multiple filings over a period of years," said Jones, who will make a recommendation to the court about whether to accept Edwards' bankruptcy.

The court also will take into consideration Edwards ability to repay, Jones said. Since Edwards is expected to be sentenced to 15 to 30 months in prison next month, that could provide the court with another reason for rejecting her bankruptcy.

The net effect of a rejection, Jones said, might be that Edwards would lose to creditors her Milwaukee home, which might otherwise be protected by bankruptcy.

There also is the matter of the Internal Revenue Service, which says Edwards owes taxes on more than $500,000 in unreported income during her tenure as Lyons' aide for the National Baptist Convention USA.

A tax obligation, said Jones, might also hinder court bankruptcy approval.

Edwards could not be reached for comment.

In 1992 and 1994, Edwards filed for Chapter 13 bankruptcy protection. Both times, her filings were not approved.

In 1993, she filed for Chapter 7 bankruptcy protection on behalf of one of her companies, Better Living Academy Inc. She also filed under Chapter 7 for her personal debts.

In that year, most of Edwards' more than $100,000 in personal and business debt was wiped out by court order.

The jury that convicted Lyons of state racketeering and grand theft charges Feb. 27 acquitted Edwards. But the mother of three pleaded guilty to tax evasion charges in federal court March 25.

Edwards was the Baptist convention's director of public relations while Lyons was president. He is serving a 51/2 year prison sentence.

-- Times researcher Kitty Bennett contributed to this report.

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