An ad hoc group of creditors in Brett “Mac” McClafferty’s bankruptcy proceedings is seeking a 60-day extension to file a “nondischargeability action” against him because he continues to evade requests for information and acts with “utter disregard for his duties as a chapter 13 debtor and general disrespect for the bankruptcy process,” according to a motion filed Thursday in U.S. Bankruptcy Court in Delaware.
The group — called the “McClafferty Victims” in their filings and “Voluntary Lenders” by McClafferty — comprises some 17 individuals or closely held micro businesses that gave him money on behalf of his now defunct Mac Private Equity for investment purposes. In return, he gave them a promissory note to repay the money, according to court documents. Each of them has a lawsuit pending against McClafferty, and two have been awarded judgments in Virgin Islands courts, one for $45,000 and another for $110,000, the motion states.
Their claims are subject to exception from discharge, it says, adding that none of them possesses great wealth and they “have all suffered financial harm at the hands of Mr. McClafferty’s fraudulent schemes.”
Mac Private Equity — which was 100 percent owned by McClafferty, who is also co-owner of St. Thomas Social, a restaurant and bar in Yacht Haven Grande on St. Thomas — filed for relief under Chapter 7 of the Bankruptcy Code on March 4, 2025. On Nov. 7, McClafferty filed for relief under Chapter 13, which his creditors allege was to avoid further collections processes in the Virgin Islands.
After William F. Jaworski Jr., the Chapter 13 trustee, filed an amended motion March 17 to dismiss the case because McClafferty’s debts “in excess of $3,618,000” significantly exceed the thresholds set forth under section 13079(c) of the Bankruptcy Code, the Mac Private Equity creditors filed a motion to convert the case to Chapter 7, rather than dismiss it.
According to Jaworski’s amended motion, McClafferty’s conduct, “characterized by the failure to list all assets, concealment of income, the maintenance of a lavish lifestyle, and the funding of personal political ambitions while in bankruptcy falls far short of the ‘honest debtor’ standard. Such conduct warrants immediate dismissal.”
Jaworski noted that McClafferty did not accurately disclose his continuing stream of income from Social Hospitality Group, which owns St. Thomas Social, “has engaged in significant post-petition discretionary spending that is neither reasonable nor necessary for his support or maintenance,” and according to the Delaware Department of Justice, his proposed plan cannot be confirmed because he failed to file state tax returns for 2021 through 2024.
According to their motion, despite “diligent effort and investigation, the McClafferty Victims have been unable to find any evidence that Mr. McClafferty filed personal income tax returns for 2021–2024 in any jurisdiction.”
Meanwhile, George L. Miller, the trustee in the Chapter 7 petition for Mac Private Equity, filed a status report in March claiming McClafferty “was not able to adequately answer questions of the Trustee, counsel or creditors” at a meeting in October or in subsequent meetings. Miller reported that as far as he can tell, “None of the records obtained to date demonstrate anything other than Mr. McClafferty using corporate funds for personal expenses.”
McClafferty, who is running for delegate to Congress while also facing felony bank fraud charges in V.I. Superior Court on St. Thomas, with a current jury selection date of Nov. 3 — the same day as the General Election in which he is a candidate — has denied wrongdoing and has objected to Jaworski’s motions to dismiss the Chapter 13 petition.
He states, among other things, that none of the victims’ claims has been liquidated in the courts of the Virgin Islands and he intends to file objections to each of them. Regarding the proof of claim of $3,168,000, McClafferty said that because it and the alleged victims’ claims are “disputed, unliquidated, and based upon unajudicated allegations of liability, and because no court has determined that the Debtor is personally liable for any of these obligations, these claims cannot properly be counted toward the Debtor’s eligibility limits under 11 U.S.C. § 109(e) at this time.”
He was more blunt in his summation in a Facebook post in April. “We had no obligation to ‘invest’ anything lol. That’s the part you’re missing,” he posted on What’s Going on St. Thomas about the Mac Private Equity case. “Not a single one of our lending agreements obligated us to ‘invest’ anything. MPE was a startup PE [Private Equity] firm operating on a burn rate. It collapsed before it could take off. It’s a shame — but that’s life on the Serengeti; you win some, ya lose some,” he said, concluding the post with a shrug emoji.
In their motion for an order to convert the case to Chapter 7, his alleged victims claim that McClafferty has treated them and his other creditors “atrociously before and during this Case. He has lied under oath, used the territorial and federal courts of the Virgin Islands — and now the United States Bankruptcy Court for the District of Delaware — to play games, delay and hinder the McClafferty Victims’ recoveries.”
According to that motion, his outright disregard for his duties as a bankruptcy debtor “can only be seen as willful and malicious,” having stymied a meeting between himself and the creditors, known as a 341 meeting, and timed “to avoid further collections processes in the Virgin Islands.”
In their filing Thursday, they said nothing has changed since their first motion to extend and that since their last contact with Jaworski on May 28, McClafferty still has not provided his tax returns and “clearly has no intent to comply with the requirements of being a chapter 13 debtor.”
It would be a pointless and expensive waste of time for them to fight for a court order to force production of required information, they said, because he “will predictably ignore” it, then they will come back to the Court with more motions seeking sanctions and another order, “which Mr. McClafferty will predictably ignore.”
Judge Brendan Linehan Shannon, who is presiding over both the Chapter 13 and Chapter 7 cases, had not ruled on the creditors’ motion as of Saturday.
