Records: McMahons owed nearly $1 million in 1976 bankruptcy
Hartford — Bankruptcy records located at the office of the National Archives and Records Administration in Massachusetts show Linda and Vince McMahon facing a total $955,805 in claims in 1976 from 26 distinct creditors.
In her two U.S. Senate campaigns, Linda McMahon, a Republican, has often told the story of how she went from personal bankruptcy to building the family business, World Wrestling Entertainment, into a global brand. But she has declined repeated requests to release any documents pertaining to the bankruptcy filing.
The Day this week obtained a copy of the only remaining public documents related to the filing in the Waltham, Mass., facility. Other documents related to the file were likely shredded after 20 years had passed, records clerks said. The documents obtained by The Day offer the most complete picture available to date of how much money the McMahons owed in 1976, and to whom.
According to inflation calculator websites, the McMahons' debt would be about $3.9 million in 2012 dollars. Yet despite the new details, it remains unclear how much of their debt the McMahons ultimately repaid.
"Today was the first time the campaign or Linda has ever seen these documents," Corry Bliss, McMahon's campaign manager, said Tuesday night.
Bliss said that neither Linda nor Vince McMahon possessed copies of their bankruptcy proceedings and said Linda has been forthright about this period in their family's history.
He noted how during McMahon's 2010 run, her campaign told reporters that the 1970s bankruptcy debt amounted to about $1 million.
"These documents verify everything that Linda McMahon and her campaign have said about her bankruptcy for the past four years," Bliss said. "This was a very difficult and humbling time for the McMahons — they were a young couple trying to make their way in the world. Frankly, one of the reasons so many people support Linda is because they can relate to the struggles she went through."
The personal finances of McMahon and her Democratic opponent, Chris Murphy, have become central to this year's campaign, with McMahon calling on Murphy to release documents related to his financial problems in the mid-2000s.
The bankruptcy documents show the McMahons' biggest creditor as the former Mattatuck Bank & Trust Co. of Waterbury, which claimed $364,492. The second biggest creditor — a secured creditor — was Harold J. Hemingway of Burlington, who claimed $109,575. The next biggest was the Internal Revenue Service: $100,064.
Creditors also included the Bristol Construction Co. Inc. ($67,452.54); the Southern New England Telephone Co. ($5,698.17); and Sears Roebuck Co. ($1,158.27). Many of the banks and businesses listed have since gone out of business or been merged into other institutions.
The bankruptcy was initiated in April 1976, three months after the Connecticut Bank and Trust Co. foreclosed on the McMahons' Orchard Road home in West Hartford. At the time of foreclosure, the McMahons owed $133,167 on the mortgage, according to land records in West Hartford Town Hall.
Following a series of objections by the creditor banks over discharging the couple's debt, the discharge was granted in February 1977.
But the case didn't officially close until February 1982. During a final round of actions in U.S. Bankruptcy Court, a trustee for the creditors paid out $1,264.86, and the McMahons regained possession of a 1972 Buick Riviera, according to the documents.
Land records show how the McMahons' West Hartford home was eventually auctioned for $147,500 in October 1976.
The McMahon campaign called this week on Murphy to release all documents related to his home foreclosure scare in the mid-2000s.
According to McMahon's campaign manager, the documentation might answer whether Murphy received any preferential treatment from Webster Bank that offered him a home equity line of credit in 2008 despite the 5th Congressional District representative's checkered financial history of missed mortgage and rent payments. The bank's political action committee was one of Murphy's campaign contributors.
"Transparency in this case seems to be the furthest thing from Congressman Murphy's mind, leaving the electorate the distinct impression that there is something there worth hiding," Bliss, McMahon's campaign manager, said in a Monday news release.
For his part, Murphy says he repaid all of his creditors and criticizes McMahon for apparently stiffing hers in jettisoning much of her debt through bankruptcy.
"It's wrong that McMahon made hundreds of millions of dollars at the WWE but still has not paid back the people she owes from her foreclosure and bankruptcy," Murphy's campaign spokesman, Ben Marter, said Tuesday night.
McMahon's campaign contends that there are key distinctions between the McMahons' bankruptcy experience — decades before Linda McMahon sought public office — and the troubles Murphy faced by not paying his rent as a sitting state senator and the foreclosure proceedings that began two months after he was sworn in to Congress.
The pre-foreclosure actions on Murphy's Cheshire home stopped once he paid the due balance.
"Unlike Congressman Murphy, (the McMahons) weren't able to call in their political connections and make their debts go away or give them a new mortgage," Bliss said.
The McMahons paid the $100,064 they owed the IRS, Bliss said, and likely repaid additional money claimed by the creditors.
Webster Bank emphatically denies giving Murphy any preferential treatment.
Vince McMahon spoke about the couple's bankruptcy experience in a 2001 interview with Playboy Magazine. The interviewer noted how the bankruptcy happened after Vince "made his first fortune."
"It was visions of sugarplums," Vince McMahon told the magazine. "It was, 'Look how successful I am! I guess I really am somebody.'
"I got involved with people who weren't that bright and let them tell me that I needed tax shelters. There was a construction company, a horse farm, a cement plant, and it all went belly-up. I felt bad about the bankruptcy. I wanted to pay what I owed, but there were other people involved, and finally the banks wrote it all off."