BOSTON — U.S. Bankruptcy Court Judge Janet Bostwick approved a settlement agreement in the case of Yarmouth-based Levee Breaks Investment Group on Monday. Creditors including 55 investors reported about $4.5 million in losses, according to the bankruptcy trustee.
The settlement requires Brian Serpone, owner of Alpha Entertainment Group d/b/a The Music Room and Serpone Innovations LLC, to pay $375,000 over the course of eight years. A mortgage of $100,000 on Mary Katherine Serpone’s West Yarmouth home was given as additional security. Bankruptcy trustee David Madoff said there was just over $100,000 equity in the house. Mary Katherine Serpone is Brian Serpone's wife.
Should Brian Serpone fail to make the $3,906.25 monthly payments, a 12% annual interest will accrue, according to court documents. In addition, a full judgement amount of $750,000 will be immediately due.
A bankruptcy filing in 2021
Serpone established Levee Breaks Investment Group in 2015 and filed for Chapter 7 bankruptcy Oct 22, 2021 . Seventy creditors, including 55 investors, reported losses of $4.5 million. Serpone owned Serpone Innovations LLC before the business was dissolved by the Secretary of the Commonwealth on June 20, 2021. Serpone Innovations performed construction and rehabilitation work on properties purchased by Levee Breaks for sale and rentals.
Individuals are often harmed in bankruptcy situations, Bostwick said, but said she believed Madoff exercised “reasonableness” in his decision. Trials take time and money, she said, adding that Madoff was able to negotiate a settlement with Serpone.
“Bankruptcy can only do so much,” Bostwick said. “Trustees can only do so much. I’m satisfied it falls within the range of reasonableness.”
The settlement amount must be satisfied in full no later than Sept. 30, 2032, according to court documents.
Starting in 2015: Levee Breaks, a timeline of the Yarmouth bankruptcy that left 70 creditors holding the bag
Brian Serpone was not in the courtroom for the hearing. His lawyer, Edmund Myers, said his client and wife, who was not party to the lawsuit, were willing to put this behind them.
Investor Nancy Marble was present in the courtroom to object to the agreement. Her lawyer, Christopher Jantzen, told the judge that Brian Serpone and his wife should have had to go through discovery and deposition. Serpone never had to testify under oath, he said. Jantzen called Mary Katherine Serpone an active participant in the investment scheme.
“He’s harmed a lot of people,” Jantzen told the judge. “There are human beings behind these machinations. This is too sweet a deal for Mr. Serpone and his businesses.”
But Madoff said he was prepared to take depositions but agreed to the settlement after nearly two hours of negotiation. He called it a fair settlement.
"He doesn't have any money or assets," Madoff said. "He can barely afford $3,900 a month."
Bostwick said she was satisfied with the agreement considering the maximum amount of money recoverable and the ability to collect the money from Brian Serpone. Marble wasn't satisfied at all.
"I am very disappointed," she said as she left the courtroom.
Denise Coffey writes about business, tourism and issues impacting the Cape’s residents and visitors. Contact her at dcoffey@capecodonline.com .
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This article originally appeared on Cape Cod Times: Federal judge makes decision on $4.5M Yarmouth investment company bankruptcy
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