Pearlman Loses Assets

Boy-band impresario Lou Pearlman’s lakefront home near Orlando, Fla., sold for $7.1 million and a condo in Atlantic City, N.J., went for $334,000 as the latest assets were approved for sale by a federal judge September 6th.

Pearlman’s former Church Street Station property was previously sold for $34 million. The first of several new businesses in the complex, Dolce, will reopen in what used to be Club Paris – a pink-themed celebutorium associated with socialite and jailhouse veteran Paris Hilton.

But at least the one-time mogul still has a roof over his head. Pearlman, who identified himself in Indonesia as "Incognito Johnson" before his June arrest and extradition, has been cooling his heels in an Orlando jail on multiple fraud charges.

The bankruptcy case was filed as Pearlman went on the lam in the wake of his business empire’s financial collapse earlier in the year.

In a 50-minute hearing on more than two dozen Pearlman-related matters, U.S. Bankruptcy Judge Arthur Briskman cleared the way for the sale of the 9,000-square-foot home, a guest house and an adjoining lot.

Pearlman remains in an Orlando jail on separate federal indictments in three counts of bank fraud and single counts of mail and wire fraud in connection with Integra Bank of Evansville, Ind. All told, he’s accused of defrauding the bank $20 million.

Meanwhile, Briskman also delayed a ruling on singer Aaron Carter’s motion voiding recording and management contracts he signed with Pearlman in 2004.

Trustee attorney Denise Dell-Powell said no attempt would be made to enforce the deal, but trustees needed more time to study music recording and royalty questions.

Carter lawyer Clay Townsend told the Orlando Sentinel that meant his client was essentially being freed from any contractual ties with Pearlman.

"The contract is over, so the question now is, who owns the music track masters?" he said.

In other actions, Briskman approved efforts to seek the return of $22,467 in Pearlman deposits for a planned 10-day November cruise on the Queen Mary 2 with several associates, the assignment of three lapsing life insurance policies and the abandonment of lower-bowl season tickets for Orlando Magic NBA games.

"We tried to market these and got no interest," trustee attorney Denise Dell-Powell said.

Florida investigators separately allege that Pearlman defrauded more than 1,000 individual investors out of more than $315 million, though no other legal actions have yet been taken against him.

Several banks say he collectively owes them more than $120 million, according to bankruptcy court documents.