Humble Baron gets more time as bankruptcy questions mount

More than $100K in post-bankruptcy transfers, a $1.1M IRS claim, and unfiled tax returns remain unresolved

2:48 p.m. Aug. 19, 2026

DUANE CROSS
MCO Publisher•Editor

Humble Baron avoided an immediate Chapter 7 bankruptcy conversion Wednesday, but the company still faces questions about more than $100,000 in post-bankruptcy transfers, a roughly $1.1 million IRS claim, unfiled tax returns, and disputed rent obligations.

A federal bankruptcy judge agreed Wednesday morning to continue a hearing on whether Humble Baron’s Chapter 11 case should be converted to Chapter 7, dismissed, or placed under a trustee.

The next hearing is set for 9:30 a.m. Sept. 14.

The ruling keeps Humble Baron in Chapter 11 for now. It does not resolve the problems that brought the company back before the court.

More than $100,000 transferred after bankruptcy filing

At the center of Wednesday’s hearing were transfers Humble Baron made after filing for bankruptcy.

The U.S. Trustee told the court that Humble Baron had made at least $66,000 in transfers to insiders and affiliated companies after the Chapter 11 case began.

The Observer previously reported that Humble Baron was required under an agreed order to return $66,350.66 to its debtor-in-possession account by Aug. 1 and provide proof of the deposit by Aug. 3. The U.S. Trustee later filed a notice of default after those deadlines passed.

Wednesday, the court heard that the money still has not been repaid. A later monthly operating report also showed another roughly $40,000 in transfers, pushing the total above $100,000.

Humble Baron attorney W. Thomas Bible Jr. did not dispute that the transfers occurred. He argued that management stopped them after the issue was raised and is working to recover the money.

Bible told the judge that proceeds from a delayed real estate closing are expected to fund repayment. He also said he is pursuing a family loan that could allow the estate to be repaid within days or weeks.

Receiver pushes for Chapter 7

Phillip G. Young Jr., the court-appointed receiver in the related Uncle Nearest litigation, supported converting Humble Baron’s case to Chapter 7.

Chapter 11 generally allows a business to continue operating while it reorganizes its debts. Chapter 7 would instead place the bankruptcy estate under a trustee who could liquidate assets and pursue recoveries for creditors.

Young pointed to other post-bankruptcy spending that he argued appeared personal or outside Humble Baron’s ordinary business operations, including restaurant, airport, and other charges.

He previously alleged in court filings that Humble Baron made nearly $292,000 in transfers during the 90 days before filing bankruptcy, much of it to insiders or related companies. He also alleged nearly $60,000 was spent after the bankruptcy filing while rent and escrow obligations remained unpaid.

IRS debt presents larger hurdle

The U.S. Trustee also raised another major obstacle to reorganization: Humble Baron’s federal tax problems.

The IRS has filed a claim of roughly $1.1 million against the company. About $700,000 is classified as priority tax debt, meaning it generally must be addressed ahead of many other unsecured debts in bankruptcy.

The court also heard that Humble Baron apparently has not filed federal tax returns for at least three years.

The unfiled returns could complicate any Chapter 11 reorganization, which requires Humble Baron to demonstrate a workable plan to address its debts.

The Trustee also cited roughly $200,000 in other transfers to affiliated companies that could potentially be challenged and recovered for the bankruptcy estate.

Two leases, two different rent figures

The court also heard conflicting information about Humble Baron’s rent obligations.

The company operates on property at 3125 U.S. 231 North in Shelbyville that is part of the Uncle Nearest receivership.

Competing lease documents appear to put Humble Baron’s monthly rent at dramatically different amounts – roughly $5,000 under one and $17,000 under another.

There are also unresolved questions about escrow payments and whether rent owed before the bankruptcy filing remains unpaid.

Young previously argued that Humble Baron had failed to pay pre-bankruptcy rent or fund an agreed-upon escrow account tied to the lease.

Humble Baron seeking new counsel

Humble Baron is also seeking to substitute new bankruptcy counsel because of what the court was told is a conflict that arose after the bankruptcy petition was filed.

That issue remains unresolved ahead of the Sept. 14 hearing.

For now, the judge has chosen not to convert the case to Chapter 7 immediately.

By Sept. 14, Humble Baron will likely need to show that the more than $100,000 transferred after bankruptcy can be recovered, that its tax problems can be addressed, and that there is a credible financial path forward.

The transferred money is now only one part of the challenge. Humble Baron must also answer questions about its taxes, rent obligations, and whether it has enough financial footing to reorganize at all.