Hoboken 3rd Ward Councilman Mike Russo, along with his wife, filed for Chapter 7 bankruptcy just over a year ago, claiming $2,045,888 in total liabilities, according to court records.
By John Heinis/Hudson County View
“I went through a real rough time during COVID: I made financial decisions to keep my business open to make sure my employees were being paid. I did that at my expense, and unfortunately it didn’t work out. Like thousands of New Jerseyans, COVID really did a number on me,” Russo said over the phone.
He declined to get into specifics since the case is still pending.
Russo, the most senior member of the Hoboken council who was first elected in 2003, lists $1,379,626 in “nonpriority unsecured claims” and $666,261 in creditor claims “secured by property,” according to the 60-page filing from February 18th, 2022.
The application was prepared by Brian D. Winters of the Bradley Beach-based law firm Keith, Winters, Wenning & Harris and states that Russo has $167,568.57 in total property assets.
Personal assets listed include household goods, furnishings, clothing, wedding bands, and a Colt 1911 pistol for a total value of $15,500.
Additionally, the creditor claims secured by property come from two places: a $71,246.60 claim from the Santander Bank in Cherry Hill – who won a collections lawsuit against Russo – and a $362,520 judgement lien from a Belmar home owned by the New Jersey U.S. Attorney’s Office.
He lists $197,765 as the unsecured portion of the claim. As for the unsecured claims, the vast majority come from Blue Cross Blue Shield in the form of $1,050,000 in business debt – Russo, the chair of council’s finance subcommittee, worked as a physical therapist by trade.
The filing also indicates that this specific claim is being disputed and has no additional details.
Furthermore, two credit cards account for just under $44,000 in debt, while Russo says he makes $88,141.80 a year: $22,273.92 as a councilman (which doesn’t account for their raises that took effect last year) and $65,867.88 as an employee of the Passaic Valley Sewerage Commission in Newark.
U.S. District Court Judge Rosemary Gambardella was expected to hear the case this week, but she granted the government an order extending time to file a motion to dismiss the case, scheduling a hearing for the end of March.
The U.S. Department of Justice, through the Office of the U.S. Trustee, is challenging the filing since the majority of the claims are for business debt, as opposed to consumer debt.
“The Debtors [Russos] indicate that their debts are primarily consumer debts … yet the debts listed … in the amount of $1,379,626.40 appear to be primarily non-consumer debt,” Tina L. Oppelt wrote in support to the OUST order extending time to file a motion to dismiss.
This is the fifth time since June 14th, 2022 that the OUST has filed such a motion.
Russo, the son of late former Mayor Anthony Russo and a potential 2025 mayoral candidate, reported $67,456.02 cash on hand – the most of any Mile Square City council member – in his latest campaign finance filing from October 22nd, 2022.
In that New Jersey Election Law Enforcement Commission (NJ ELEC) filing, he lists a $1,300 monthly expenditure in July, August, and September for an office space at the Monroe Center in Hoboken.
In the bankruptcy, he lists his rent for the Monroe Center as one of his liabilities.
Rebovich Institute of New Jersey Politics Director Micah Rasmussen said that this matter could come into play in the non-partisan November 7th elections where Russo is seeking re-election, though several other factors will also come into play.
“Personal financial problems can absolutely become campaign problems, and they often do. The first prerequisite is that a candidate has to be facing a competitive opponent, obviously enough. No issue is going to matter if a candidate will be easily re-elected,” he said.
“But in a competitive race, the classic campaign question is: why should we trust you with our finances if this is how you’ve handled your own? And that can be valid, especially where public salaries are a part of the picture, which are stable and predictable. Voters will assess for themselves whether they believe the problems are something that could have happened to anyone or whether they were avoidable.”
Rasmussen added that this is a public proceeding, as is running for office, so it’s fair game on the campaign trail, though some candidates may consider it too personal to want to bring up.