Patricia Kluge, who was once the wife of one of the wealthiest men in the country, has filed for Chapter 7 bankruptcy protection. Kluge’s Virginia estate was foreclosed earlier this year.
It's been a spectacular turn of events for the British-born model, the former third wife of John Kluge. In 1989, John Kluge had a personal fortune that was estimated at $5.2 billion. In 1990, John and Patricia divorced, and she reportedly received a settlement of about $1 million in cash per year.
She also received a grand estate in Charlottesville, Virginia, which was once valued at about $100 million. The mansion on the estate, Albemarle House, boasts 13 bathrooms, eight bedrooms, stables, and a helipad. It was doubtlessly an expensive property to maintain, but it wasn’t just exorbitant upkeep costs that drove Kruger into bankruptcy. It was the winery that she decided to establish with her third husband.
In 1999, Kruger and her third husband, William Moses established Kluge Estate Winery and Vineyard on a plot of 960 acres. The plan was to develop local vintage wines, and promote the Virginia winery industry. Over the next few years, the couple made aggressive plans for business expansion, including taking out $65 million in loans.
The plans became even more ambitious. Kluge and her husband decided to build super luxurious villas, complete with outdoor kitchens and tennis courts. These homes cost millions of dollars, but then, the housing bubble burst. There was no demand for the luxury homes, and in 2009, Kluge placed her estate up for sale. The initial asking price of the house was $100 million dollars, which dropped to about $24 million. Finally in February this year, the bank foreclosed on the house.
According to California bankruptcy lawyers, Chapter 7 bankruptcy is the most common form of bankruptcy filing, and provides an individual a chance to emerge from a financial crisis with all relieved. Under Chapter 7 bankruptcy protection, all non-exempt assets are sold, and the proceeds are used to pay off debtors.
