Metra boss who killed himself had 2 other households
BY MARY WISNIEWSKI Transportation Reporter December 7, 2010 12:50PM
Former Metra head Philip Pagano was supporting three households -- including his own -- before his suicide in May, according to a bankruptcy trustee. | AP
Updated: April 19, 2011 5:10AM
Former Metra head Philip Pagano was supporting two other households in addition to his own before his suicide in May, the trustee for his widow’s bankruptcy case said.
James Mullally, who represents Barbara Pagano, told a federal bankruptcy court last week about the existence of the other households, according to trustee Stephen Balsley.
Barbara Pagano claims she has been left with more than $1 million in debts.
Mullally said in court the other two households are in Palatine and Chicago. If Pagano was supporting three households, that could help explain why he was in need of so much cash despite being paid more than $1 million from Metra in 2010, mostly from a deferred compensation plan.
Pagano had been accused by the agency of taking $475,000 in unapproved vacation pay and had faced being fired by the board when he killed himself May 7 by standing in front of a Metra train. At least twice, he forged the signature of Metra chair Carole Doris to get the vacation money, according to a Metra investigation.
Balsley’s job as a trustee is to gather Mrs. Pagano’s assets and use them to pay off her creditors. Any assets from the other households would need to be gathered through a probate proceeding in McHenry County, where Mrs. Pagano lives, Balsley said.
“It’s possible the trustee can begin it. Usually the surviving spouse would start it,” Balsley said. “I have not heard from her attorney whether that process is started or whether it’s contemplated.”
He added: “We can then investigate who owns those other households and whether those are his property, which should pass to his wife through his estate. This will take some investigation.”
Balsley said he does not know who is connected to those other households, but assumes Mullally does. Mullally did not return phone calls from the Chicago Sun-Times seeking comment.
Balsley is challenging Mrs. Pagano’s claim that the $500,000 in life insurance money she has collected is exempt from creditors. Barbara Pagano is getting $80,000 a year in pension benefits from Metra. Bankruptcy records for Barbara Pagano show that there are two mortgages totaling $765,000 against the Pagano home in northwest suburban Crystal Lake. There are also large credit card bills, including nearly $10,000 owed to Nordstrom Visa and $50,000 owed to a United Airlines card.
Phil Pagano had also borrowed $840,000 against his Metra deferred compensation and life insurance accounts, and owed the agency $127,000 when he died. That debt is not included in the Chapter 7 bankruptcy filing.
Attorney James Sotos, who investigated Pagano for Metra, said Pagano had told him that the money he took from Metra was not for anything “illegal” or “immoral” but he refused to further elaborate.
“The only thing he told me is he very much needed the money,” Sotos said.