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RSI bankruptcy trustee says Bala withholding assets

A Fargo woman convicted of illegal gambling is withholding about $64,000 in assets from creditors of her bankrupt company, Racing Services Inc., a bankruptcy trustee says.

A Fargo woman convicted of illegal gambling is withholding about $64,000 in assets from creditors of her bankrupt company, Racing Services Inc., a bankruptcy trustee says.

Susan Bala, who awaits federal sentencing for operating an illegal gambling parlor, refuses to turn over $50,000 she borrowed against a life insurance policy that she bought with RSI money, said Kip Kaler, the bankruptcy trustee representing RSI's estate.

Bala borrowed against the insurance policy in November, months after her simulcast sports-betting company filed for bankruptcy and without Kaler's consent, court records say.

"She owns the policy, but she can't just cash it out and use it," Kaler said. "I don't think she would ever pay it back then."

In court records, Bala says she paid some of the policy premiums with her own money.

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"That's what she contends," Kaler said. "She'll have to prove it."

Attempts Friday to contact Bala at her home and her attorney's office were unsuccessful.

Bala's attorney, Mark Beauchene of Fargo, said late Friday he was not prepared to answer any questions regarding the RSI bankruptcy.

Kaler said Bala should also hand over $14,200 worth of home furniture that was bought with RSI funds.

RSI's bankruptcy petition listed assets of about $7.2 million and debts of $10 million.

Bala initially hoped to reorganize her company under Chapter 11 bankruptcy, but U.S. Bankruptcy Judge William A. Hill condemned RSI to liquidation in June.

Kaler said he has collected about $480,000 in liquidating RSI's assets, and has paid out about $100,000 in expenses.

The liquidation likely will not generate more than $500,000, he said.

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Kaler is chasing some accounts receivable, including a court judgment that required a Mexican company to pay RSI $1.4 million, he said.

In the end, the state of North Dakota likely will get some of the $6.5 million it's owed in taxes, while unsecured creditors could be left empty handed, Kaler said.

Hill will consider ordering Bala to hand over the furniture and loan money during a court hearing Tuesday.

Hill ordered Bala to appear earlier this week for questioning about the assets, despite her request for a delay.

Bala wanted her testimony to wait until after her criminal cases in federal and state court are completed.

In February, a federal jury convicted Bala on 12 counts related to running an illegal gambling site in south Fargo. The jury ordered RSI to forfeit $99 million to the federal government.

Bala's sentencing hearing is April 29.

On Friday, a state district court judge dropped related charges against Bala and RSI Vice President Raymundo Diaz.

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Readers can reach Forum reporter Jeff Zent at (701) 241-5526

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