Corona, CA: Councilman Steve Nolan files for bankruptcy

Corona City Councilman Steve Nolan has filed for personal bankruptcy, citing almost $2 million in business debts that include $3,361 owed to the city's Department of Water and Power.

He is seeking Chapter 7 protection, which eliminates most debts except for taxes.

Nolan cited a faltering economy that kept diners home when he closed a Backwoods BBQ restaurant on Green River Road last July. He moved another restaurant from a large McKinley Street building last August.

He briefly tried to make a go of it in the old Santa Fe Depot late last year but moved out after struggling to comply with zoning requirements. He now operates a catering-only business in Corona.

In documents filed in January in U.S. Bankruptcy Court in Riverside, Nolan listed $194,351 in assets, including his home and restaurant equipment, and liabilities of $1,950,123.

Nolan did not return two phone messages seeking comment.

Nolan's 121 unsecured, "nonpriority" creditors include banks, suppliers, landlords and maintenance companies. The amounts include $576,800 for the McKinley lease, a $190,000 restaurant construction loan, $98,000 for the Green River lease, $76,336 and $39,561 to two food suppliers and a $25,000 judgment against his business. The Press-Enterprise is also a creditor.

The unsecured creditors with "priority" claims include the state Board of Equalization, to which Nolan owes $141,968 in sales taxes; and the Riverside County treasurer's office, to which Nolan owes $3,000 in property taxes.

Nolan reported $3,500 in monthly income, including a $600 stipend for serving on the council, and $3,374 in monthly expenses. Nolan, a former Anaheim police officer, is not receiving retirement benefits and is in litigation with that city.

It's unclear whether Corona, a nonpriority creditor, could seek to recoup its money out of Nolan's stipend. City Attorney Dean Derleth could not be reached for comment.

Nolan's bankruptcy case came to light in the same manner as many of his political, professional and personal issues -- anonymous tips.

Last October, while Nolan was engaging in a public feud with the Corona Police Officers Association, e-mails and phone calls sent by unnamed individuals to The Press-Enterprise revealed that Nolan was being investigated by the state Fair Political Practices Commission after Nolan's campaign treasurer stole money from him; that Nolan sent harshly worded text messages to Police Chief Richard Madory after a Backwoods vehicle was impounded; and that he was operating his restaurant in the Depot, which is owned by the city Redevelopment Agency, while in violation of city rules and zoning laws.

Nolan, in past interviews, criticized the tipsters for trying to embarrass him as part of the police feud.