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Top Baltimore attorney files for bankruptcy after horse business fails

Baltimore litigator Jay D. Miller, of the Law Offices of Peter Angelos. (The Daily Record / File photo)

Baltimore litigator Jay D. Miller, of the Law Offices of Peter Angelos. (The Daily Record / File photo)

Prominent Baltimore litigator Jay D. Miller, of the Law Offices of Peter Angelos, has filed for personal bankruptcy after his horse-racing business failed and he wound up with nearly $1 million in unpaid taxes.

In a Chapter 7 bankruptcy filing last month, Miller reported $1.53 million in loans from his boss, Peter G. Angelos, and a $940,000 lien by the Internal Revenue Service on his Harford County home, along with car loans and credit card debt.

Miller has been with the Angelos firm since 2013. During his time at the firm, he started a horse breeding and racing business, JP Racing Inc., which was funded with loans from Angelos, according to Thomas Minkin, senior attorney at the Baltimore law firm.

Minkin said Monday that there was “nothing unusual” about Angelos’ loaning money to Miller, calling Angelos “an extremely generous man.”

“This is simply a loan to a friend,” Minkin said. “This in no way, shape or form impacts Jay’s position in this office.”

Miller declined to comment Monday. Angelos, who has been out of the office due to health issues, was unavailable for comment.

Robert Grossbart, Miller’s bankruptcy attorney, said Monday that there was one year when money that should have gone to pay taxes instead funded JP Racing Inc. The company was formally incorporated in 2016, according to state records.

“This is not a pattern,” said Grossbart, of Grossbart, Portney & Rosenberg P.A. in Baltimore. “This was a single year. It was a large, isolated event.”

Grossbart declined to comment on the details of Miller’s tax liabilities but stressed that there had been no criminal conduct on Miller’s part.

“Monies that should have gone to payment to the IRS (didn’t),” he said. “It’s not that he didn’t report; he reported everything.”

After attempting to negotiate a solution with the IRS, Miller filed a bankruptcy petition when his wages were garnished. Chapter 7 bankruptcy is primarily used to discharge debts and to “give an honest individual a ‘fresh start,’” according to the federal courts website.

Grossbart characterized the bankruptcy process as “stressful” but said he believed that in three to four months Miller will obtain a discharge.

“What ends up happening is it takes a load off of people,” Grossbart said. “But you have to go through it.”

‘Full confidence’

Minkin said he works with Miller regularly and has no concerns about his personal bankruptcy.

“He has the full confidence of the Angelos family,” said Minkin, who has been at the firm since 1966. “His work has not suffered one bit and he’s considered to be one of the most significant lawyers in this office and continues to be.”

Miller has been behind massive litigation awards since he joined the Angelos firm, including, in 2014, a $37 million settlement in two class-action lawsuits against St. Joseph Medical Center in connection with a cardiologist who implanted unnecessary stents.

In 2015, Miller obtained a $28 million jury award for a patient with a misdiagnosed ulcer who required dozens of surgeries. Last year, Miller filed two suits on behalf of families that alleged the weed killer Roundup causes cancer, as well as a potential class-action lawsuit against 3M Co. alleging the company knowingly sold defective earplugs to the military.

Miller was previously a partner at Miller, Murtha & Psoras LLC in Timonium.

The Law Offices of Peter Angelos opened its doors in 1961 and made its name litigating asbestos cases, including a class-action suit on behalf of steel, shipyard and manufacturing facility workers. Angelos became the majority owner of the Baltimore Orioles in 1993 and has donated millions to the University of Baltimore, which named its law school building after his parents.

‘They didn’t win enough’

At its peak, JP Racing had nearly 30 horses, with some racing and even winning, according to Grossbart. But, he added, “at the end of the day they didn’t win enough.”

The loans from Angelos, which came from the firm, had to be listed in the bankruptcy filing, according to Grossbart, and are classified as business debt that is unsecured. But Miller is not attempting to discharge the loans in bankruptcy, Grossbart said.

Grossbart said that while Miller has “nothing to be ashamed of,” he’d rather not have to file bankruptcy, even though doing so is a strategy for getting out of debt.

“Then again, nobody wants to file bankruptcy,” Grossbart said. “Nobody walks into my office and is happy to be here.”

In bankruptcy court filings, Miller estimates his monthly take-home salary to be $21,230, or more than $250,000 per year. Grossbart said he has filed bankruptcy petitions on behalf of attorneys, judges and other prominent figures who have found themselves in need of relief.

“Your earnings (are) not your net worth,” Grossbart said. “It’s what you do with your earnings. And some things are more risk-oriented than others. For better, for worse, Mr. Miller enjoyed the excitement of the horse breeding industry (and) took some risks — you’ve got to play to win kind of mentality.”

While Miller “didn’t bury his head in the sand” when it came to his financial issues, Grossbart said, bankruptcy became his only option.

“There (was) more than one factor that came to Mr. Miller’s attention when the obvious was in front of him and he knew he had to change course,” Grossbart said. “I don’t think it was a single event. It was an accumulation of events, as many things are in life.”

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