News

Linda McMahon To Repay Creditors In 1976 Bankruptcy

Linda McMahon (file / credit: Linda McMahon For Senate 2012)

Linda McMahon (file / credit: Linda McMahon For Senate 2012)

HARTFORD, Conn. (CBSNewYork/AP) - U.S. Senate candidate Linda McMahon says she and her husband will repay private creditors involved in their 1976 bankruptcy.

WCBS 880’s Paul Murnane On The Story

McMahon, a Republican, has used the narrative of rising out of bankruptcy to become the successful CEO of World Wrestling Entertainment as a part of her campaign.

But she also has been criticized by Democrat Chris Murphy for failing to repay all those debts, despite later making a fortune at WWE and investing more than $65 million of her own money into two campaigns for Senate.

McMahon had previously said she had no paperwork from the bankruptcy, but documents obtained by The Day of New London this week found records detailing $1 million in debt owed to 26 creditors.

The McMahons sought protection in April 1976, three months after the Connecticut Bank and Trust Co. foreclosed on their West Hartford home, on which they owned $133,167. The house was auctioned for $147,500 in October 1976.

The case was closed in February 1982.

McMahon’s campaign issued a statement Thursday night saying that after seeing the list of creditors for the first time this week, she and her husband began trying to find the ones that had not already been repaid.

“Over the past two days, Vince and I have begun attempts to locate and reach out to all individuals on the creditor list,” she said. “It is our intention to reimburse all private individual creditors that can be located. We feel it is the right thing to do to pay them in full, including an adjustment for inflation at four times the initial amount as show on the list of creditors.”

Murphy’s campaign criticized the move as disingenuous.

“The McMahons had the ability to pay these debts a long time ago. It’s a shame that it took 36 years and mounting political pressure for Linda McMahon to finally pay some, but apparently not all, of her debts,” Murphy spokesman Ben Marter said.

Murphy and McMahon are vying for the Senate seat being vacated by retiring independent Joe Lieberman, and their respective personal finances have become a large issue in the campaign.

McMahon’s campaign has filed an ethics complaint with the U.S. House accusing Murphy of using his congressional position to obtain a credit line after defaulting on mortgage payments on a home he owned in Cheshire.

Murphy has denied he received preferential treatment and has said he has repaid all of his debts.

(TM and Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)