Real Housewives' Sonja Morgan Must Pay $7M, Court Rules

By Cynthia Hsu, Esq. on May 26, 2011 | Last updated on March 21, 2019

For Sonja Morgan, judgment by a U.S. Court of Appeals means that she will be paying $7 million for pulling out of a film titled "Fast Flash to Bang Time." Morgan, star of the Real Housewives of New York, declared bankruptcy in November.

According to the court, Morgan's conduct to Hannibal Pictures, who was making "Fast Flash to Bang Time" was fraudulent. Reportedly, Morgan pulled out because talks with John Travolta, said to have been in talks to star in the creatively-named film, was demanding "various conditions" that her company was not able to provide.

Morgan seems to be in dire financial straits to say the least. In her November bankruptcy, she cited that most of her debt came from the failed venture with Hannibal Pictures. She had listed she was $19.8 million in debt, with only $13.5 million in assets, according to The Hollywood Reporter.

The Court of Appeals' judgment will force Morgan to shell out the $7 million to Hannibal Pictures, regardless of her bankruptcy filing.

For many, declaring bankruptcy is giving them a clean, debt-free slate. But, there are simply some debts you cannot discharge. For example, if you have student loans, you cannot discharge these debts through a bankruptcy filing.

And, as a matter of public policy, debts that are incurred through fraud cannot be discharged. So are debts incurred from certain lawsuits that were the result of your wrongdoing.

So, by winning this court case against Morgan, Hannibal Pictures now will have a judgment that says that Morgan defrauded them - and in this case, even if the debt is somewhere on her bankruptcy filing, it cannot be discharged with her other debts. She will have to pay up.

The Sonja Morgan judgment seems to only add to collective financial woes of the many Real Housewives stars. Another Housewives star, Teresa Giudice, also filed for bankruptcy in 2009. It's only a pity that a movie titled "Fast Flash to Bang Time" won't be gracing the big screen anytime soon.

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