Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For release Wednesday, June 14, 2006.

Contact Bob Brammer, 515-281-6699

Statement of the Iowa Attorney General's Office

Summary of Bankruptcy Matter Regarding John Burche,
Maura Burche, and IJP, Inc.

Statement of the Attorney General's Office:

On June 7, 2006, the Bankruptcy Court for the Southern District of Iowa approved the final report in the bankruptcy of IJP, Inc., authorizing the distribution to satisfy claims of the unsecured creditors.

The Bankruptcy Court approved distribution of $310,000 -- $10,000 civil penalties each to the State of Iowa and the Davenport Civil Rights Commission, and a total of $290,000 to ten women who were aggrieved by the housing practices of John Burche. These "unsecured creditors" consisted for the most part of women who had filed sexual harassment claims against John Burche individually, and as a principal of IJP, Inc.

In a case tried in the Iowa District Court in Scott County in January 2004, judgment was entered against John and Maura Burche and IJP, Inc., finding a pattern or practice of sexual harassment of tenants in housing owned by IJP, Inc., and managed by John Burche. That judgment included awards of $10,000 compensatory and $25,000 punitive damages to both Jeannie Dobbs and Dawn Halligan, a permanent injunction barring the defendants from managing residential rental properties, and a civil penalty to the State of $50,000.

The Bankruptcy Court approved distribution of $310,000 -- $290,000 to Dobbs, Halligan and eight other women who were aggrieved by the housing practices of John Burche, and $10,000 civil penalties to the State and to the Davenport Civil Rights Commission.

The Bankruptcy Court approved the $35,000 distributions to Dobbs and Halligan, $35,000 to two other women claimants, and $25,000 each to six other women who had claimed sexual harassment and discrimination by Burche and his business. (The State of Iowa compromised its claim from $50,000 to $10,000 so more of the bankruptcy money would be available to the individual claimants.)

Assistant Attorney General Teresa Baustian, who handled the matter on behalf of the Iowa Civil Rights Commission, is slated to deliver the $190,000 in checks to the claimants on June 14 in Davenport.

Attorney General Tom Miller said: "This action was based on the fact that state and federal civil rights laws prohibit sexual harassment in housing situations - and civil rights agencies take these requirements very seriously. Landlords, managers and tenants all need to be aware of these requirements so such sexual harassment will not occur."

Background and details:

The Civil Rights Division of the Iowa Attorney General's Office filed two civil rights lawsuits in 2001 alleging Burche and his wife, Maura Burche, and their company, IJP, Inc., engaged in a pattern or practice of discrimination against two female tenants in violation of the Iowa Civil Rights Act.

District Court Judge John Nahra conducted a two-day trial in January 2004, which also included testimony by eight other female former tenants.

Judge Nahra ruled that IJP and the Burches could no longer have any contact with tenants or prospective tenants, and could no longer manage IJP's nine rental properties. Nahra ordered the $50,000 civil penalty for engaging in a pattern or practice of discrimination, and ordered that each of the two women who brought the suit should receive $35,000 in compensatory and punitive damages. (The other women who testified but did not file lawsuits did not receive any damages under the ruling.)

Nahra said in his ruling: "The defendants' conduct of preying upon poor and desperate women with few housing options, of holding the prospect of homelessness over their heads as John Burche seeks to coerce sexual favors from them, of . . . withdrawing perks or benefits as they held out against his sexual demands, surely ranks at the highest level of reprehensible conduct."

Nahra said that various actions by John Burche constituted a pattern of harassment in terms of housing discrimination, including promising rent reduction in exchange for sex; promising gifts in exchange for private meetings, lunches or sex; entering properties without notice; and using utility bills to coerce conduct on the part of tenants. "This court finds John Burche has physically assaulted some of his tenants by placing his hands upon them, kissing them and, in once instance, forcing sexual intercourse," Nahra said in his order.

In August 2004, Burche was ordered to spend 30 days in jail for violating the court order, following a two-day contempt of court hearing. John Burche and Maura Burche were held in contempt of court for failing to hire an independent management firm for their 9 rental properties in Davenport, as the judge had ordered in January. Maura Burche received a ten-day jail term with the ten-day sentence suspended.

In September 2004, the Burches sought a Chapter 11 (reorganization) bankruptcy for their business, IJP, Inc. The U.S. bankruptcy Trustee named in the matter sought conversion of the case to a Chapter 7 bankruptcy (liquidation) in part on the basis that the case was filed in an attempt to avoid the civil rights judgment and injunction and payment orders issued by Judge Nahra in January 2004.

Last week, on June 7, U.S. Bankruptcy Court Judge Lee Jackwig approved the distribution of all of IJP Inc.'s remaining assets of $310,000. The distribution will provide $35,000 each to the two original women complainants, $35,000 each to two other women, and $25,000 each to the other six women who were aggrieved by the practices and who testified in the original trial. The Bankruptcy order also included payments of $10,000 each to the State and the Davenport Civil Rights Commission, which had handled another matter related to discrimination complaints against the Burches and IJP, Inc.

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