Korn Drummer, David Silveria, and his Chapter 11 Bankruptcy

When I heard the news that the drummer of my favorite band from when I was growing up had filed bankruptcy, I decided to comb through his case to see what I could learn about his situation…

Chapters 7, 11, and 13 Analysis

Since Korn was one of the best selling musicians of around the turn of the millennium, it came as no surprise to me that he had filed a Chapter 11 since that chapter is usually reserved for wealthy individuals. Silveria was the drummer on the band’s first seven albums, most of which were huge hits, they were one of the most significant influences to early-2000s metal and are credited as being one of the creators of the “nu metal” genre. He left the band after those albums, which is probably why Korn’s entire discography that followed was pure garbage. But the royalties from those first seven albums must be massive… Right? Nope, not at all. In fact, his royalty checks were less than $10,000 per month. It is even possible that he could have passed the Means Test and qualified for Chapter 7.
So his decision to file Chapter 11 starts of with a consideration of Chapter 13. On this point, he was barred from Chapter 13 since he was over the “Debt Limits” due to his two mortgages, several tax liens, and two judgment liens all totaling around $2.5 million. Despite these massive secured debts, his home (which I found on Google Street View) was actually just a quaint little house in the Huntington Beach suburbs.
Second, the decision to file Chapter 11 instead of Chapter 7 was most likely due to the fact that in his bankruptcy petition he listed a pending lawsuit against Jon Davis, the front man singer and bagpipe player, for breach of contract in failing to pay the proper amount of royalties. Had he filed a Chapter 7, the trustee assigned to his case would have the ability to “take” that cause of action away and pursue the claim against Davis and take the full amount of any judgment or (more likely) settlement, less any amount that was available under California’s approximately $30,000 “wildcard exemption”. However, in a Chapter 11, you are not absolutely required to liquidate any property and you are not automatically assigned a trustee, but rather you will serve as your own trustee unless you are removed and one is appointed by the US Trustee’s Office.
Although a Chapter 11 debtor is permitted to act as their own trustee, they are still bound by the same rules and duties that the other trustees are bound to. This means that they are required to ensure compliance with the bankruptcy code, disburse payments to creditors, and a wide range of other duties.

Chapter 11 Quarterly Reports

Probably the most arduous and invasive requirement for an individual Chapter 11 debtor is the requirement of submitting quarterly reports. One aspect of these reports is that the debtor is required to account for every dollar of income and how that dollar was spent. In Silveria’s quarterly accounts that were filed with the Court, you can see where he buys groceries, where he goes to the gym, where he and his wife ate for their usual Friday dinner-and-a-movie date night, on August 18 he bought watch batteries for $5, etc, etc, ad nauseum. Although Chapters 7 and 13 bankruptcies also require some disclosure of personal information, it is relatively insignificant in comparison to the disclosure requirements of a Chapter 11.

Dismissal and Beyond

Silveria’s case was filed in March of 2015 and it was dismissed by late November of 2015. The reasons given for dismissal were failure to pay US Trustee’s fees and failure to prosecute. A search through the national bankruptcy case database shows that he has not since re-filed bankruptcy. Presumably, he is still in massive amounts of debt with no clear or viable bankruptcy options. Unlike rapper Lil’ Kim who also was also forced into a Chapter 11 situation, his musical career has not rebounded. He continues to play drums and has been in a few lesser known bands (Infinika, Core10, and BIAS). Eventually, he was able to settle the lawsuit against his former band mates for a lump sum payment of past due royalties and presumably for an increased amount of future royalties.