Industrialist's son files for bankruptcy

Ronald Ashley McMaster

Bankruptcy court is the last place people would have expected to find Ronald Ashley McMaster.

An heir to a modern Toledo industrial fortune, his family's name hangs on the side of a building at the University of Toledo.

He and his wife, Carolyn, own a house in Perrysburg's tony Hamlet, a $1 million place in the Lake Erie resort community of Catawba Island, and interest in a condominium on Sanibel Island, Fla.

But yesterday, the president of Toledo's McMaster Motor Co. filed for protection from creditors in U.S. Bankruptcy Court in Toledo.

His Chapter 7 petition listed $23 million in debts and $1 million in assets.

Mr. McMaster, son of the late inventor and industrialist Harold McMaster, blames his financial problems on the failure of Continental Capital Corp., Sylvania, and alleged wrongdoing involving founder and former president, William C. Davis.

Mr. Davis couldn't be reached for comment. His attorney, Peter Kelley, didn't respond to a message left at his Ann Arbor office.

Mr. McMaster lost $2 million invested with Continental Capital and, as a one-time member of its board of directors, has been sued for more than $20 million by its clients and creditors, the bankruptcy filing stated.

Mr. McMaster referred questions to lawyer Thomas Schank, who didn't return a phone call.

But in a letter to friends explaining the bankruptcy filing, Mr. McMaster wrote: "I am truly sorry that I did not understand what was happening in time to salvage the situation."

In the letter obtained by The Blade from his spokesman, he said: "If any good comes of this situation, hopefully it will be that people who read this letter understand what has happened to me and take a more active and critical role in the management of their financial affairs."

Mr. McMaster, who is vice chairman of the board of trustees at Owens Community College, wrote that he wanted friends to know "how and why this happened, and I want you to get the information directly from me."

Mr. McMaster said he has lost his life savings just as he was approaching his golden years, and largely blamed Mr. Davis.

The U.S. Securities and Exchange Commission, in a civil complaint July 9, accused Mr. Davis of investing clients money without their permission, steering client funds into firms in which he was involved as an owner or in some other capacity, and diverting clients funds for his own use.

Mr. Davis is also the subject of a federal criminal probe.

Continental Capital clients have filed $20 million in claims with the Securities Investor Protection Corp., a government agency that is overseeing the firm's liquidation under bankruptcy court supervision.

Mr. Davis, a former trustee of the Medical College of Ohio, has denied any wrongdoing.

Among investors with whom he was involved were leading Toledo physicians and business executives including Paul Ormond, chairman of Toledo's Manor Care, Inc.

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.