Jeff and Esther Smith, of Veradale, Wash., who own or have owned interests in a number of companies and properties here, including a company through which they owned a Learjet that was targeted for repossession, are moving toward liquidation in U.S. Bankruptcy Court.

The couple filed their Chapter 7 petition on April 5, listing total assets of $1.3 million and liabilities of $5.8 million, the bulk of which were unsecured, and said they had no personal income. Since then, after a creditors' meeting and a flurry of court filings, trustee Dan O'Rourke has issued a report saying there are no assets to distribute and asking to be discharged from the case. Meanwhile, creditors have until July 6 to object to a discharge of the couple's remaining nonexempt debts.

Some of the still-lingering legal wrangling has involved the Smiths efforts to void a bank's judgment lien against their $550,000 home in Bella Vista Estates, which they claimed in their petition to be exempt from the bankruptcy proceedings.

Bruce Boyden, the Smiths' bankruptcy attorney, says he expects the dispute over that home to be resolved shortly. Boyden says the couple's bankruptcy filing appeared to have been caused at least in part by some sizable real estate investments that began to create a heavier financial burden as the economy weakened.

Among the couple's listed creditors are a number of financial institutions, including Wells Fargo Bank, the Bank of Fairfield, State Bank Northwest, Inland Northwest Bank, AmericanWest Bank, and Spokane Teachers Credit Union.

The Bank of Fairfield is their largest creditor, with total secured and unsecured claims of about $2.2 million. The largest share of that amount, about $1.6 million, is for a loan on a building downtown at 115 S. Jefferson that's in default, the filing said. It said also that the couple planned to surrender to the Bank of Fairfield a building they own at 28 W. Third that has a current value of about $700,000.

The Bank of Fairfield has been pursuing a separate action in Spokane County Superior Court, seeking money from the Smiths and one of their companies, EBJ Aviation LLC, through which they owned the Learjet 24, a high-speed business plane. The bank won a nearly $150,000 judgment in that case some months ago, but it wasn't clear from documents whether it has repossessed the jet yet.

State Bank Northwest is the second largest listed creditor, with claims totaling $1.1 million for what the filing describes as foreclosed business debts at 1614 W. Riverside and 1720 W. Riverside.

AmericanWest Bank and Inland Northwest Bank were listed as creditors for yet other properties, at 108 W. Third and 1418 W. Sixth, respectively.

Also, U.S. Bank has been pursuing a separate civil action in Superior Court seeking money from the Smiths and another company they owned, DXDY Voice Processing Inc., according to the bankruptcy petition, which said that company now is out of business and has no assets.

Other companies that the petition said the couple own, owned, or in which they've had ownership interests include Rhino Equipment Corp., DXDY LLC, Notu Inc., EBJ Holdings LLC, EBJ Properties LLC, JE Holdings LLC, Overlook Spokane LLC, QTurbo LLC, ZRE LLC, Shester Communications Inc., The Zone Inc., and Windows on Jefferson LLC.

Of the 14 companies listed in all, one of which never conducted business, seven now are defunct and the rest either have debts that exceed their assets and aren't profitable or are in the midst of foreclosure proceedings, the filing said.

Jeff Smith told the Journal 10 years ago that he founded DXDY Voice Processing and Rhino Equipment in Phoenix, and moved both companies here in 1998. Rhino Equipment, which still is operating and lists a Tempe, Ariz., address on its Web site, makes telecommunication systems and equipment.