A dispute between two former Bend laundry business owners is playing out in U.S. Bankruptcy Court, with one side accusing the other of setting up a fake business entity to hide more than $70,000 owed to the plaintiff.

But the defendant in the case, Mackey Carlson, has fired back, calling plaintiff Stephen Sylvester a liar and opportunist who is just trying to take Carlson’s money. The plaintiff is identified in court records as Deschutes Enterprises Inc., which state business records show is owned by Sylvester.

Sylvester filed the suit against Carlson May 9 in a Portland bankruptcy court.

The case centers around Sylvester’s former Bend business, Dry Cleaning Station, which he sold to Carlson and his wife, Twila, around 2009.

The Carlsons changed the company’s name to A Greener Cleaner and operated four franchises around Central Oregon.

In 2012, Sylvester won a civil suit against them for $69,000, claiming the Carlsons still owed him for costs related to buying the business.

The Carlsons have said they’re unable to pay. They divorced last year, Mackey Carlson said when reached for comment this week, and Twila sold A Greener Cleaner’s assets to another laundry business soon after.

Mackey Carlson filed for Chapter 7 bankruptcy protection in January. But in the suit filed this month, Sylvester’s attorney claims the Carlsons “engaged in fraudulent transfers and concealment of assets with the intent to hinder or delay” funds from being collected. Sylvester alleges the Carlsons created a separate business entity called Central Oregon Cleaning, LLC, and transferred all of A Greener Cleaner’s assets there without disclosing the LLC’s existence.

Mackey Carlson denies all those claims. He says he and Sylvester had an agreement for the Carlsons to run four laundry businesses, but Sylvester owned the buildings and shut down two of the businesses shortly after the sale, costing the Carlsons thousands of dollars.

“The company was insolvent,” Carlson said. Sylvester “is just trying to go after our money. … The lawsuit is in essence frivolous.”

Sylvester’s attorney didn’t return a message seeking comment this week.

The Carlsons were issued court summons this week, documents show.

A pretrial conference is set for June 24.

— Reporter: 541-617-7820, eglucklich@bendbulletin.com