Two years ago I sold and financed a retail/service business for a person. The financing was secured by a UCC on the machinery, as there are no other assets besides customer owned inventory.
He paid me three payments on a five year note and stopped. This prompted a legal wrangle for 18 months. The day before a scheduled civil court trial, he filed chapter 11.
I received notice of a creditors hearing and a subsequent extension. Checking the date of the hearing on Pacer I noticed that there was a joint chapter 11 filed, under a different corporate name for my debtor.
There was income for the corp that I have the UCC with in 2009. In 2010, that corp shows no income, but the new corp now has income and the same employees.
They had a Pre-Petition for Wages for the new corp Monday. I made an appearance and spoke with the judge about the my security with the first corp and how it looks like the second corp is now trying to edge me out of my position. The judge ordered that the two corps are now considered one and since I am the only secured creditor, I go to the top of the list. He realized what the debtor was trying to do and chastised him.
I spoke with the US Trustee after the hearing and told her I had a depo from the debtor where he states, many times, he does not post any of the cash (which is approx.1/3) sales, removed machinery (his corp bought)6 weeks before he filed and other fraudulent activities. She advised me to write a letter to the Trustee detailing everything with backup. I am sending the info to her tomorrow. I have no doubt that there will be charges of fraud filed by the Trustee.
My business litigation attorney does not handle bankruptcies. I have called attorneys and the expense to handle this is to exorbitant. My cash has been drained by this 2 year battle and now when I can see the light of getting this business back, I cannot afford it.
I need some direction!
Thank you
He paid me three payments on a five year note and stopped. This prompted a legal wrangle for 18 months. The day before a scheduled civil court trial, he filed chapter 11.
I received notice of a creditors hearing and a subsequent extension. Checking the date of the hearing on Pacer I noticed that there was a joint chapter 11 filed, under a different corporate name for my debtor.
There was income for the corp that I have the UCC with in 2009. In 2010, that corp shows no income, but the new corp now has income and the same employees.
They had a Pre-Petition for Wages for the new corp Monday. I made an appearance and spoke with the judge about the my security with the first corp and how it looks like the second corp is now trying to edge me out of my position. The judge ordered that the two corps are now considered one and since I am the only secured creditor, I go to the top of the list. He realized what the debtor was trying to do and chastised him.
I spoke with the US Trustee after the hearing and told her I had a depo from the debtor where he states, many times, he does not post any of the cash (which is approx.1/3) sales, removed machinery (his corp bought)6 weeks before he filed and other fraudulent activities. She advised me to write a letter to the Trustee detailing everything with backup. I am sending the info to her tomorrow. I have no doubt that there will be charges of fraud filed by the Trustee.
My business litigation attorney does not handle bankruptcies. I have called attorneys and the expense to handle this is to exorbitant. My cash has been drained by this 2 year battle and now when I can see the light of getting this business back, I cannot afford it.
I need some direction!
Thank you
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