Spartan International, 01-10254: Involuntary Bankruptcy. Considered one of the most complicated bankruptcy cases in South Carolina history. Spartan had 12 plants throughout the southeast. A conflict between management and the major secured creditor led to a lockdown of the plants with 1200+ employees not paid for two weeks. The case stayed as a receivership in Federal District Court for months, despite the filing of a Bankruptcy petition. Finally the Appellate Court ruled the bankruptcy filing ended the receivership. We hired almost 100 of the employees as independent contractors for a few weeks to assist in an orderly liquidation. We then kept a core of approximately 20 former employees for almost three years to assist in preference litigation and the collection of accounts receivable. All of the 12 plants and their equipment were sold. We were successful in lawsuits filed against the attorneys and accountants hired by the debtor for malpractice. We were also successful in a recovery against management. The case had issues involving employment law, prescriptive easements, environmental law, intellectual property, negotiable instruments and warranties. We collected $34, 042,340.55 and were able to get the employees paid. The case was closed 2/27/2014.
Vytech Industries, Incorporated, 07-00753: Voluntary Bankruptcy: Vytech was in the business of producing interior panels for the Recreational Vehicle and Mobile Home Industries. Because of the specialized nature of the goods, we had to find a targeted buyer to maximize the return. We were able to sell inventory for almost the book value. The building was sold after clearing a title issue involving a railroad spur right of way. The distribution was for $5,330,247.
Glo-Tex International, Inc., 07-06449: Involuntary Bankruptcy: Debtor was engaged in the chemical industry. A few years prior to the bankruptcy there was a major explosion causing extensive damage to the manufacturing facility. During the initial inspection, we found many hazardous substances, including extremely dangerous organic peroxide. This organic peroxide was not being stored properly, therefore, we had it removed by a chemical contractor and disposed of properly by a licensed contractor within 24 hours. DHEC praised us for the swift reaction to the threat of another explosion. There were other hazardous chemicals on sight and we maintained armed guards on the premises until all the chemicals were removed. We eventually liquidated the plant and sold it for $2,636,147.24.
International Payment Group, Inc. 08-03453: IPG was engaged in the business of converting currency for international transactions. An employee was caught embezzling over $300,000. The bank then discovered one of their employees was also involved. The bank shut down all accounts and because of the specialized nature of the business, the debtor went out of business. We filed a lawsuit against the bank and hired counsel from South Carolina, New Jersey and New York. From expert evaluations, we were damaged in the amount over $40,000,000.00. The case remained in litigation for 10 years and finally ended at the 4th Circuit Court of Appeals with an adverse ruling to the bankruptcy estate. The case was interesting because of all the complex litigation. There will still be a small, negligible distribution to creditors, which is a better result than insolvency.
First National Bancshares, Inc. 10-09281: This is the holding company for First National Bank in Spartanburg. The voluntary petition was filed after the FDIC took over the First National. The main asset was a tax refund owed to either the bank or the holding company. The adversary party was the FDIC. This dispute was occurring in several similar cases around the country. When we discovered many jurisdictions ruling for the FDIC, we settled the case and made a distribution.
Precision Lift, Inc. 11-05730: Voluntary Petition. The debtor designed helicopter rescue lifts, primarily for the United States government. Prior to filing, the debtor was involved in a lawsuit involving the design of the lift. (intellectual property). We were able to resolve the lawsuit and make a distribution to creditors.
NMFC, LLC, 11-06800: Voluntary Petition. Debtor owned technology involving a new competitor to aramid fibers. This new fiber proposed to be lighter and stronger and would be used for airplanes, boats, tires, bullet proof vests, etc. The litigation involved the officers and other entities claiming they had bought the intellectual property rights. After extensive discovery and several mediations, we recovered $410,333.56
Funderburk: 12-04785: Involuntary Petition: Debtor hired an estate planning Attorney in Charleston who had a history of issues with the Internal Revenue Service. To conceal assets, the Attorney set up a series of trusts and LLC’s for the debtor. We hired special counsel with expertise in estates and were able to “undo” all the transfers to the trusts. We then successfully liquidated the property and distributed $605,207.31 to creditors.
JHTC, Inc., 12-05050: Voluntary Bankruptcy: JHTC was in the tube business, primarily producing tubes for high pressure boilers. By contract the debtor owned the designs even if produced by the customer. We were able to sell inventory, equipment, and designs for $751,364.70.
Genesis Press, Inc., 13-01376: Voluntary Petition: Genesis was a printing business that moved to Greenville, SC from south Florida. In Florida, the business was destroyed by fire and the business received a large insurance payment. A lot of money from the settlement went to the officers/shareholders and not creditors. The company became insolvent in 2013. A portion of the printed material was sold to customers while the rest was destroyed because of intellectual property concerns. The equipment was sold and the employees paid during an interim distribution to creditors. We then pursued the officers and were partially successful in having some of the money returned to Genesis from the money the officers were paid from the fire recovery.
Stacy’s, Inc., 13-03600: This case was originally filed as a Chapter 11, then converted to Chapter 7 in June of 2014. The company sold vegetable and ornamental plants to Lowes, Home Depot and Walmart in the Southeast. During the Chapter 11case, the business was sold to Metro Lina. The Chapter 11 was not handled correctly by management, the attorney and the accountant. This was a cash basis tax payer and during the operation of the Chapter 11, a tax debt of almost $1,000,000.00 was incurred. It is rare to see a large corporation operated as a cash basis tax payer. I found a solution by making interim payments to creditors. Since the debtor was on a cash basis, the payments created a tax deduction. By making yearly distributions I was able to make the case virtually solvent. We also pursued many preferences and fraudulent transfers. The total recovery and distribution was $2,313,658.09
JAT, Inc., 13.07552: Voluntary Petition: JAT did pavement striping in the Carolinas. The initial problems involved lien perfection/priority and the location of much of the equipment. Many of the vehicles had equipment attached that was secured by an equipment loan. The vehicle was also under lien. We finally reached a compromise with the creditors and we were able to liquidate the equipment and recover preference payments from some of the creditors.
1801 Rutherford Road Associates, LLC 13-07609 and Greenville Properties, LLC 13-07608: Voluntary Petitions: These are companion cases. The property was the site of the former Steel Heddle plant in Greenville, SC. The 1801 case involved the manufacturing plant while Greenville Properties had real property that was rather heavily contaminated. After meeting with the bank and DHEC, it was determined we would sell both properties as one. This lowered the value of 1801 but resulted in an owner being in place that was responsible for continuing to monitor the Greenville property and take remedial steps as needed. This result was in the best interest of the community/environment even though it lowered the distribution and my compensation. The properties were sold at a price accepted by the Court and the bank (the only creditor).
Stretch Associates, Inc., 14-05540: Involuntary Petition: Stretch wrapped pallets with plastic for shipping. When we visited the plant there was nothing in it. The equipment was gone and only records over 2 years old were in the plant. We finally got the records from the CEO, but later discovered he had omitted one of the accounts. We subpoenaed the records from the bank and were able to recover preferences and fraudulent transfers totaling $350,417.74
Consolidated Services, Inc., 14-06751: Voluntary Petition: Debtor operated a golf course in York, SC. In contacting other golf courses in the area, it became evident that the bankrupt property needed to be converted to another use. We found a developer who purchased the land for “mini farms”.
Phoenix Mechanical, LLC, 16-02016: Voluntary Petition: Phoenix was a machine shop that primarily made parts for General Electric. After initial visits to the plant, it was determined the owner had started another company on the premises that also made parts for General Electric. After examining the books, it was apparent the funds for the second company came from Phoenix Mechanical, the debtor. We consolidated all the assets into the liquidation and made a substantial distribution to the taxing authorities. Sorting through the competing tax liens in this case was difficult.
Nemato Corp LP, 17-04976: Voluntary Petition: Nemato produced filters for commercial swimming pools. The plant was rather low tech, consisting of fiberglass equipment and molds. We found a buyer for $300,000, but at the Court hearing approving the sale, an overbid was placed for over $900,000.00. We distributed $949,057.38 to creditors, within 9 months of the bankruptcy filing which is an incredibly fast closing. Interestingly, the purchaser never picked up the fiberglass equipment from the plant.