Business Bankruptcy

“There are two times in a man’s life when he should not speculate: when he can’t afford it and when he can.” -Mark Twain

This quip from Mark Twain, the pen name of author Samuel L. Clemens, was actually a hard-earned lesson. Although Twain married into a wealthy family, and was one of the most successful writers and lecturers of all time, he made such poor business decisions that he was forced to declare

You either love them or hate them, but there is no debating the fact that Necco wafers and their Valentine’s Day incarnation — SweetHearts conversation hearts — are iconic. The wafers have been around since the Civil War, and flirting by exchanging the hearts is an Elementary School rite of passage. Both candies are hard to come by these days because the company that manufactured them, the New England Confectionery Company, filed for bankruptcy and liquidated its assets last year. 

Spangler Candy Co. and Necco Wafers

Is it possible that criminal charges will result from information obtained in bankruptcy proceedings?

In 2010, Adams Produce, a large family-owned company with a long history in Birmingham, was sold to a group of investors. Just two years later, in 2012, the company filed for bankruptcy and closed.  Four hundred employees were left without jobs and the company owed the employees almost three weeks back pay.  The company also owed almost $16 million to vendors, creditors, and produce suppliers.  The company blamed decreasing margins and lawsuits from rival companies in the bankruptcy filing.  Once the company filed, the United States government cancelled a recently signed, four and a half year contract for produce worth $41 million.    

Prior to the sale and bankruptcy, the family-owned business brought in outside managers to lead the business.  The family eventually sold ownership stakes to the outside CEO, CFO, COO, and an investment firm, CIC Partners.  The bankruptcy and closing impacted the original family, specifically Carl Adams III who claimed that he lost $5 million and suffered emotional and physical damage as a result of the company’s failure.  Adams was forced to return to the workforce and forgo retirement while watching his family business shut down.  Adams blamed the company’s former CEO and CFO, for most of the problems associated with the closing and bankruptcy.  

Former CFO John Stephen Alexander had insight into the company’s finances and did not inform CIC of the issues that Adams Produce faced. Adams claimed the CFO had a duty to report the fraud in the government contract and was guilty of duping people into buying into a failing company along with the CEO. Alexander was sentenced on separate fraud charges and served a prison sentence related to those charges.

If you believe that you have done something illegal and are now considering filing for bankruptcy, you should speak to an experienced attorney before making your next move.  The attorneys at Padgett and Robertson have extensive experience helping companies in the Mobile and Baldwin County areas navigate bankruptcy proceedings.  Contact us today at (251) 342-0264 for a free consultation.      

What is going on with Jefferson County’s Bankruptcy?

When Jefferson County filed for protection under Chapter 9 of the Bankruptcy Code in 2011, they hardly expected the legal challenges would continue as long as they have.  The county owned sewer system that contributed greatly to the county’s financial trouble is the subject of a lawsuit from several customers attempting to block Jefferson County’s exit from bankruptcy.  The county’s bankruptcy plan includes rate hikes for sewer customers each year for the next forty years.