Foss Creditors Return To Court
By Patrick Cronin
Hampton Union, Friday, August 18, 2006
[The following article is courtesy of the Hampton Union and Seacoast Online.]
HAMPTON -- Creditors of the bankrupt Foss Manufacturing are asking a federal bankruptcy judge to place an additional $3.4 million attachment on all assets owned by Stephen Foss, the company's former CEO.
The Official Committee of Unsecured Creditors filed the request in bankruptcy court this week asking for the attachment to be on all real estate and bank accounts in New Hampshire in which Foss has an interest.
Bankruptcy Judge Michael Deasy has already placed a $3.7 million attachment on Foss' home in Rye, citing that it is likely creditors can prove their case against Foss, which claims he looted the company for personal gain even though it was near bankruptcy.
Creditors filed suit against Foss and other former company officials in June stating those officials used company money on illegal dividends, excessive compensation and improvements on the family's homes while the company was going broke.
Creditors are trying to collect some of the $15 million owed to them. While a bankruptcy trustee sold the Hampton-based company for $39 million, the money was only used to pay off secured creditors, leaving unsecured creditors unpaid.
Creditors made the recent request because while the judge already placed the $3.7 million attachment on Foss's home at 45 Fairways Drive in Rye, it is only assessed at $2.7 million, according to court documents. Creditors also said the house still has $1.9 million left on the mortgage.
Creditors asked for the attachments because they said they were afraid that if the couple liquidates and transfers assets to undisclosed locations it may cause "irreparable harm" to their legal efforts.
A hearing on the matter has been scheduled for Sept. 5 at 2:30 p.m. in federal bankruptcy court.