The U.S. Bankruptcy Court approved Core Resource Management’s official committee of unsecured creditors’ renewed and expedited motion to appoint a Chapter 11 trustee.
As previously reported, “Committee files this Motion requesting the immediate appointment of a Chapter 11 Trustee based on the current financial condition of the Debtor, current management and counsel’s participation in and/or knowledge of fraudulent conduct; current management and counsel’s inability and/or refusal to comply with Bankruptcy reporting requirements and orders to produce documents; and counsel’s failure to disclose a material conflict of interest entailing his representation of the Debtor’s chief financial officer (‘CFO’) during the pendency of this case. Management must be removed immediately and replaced by a Chapter 11 Trustee who can perhaps salvage the tattered remains of this company in order to sell it and provide some (any) recovery to creditors. The situation has become so dire that the Committee believes it is necessary for the order appointing a trustee contain injunctive language re straining management from accessing bank accounts and computers.”
In addition, “A Chapter 11 Trustee can have access to critical information, review and analyze the issues, benefit from the research of the Committee and the advice of two expert financial advisors. The Committee believes it is well worth the effort to have a Chapter 11 Trustee in place to see if there is a recovery possible for the $3 million in debt probably created by and certainly worsened by insider wrong-doing and mis- or non- management.”
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