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Company Ruled Negligent In Shredding
A federal bankruptcy judge has determined that American General Finance
was negligent in the destruction of documents that may have been
pertinent in the bankruptcy of a subsidiary company, according to the
Courier & Press. Friday’s ruling by Judge Basil
Lorch is the latest action in a federal investigation, ongoing since
the end of July, against the Evansville, Wyo.-based company.
Julie Greathouse, a company employee, came forward to allege that the
company’s former top legal adviser, Ron DiGiacomo, instructed her
to destroy documents which were thought to pertain to the pending
bankruptcy of a subsidiary, A.G. Financial Service Center Inc. Although
the investigation proved that Greathouse did destroy about 20 boxes of
documents, Lorch said her actions were the result of a 'classic and
tragic misunderstanding.' The judge has ordered that the remaining
documents in question be provided to a committee formed to represent the
interests of some 5,500 creditors involved in the bankruptcy. The
committee will then decide the relevance of the documents and report its
findings to the court.
If it is determined that American General Finance was liable in the
destruction of documents, the company could be held liable in a $167
million judgment ordered previously against the subsidiary. That
judgment forced the A.G. Financial Service Center to file for bankruptcy
in the U.S. District Court in New Albany, Ind. Prior to the bankruptcy
filing, American General Finance had agreed to pay $1 million to each of
27 creditors who made claims against the subsidiary after purchasing
satellite systems. Another $8 million has been paid to a separate group
of the original creditors.
DIMAC Prepares to Exit Chapter 11
DIMAC Corp. announced yesterday that it has filed its
disclosure statement and reorganization plan with the U.S. Bankruptcy
Court in Wilmington, Del., setting the stage for the company to formally
emerge from chapter 11, according to a newswire report. The St.
Louis-based DIMAC and its subsidiaries filed for chapter 11 on April 6
and hope to emerge from bankruptcy by the end of the year.
The reorganization plan provides for an additional line of credit to
be extended to the company by its lenders in the form of an 18-month
term loan, which will provide sufficient liquidity when the company
emerges from chapter 11. Upon confirmation, and after the sale of the
non-core businesses, DIMAC's total indebtedness will be reduced from
approximately $391 million to $107 million. Annual cash interest expense
will be lowered from over $39 million to approximately $9 million. DIMAC
Corp. provides a range of integrated and direct response marketing
solutions, which are supported by creative strategy/agency services,
database strategy/management services and production services and
products.
Graham-Field, Panel Agree To Plan Exclusivity
Extension
With the consent of its official unsecured creditors' committee,
Graham-Field Health Products Inc. has received a 75-day extension of the
exclusive periods during which other parties are prohibited from filing
competing Chapter 11 plans. U.S. Bankruptcy Judge Mary F. Walrath
extended the exclusive period during which only Graham-Field can file a
Chapter 11 plan through Nov. 6. If the Bay Shore, N.Y.-based health-care
product manufacturer files a plan by Nov. 6, other parties would be
further prohibited from filing a plan through Jan. 5, 2001, to allow the
company time to solicit plan votes.
href='http://www.fedfil.com/bankruptcy/developments.htm'>The Daily
Bankruptcy Review Copyright © October 5, 2000
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