The office of the U.S. Bankruptcy Trustee is asking a judge to either dismiss the chapter 11 petition from Aletheia Research and Management either to reorganize its finances or appoint a trustee to manage the firm, or convert the proceeding into a chapter 7 liquidation, according to Pensions & Investments yesterday. A hearing on the petition, which could determine the fate of the money management firm, is scheduled on Jan. 15 before U.S. Bankruptcy Court Judge Barry Russell in Los Angeles. On Dec. 14, the SEC filed civil fraud charges accusing Peter J. Eichler Jr., the firm's chairman, CEO and chief investment officer, of making about a $2 million profit since 2009 by allocating a disproportionately large share of money-making trades to his personal brokerage accounts and another $2 million to favored employees and clients. In the bankruptcy trustee's petition, staff attorney Ron Maroko claims that Aletheia's board of trustees had no status to file for bankruptcy on Nov. 9 because its license to operate as a California corporation had been suspended by the Secretary of State office because the firm failed to pay more than $2 million in back taxes. Aletheia's assets under management have continued to decline under chapter 11, so a chapter 11 trustee should be appointed "before there is no remaining business to sell or case to administer," said Maroko.
