Officials from 24 states want coin dealer Lear Capital Inc.’s chapter 11 case thrown out, alleging the business filed for bankruptcy to evade government investigations into its business practices, not for a legitimate purpose, WSJ Pro Bankruptcy reported. Attorneys general and financial regulators said in court papers Monday that Lear Capital’s bankruptcy case wasn’t tied to any financial distress but was filed “solely to gain a tactical advantage” in pending investigations of the company. Lear, which sells gold and silver coins at a markup to individual investors over the phone, filed for chapter 11 last month to resolve legal claims that might be asserted against it after it resolved probes into its business practices by the Los Angeles City Attorney’s Office and New York Attorney General. The company paid a combined $8.73 million to Los Angeles and New York last year without admitting wrongdoing to settle lawsuits alleging it misled its customers and charged hidden fees. But there are dozens more state investigations of Lear and its management pending around the country, according to Monday’s court filing. State officials said the bankruptcy had more to do with Lear’s desire to bring those probes to a head in its chosen forum than with any real financial distress.
