While an Erie couple's business is trying to get out of bankruptcy, they have filed a personal bankruptcy as well, as reported the by Erie Times-News.
A.D.C, and his wife, J.M.C, owners of Telatron Marketing Group Inc., filed for Chapter 11 protection in U.S. Bankruptcy Court in Erie on May 18.
In both bankruptcies the couple owes the most money to the Internal Revenue Service. The bankruptcy was filed just before the IRS was scheduled to hold an auction of the couple's jointly owned properties that make up Creditron Financial Corporation.
Creditron Financial Corporation does business as Telatron.
According to court documents, the IRS had seized the buildings owned by the couple due to the nonpayment of taxes. The sudden personal bankruptcy filing stayed the IRS auction - and unless a judge rules against the couple, they will remain in control of the buildings.
One building in the auction was allegedly used to intimidate debtors - it was a false courtroom - and used by the Unicredit America collection agency.
Unicredit and Creditron are separate business entities, though a family member runs the former, and the state Attorney General's Office is currently suing it on civil penalties.
Telatron, employing over 400 people, is still in business.
Thomas P. Agresti, the Chief U.S. Bankruptcy Judge, has appointed a trustee to present a reorganization plan to him by June 15. Agresti is also assigned to the new personal bankruptcy case.
The Creditron filing was made in July 2008.
Guy Fustine, the couple's lawyer, stated, "We intend to cooperate with the trustee for Creditron so both the business and real estate can be marketed together or on parallel tracks."
The plans include the sale of Creditron and leasing buildings to the new owner. Fustine wants to use both the business sale and building's lease so "we can maximize the value of the assets for the benefit of the creditors and the debtor."
A.D.C. is listed as Creditron's chief executive and J.M.C. is listed as the company president.
Total debts are listed at $918,442. $851,305 of this total is for unpaid taxes and is as follows: $25,700 to the state Department of Revenue and $825,605 to the IRS.
The remaining $61,386 in for unpaid credit card bills.
Assets are listed at $1 million.
In Creditron's filing, debts were listed as $4.8 million and assets at $3 million. A Bankruptcy Court report showed that the IRS was owed $1.7 million for withholding taxes.
In December, a court-appointed financial examiner told Agresti that Creditron had failed to remit employee withholding taxes to all three governments: local, state and federal - instead, the money was spent to keep their business operating.
Section 6672 of the IRS Code allows the agency to penalize anyone "who is required to collect, administer and pay over the tax and who willfully fails to do so." Employees, whose taxes were not withheld, are not subject to penalties.
If you are feeling pressured by overwhelming debtors, and are struggling to remain solvent, contact a bankruptcy attorney for help.