By Patrick Cronin
Hampton Union, Tuesday, August 29, 2006
[The following article is courtesy of the Hampton Union and Seacoast Online.]
HAMPTON -- A suit filed by creditors of the bankrupt Foss Manufacturing against former Chief Executive Officer Stephen Foss and others, alleging they used company money for personal use, could be over before it starts.
Foss and other defendants filed separate motions last week to dismiss the case. A hearing in front of bankruptcy Judge Michael Deasy is scheduled for Oct. 6.
Creditors filed the suit in June, stating Foss and other officials used company money on illegal dividends, excessive compensation and improvements on the family's homes while the company was going broke.
The suit seeks funds not repaid as part of bankruptcy proceedings. In all, more than $50 million in claims were made against Foss Manufacturing, but the company was sold for less than $35 million.
Others named in the suit who filed motions to dismiss include former Chief Financial Officer Kevin Sexton and former board of directors, including Foss' wife, Patricia, daughter Jenifer Smyth, brother Dennis Foss and David Rowell. The Foss Family LLC, Foss Reality Inc., Business Helicopter Inc., and Custom Travel of New Hampshire were also named in the suit.
Meanwhile, creditors of the bankrupt Foss Manufacturing will return to court Sept. 5, asking a federal bankruptcy judge to place an additional $3.4 million attachment on all assets owned by Foss.
Deasy has already placed a $3.7 million attachment on Foss's home in Rye in case creditors can prove their case against him.
Creditors made the recent request because, while the judge already placed the $3.7 million attachment on Foss's home at 45 Fairways Drive in Rye, it is only assessed at $2.7 million, according to court documents.
Creditors also said the house still has $1.9 million left on its mortgage.
Creditors asked for the attachments because, they said, they were afraid that if the couple liquidates and transfers assets to undisclosed locations, it may cause "irreparable harm" to their legal efforts.