FRM filings fuel big jump in bankruptcies



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The Financial Resources Mortgage Inc. debacle swamped an already inundated New Hampshire bankruptcy court in February, resulting in the most filings of any month since 2005, when the law was changed to make it more difficult to declare bankruptcy.The 506 filings, more than were filed in any February – and a 35 percent increase over February 2009 -- was fueled by 88 trust filings related to Meredith-based FRM’s alleged Ponzi scheme, which authorities say used the trusts to pull investments to avoid securities law. In the week of Feb. 11-17, the bankruptcy court docket is filled with names like SMG 2006 Realty Trust and Blackbrook 2009 Realty Trust. All were brought under the wing of the bankruptcy court, as well as some individuals – including Susan G. Farah, wife of Scott David Farah, principal of FRM, and the Receivership Estate of Donald E. Dodge, head of CL&M, the company that allegedly originated many of the mortgages. Only three months since 1989 saw more bankruptcy filings -- the two months of last-minute rush filings before the bankruptcy law changed in 2005 and April 1998, when there were 517 filings.Even without the trust filings, some 416 bankruptcies were filed in February, proof that the recession is still very much with us.Among them were five business bankruptcies: • GHX Inc., (dba Ocean Garden Restaurant), Nashua, filed Feb. 5. Assets: $7,510. Liabilities: $127,696. • Luk & Sons LLC, Chichester, filed Feb. 16, Chapter 7. Assets and Liabilities: between $500,000 and $1 million • 31 South Main Street LLC , 401 Gilford Avenue LLC, Leavitt Road LLC, all Gilmanton, filed Feb. 24, Chapter 11. Assets and liabilities: Between $1 million and $10 million each. • New Frontier Industries, Milton, filed Feb. 26 , Chapter 7. Assets: 94 cents. Liabilities $ 10,502,801. • Trend Systems LLC, Hooksett, filed Feb. 26. Chapter 7. Assets: $326,120.74. Liabilities: $1,371,409.16. – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW Edit ModuleShow Tags