Foss calls budget idea ‘harassment’
In separate filings in federal Bankruptcy Court in Mancheter, Stephen Foss, former CEO of Foss Manufacturing in Hampton, calls an attempt by creditors to put him on a daily budget ‘pure harassment,’ and his wife Patricia says that the move would result in ‘tremendous hardship’ while she battled a potentially fatal disease.
The former CEO said that while he would not object to the court’s earlier order to freeze his personal assets, he wants to be able to spend those assets not just on living expenses, but on business and legal expenses as well.
Foss, who now lives in Florida, said he ‘never harbored any intent to conceal’ assets.
Creditors are seeking to recover from Foss, his family, family businesses and other former officials at the company some of the $15 millions they claim the company owed them before filing for Chapter 11 bankruptcy last September. The creditors claim that Stephen Foss looted the company while it was going broke, and other board members, including Patricia Foss, not only benefited from his actions, but looked the other way.
While a bankruptcy trustee sold the company to a group of investors for $39 million as a going concern – leaving behind a a bankrupt shell renamed Felt Manufacturing – the unsecured creditors were left holding the bag.
The creditors filed suit on June 12, and shortly thereafter obtained a temporary restraining order, charging that the recent sale and attempted sale of millions of dollars worth of property owned by the Fosses and the refusal of either one of them to disclose the proceeds indicated that they might be trying to whisk their assets beyond the creditor’s reach.
While Foss doesn’t challenge the creditors’ larger accusations in his short filing, his wife – who also denied any attempt to hide assets – did so in a lengthy filing earlier in the week.
In her affidavit, Patricia Foss says she was selling property because the couple no longer had income coming in. The assets, she said, are in a domestic financial institution and have not been put ‘offshore,’ but will be used for living, legal and medical expenses, particularly in her battle with ALS, or Lou Gehrig’s disease.
Patricia Foss argues that she shouldn’t be held liable in any case, because she was just a board member for less than six months when in August 2005 she learned from her husband of possible mismanagement at the company. She says her husband was always very ‘private and controlling’ and that she was when it came to the company, so she knew few of the details, and that she was ‘blindsided’ when her husband told her that the financial reports she had been receiving were not accurate.
“It would be a tremendous hardship and would affect my ability to treat my disease and try to prolong my life,’ she said in the affidavit. ‘It also is wholly unnecessary, for I have no reason to believe I am liable on account of anything I had done.’
In a separate legal filing, her lawyer adds that Patricia Foss ‘is a victim, and not a perpetrator, of any alleged wrongdoing.’
Meanwhile Felt Manufacturing found that it faces another claim to contend with. On June 27, the U.S. Environmental Protection Agency said claims that Foss Manufacturing disposed of some 10,000 gallons of hazardous substances at the Beede Waste Oil Superfund Site in Pelham and that it owes some $67,234 in cleanup costs. – BOB SANDERS