Foss creditors seek bank attachments
Creditors of the bankrupt shell of Foss Manufacturing asked a federal bankruptcy judge Monday to attach former CEO Stephen Foss’s New Hampshire bank accounts, arguing that his equity in his Rye home will not be enough to satisfy a judgment against him.
The filing notes that U.S. District Bankruptcy Court J. Michael Deasy’s ruled last month that creditors are likely to prove their case that Foss illegally paid out at least $3.7 million dividends, excessive compensation and improvements on the family’s homes while the company was going broke.
The bankruptcy trustee sold Foss Manufacturing to a group of investors, and the Dover firm is now thriving, leaving the bankrupt shell – renamed Felt Manufacturing – which has virtually nothing left to pay unsecured creditors, who claim that they are owed more than $16 million.
Deasy allowed the creditors to attach Foss’s former Rye residence which is now on the market with an asking price of $3.3 million. But creditors argue that after considering the mortgage and the real estate assessment, Foss’s share in the property is worth between $400,000 and $717,000. The home is also half owned by his wife and former board member Patricia Foss, but Deasy said she is likely to owe some $210,000.
In that ruling, Deasy noted that it was unlikely that the local federal district court would be able to attach assets outside of New Hampshire, and he ruled against a previous request for a blanket attachment of New Hampshire bank accounts. But in their Monday filing creditors named four specific accounts in three different financial institutions — Fleet Bank, Citizens Bank and Fidelity Investments. Stephen Foss has two weeks to raise any objection after being served. – BOB SANDERS