Judge backs Foss attachments
A federal bankruptcy judge ruled Wednesday that creditors of the bankrupt shell of Foss Manufacturing should be able to attach the financial accounts of Stephen Foss, the former chief executive officer.
Now the question remains whether there is any money in the three New Hampshire accounts – two bank accounts and one mutual fund — and whether they are exempt from such an attachment.
The ruling is the latest battle in a legal war against Foss, who, unsecured creditors claim, looted the Hampton firm while it was going broke. A bankruptcy trustee sold Foss Manufacturing as a going concern to some private investors to pay off secured creditors, but left virtually nothing in the bankrupt shell – renamed Felt Manufacturing – for unsecured creditors, who claim they are owed $16 million.
“This is about serious issues, serious amounts of money, and nobody is going to go quietly,” said U.S. Bankruptcy Court Judge J. Michel Deasy at a Sept. 5 hearing on the attachment.
Deasy had already ordered an attachment on Foss’s former Rye residence for more than $3.2 million, ruling that creditors are likely to succeed in their quest for at least that much. But creditors argued that Foss’s share of the home was not worth more than $717,000 and that they had to look elsewhere in New Hampshire, where the court had jurisdiction.
The creditors were given until Sept. 15 to attach the accounts. – BOB SANDERS