Category Archives: Bankruptcy

As Frontier Communications emerged from Chapter 11 bankruptcy on Friday, officials with the Norwalk-based telecommunication company made it clear they expect high-speed internet service delivered by fiber optic cable to deliver them from the financial wilderness.

The focus is on fiber, said John Stratton, the incoming executive chairman of the board for Frontier, which saw its executive team undergo a dramatic reorganization during the full year it was under Chapter 11 bankruptcy protection. The goal is to replace our existing copper network with fiber.

Stratton and other Frontier executives explained the companys strategy during a call with financial analysts reporting on its first quarter earnings. The company had earnings of $60 million in the three-month period that ended March 31 a dramatic reversal from the same period in 2020, when the company lost $186 million.

Frontier filed for Chapter 11 protection on April 14, 2020. Prior to the analyst call, it was announced that Frontier had signed a new lease for 48,000 square feet of office space for its headquarters staff in the Merritt 7 office complex in the northern end of Norwalk.

Since entering Chapter 11, Frontier executives had been cagey with state officials about whether the company would keep its headquarters in Connecticut. Even while making the announcement about its renewed lease in Norwalk, a company vice president, Jim Campbell, acknowledged that Frontier executives toured the market to find the best fit for our firm in the post-pandemic office world.

Merritt 7 stood above all the competition Campbell said.

Nick Jeffery, Frontiers new chief executive officer, said the company will aggressively target data products and fiber going forward.

Frontiers purpose will be to become a leader in building digital America, said Jeffrey, who led a turnaround of British telecommunications giant Vodafone before taking his current job. We have a lot of work to do, but I could not be more excited about the year ahead.

He said Frontier plans to:

Install new fiber in 495,000 locations across Connecticut and 24 other states over the next year.

Increase the penetration rate in the markets where the company provides fiber-based Internet service from its current level of 41 percent to at least 50 percent. (Penetration rate in this case refers percentage of customers in a given area that use Frontiers service compared to the total number of internet service customers.)

Phase out Internet products over time that make use of copper cable to deliver the service.

Company officials did not reveal any plans for an increased fiber optic roll-out that are specific to Connecticut, but said expanding that technology in the state was a priority, along with increased availability in California and Texas.

We have proven we can win market share where we have fiber, Jeffery said. A fiber-centric future for Frontier is feasible and financially attractive.

The opportunity for the company to grab market share by expanding its fiber optic network has great potential, he said, since fiber optic cable passes only 38 percent of all homes in the United States.

Using fiber optic cable to deliver broadband Internet service is preferable because it allows data to move at higher speeds, according to Lon Seidman, an Essex-based technology expert who reviews products on his YouTube channel, LON.TV.

Fiber, at the moment, delivers significantly faster upstream performance versus cable (Internet service) and is the better technology over long distances, Seidman said. And fiber is more reliable. That will be important for businesses and home workers if they can get enough reach (within the communities Frontier serves).

But if Frontiers fiber optic push is to be successful, he said, the company needs to do a better job marketing its availability.

Until recently, according Seidman, the company didnt have map showing where fiber optic service is available in Connecticut, even though it has been marketing its availability online for months.

But installing increased volumes of fiber optic cable is going to be an expensive proposition, he said. And because of the expensive involved, Seidman said it is likely that the first areas to get the new fiber optic cable installed will be more densely populated.

When viewed in the long term, Jeffrey said fiber optic cable is more cost effective than a copper network.

The fiber we are laying now will last for up to 50 years and will cost less to maintain, he said.

Jeff Kagan, an independent telecommunications analyst based in Atlanta, said regardless of the expense involved, Frontier has no choice but to forge ahead with its plan if the company wants to continue to exist.

The future is about the Internet: Every thing will be coming over the Internet, whether its delivered by wire line or wireless, Kagan said. This is the direction they (Frontier) have to move in. They have already waited too long to pull the trigger.

luther.turmelle@hearstmediact.com

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As it emerges from bankruptcy, Frontier Communications officials say the companys future is in fiber optics - New Haven Register

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Know the difference between a Chapter 7, 11 and 13 Bankruptcy with the VP of Lending for Team Hochberg at Homeside Financial - WGN Radio

Detroit's financial officials and members of the body elected to revise Detroit's charter are feuding over the city's allegations that proposed changes would be too costly and put Detroit on "the road to a second bankruptcy."

Mayor Mike Duggan's administration argues the changes to a legal document that is essentially Detroit's constitution would cost upward of $2 billion over four years and jeopardize the financial solvency the city has achieved.

The nine-member Charter Revision Commission, separate from the city's mayoral administration and created in 2018 via a public vote, was organized to propose amendments to the charter.

The three-year process may not be on all business communities' radars, but any changes ultimately passed by voters will greatly affect the employers and employees of Detroit.

The current version, aimed at increasing rights for residents, requires the city to offer free WiFi, bus rides and other services, and would also make police and fire departments independent of the mayor's administration.

Duggan officials on Monday presented their analysis of the proposed charter revisions to the Detroit Financial Review Commission, which until 2018 oversaw Detroit's finances. The commission could reactivate that emergency state intervention if Detroit sinks back into years of budget deficits an outcome officials argue will come to pass if the charter revisions go into effect.

"The draft revised charter would cost $2 billion over four years by imposing 65 provisions with new mandates that increase expenses or reduce revenues," the city's financial department wrote in a slide show presented to the FRC. "There are no provisions that would reduce expenses or grow revenues (to help make up for new expenses)."

Multiple Charter Revision Commission members on Monday disputed the city's cost estimates, saying they haven't seen the underlying numbers to back them up. Charter commissioner Richard Mack said during public comment that the body has been asking the city for a "detailed explanation" of the budget assumptions for months and they've "refused."

The Financial Review Commission posted the documents to its website late Monday afternoon.

The city estimates the charter changes alone would take up nearly half the city's revenue next fiscal year $488 million out of a projected $995 million. The figures are similar for the next couple years, with the charter requiring 46-47 percent of anticipated revenue.

"We would be on the road to a second bankruptcy," the presentation reads. Tanya Stoudemire, chief deputy CFO for the city of Detroit, said it is laced with "unfunded mandates" and would make business investment in the city less attractive.

"The charter that's proposed ... will send us straight back to state oversight and bankruptcy," Duggan said in response to media questions at an unrelated event Monday in Grandmont Rosedale. "You put in things like free sidewalks, free buses, free internet ... no way to pay for them, this is how Detroit got in the mess it was in. The governor has to decide whether it's legal, and then from there the voters will get a chance to decide, we'll see how it plays out."

Prompted by the Duggan administration's concerns, Stoudemire also on Monday asked the Financial Review Commission to create a subcommittee to review the proposed charter revisions.

Michigan Treasurer Rachael Eubanks, the FRC's chairperson, said it makes sense to do so as the FRC considers whether or not it will, for the fourth year, continue to waive its rights to active financial oversight of Detroit. That vote is in June.

Charter Revision Commission members spoke up during public comment, saying the city is knocking a process with which it has refused to help. The city didn't provide cost-estimating assistance or work with the commission enough in general, charter commissioner Joanna Underwood said. Members also argued the city's cost estimates are overly large.

Lamont Satchel, the Charter Revision Commission's general counsel, said it's not accurate to call charter revisions unfunded mandates.

"Any charter provision is going to be an unfunded mandate, because the charter commission has no authority or ability to provide funding for a specific proposal," Satchel said. "That is always left up to the city to provide the funding for any specific proposed charter revision."

Underwood said the commission plans to respond to what she calls the Duggan administration's "exaggerated" cost estimates.

"We don't want to put the city back through bankruptcy, either," said Mack, also a charter commissioner.

But he hopes the Financial Review Commission will go through the city's estimates with a fine-toothed comb. He says there are some "deeply flawed" budget assumptions.

The commission is expected to present its own side of the story at the next monthly Financial Review Commission meeting, May 24.

Detroit's budget team analyzed a previous draft and said it would cost the city $3.4 billion over four years. The commission made changes to the 2012 charter, which the city reviewed to get the new $2 billion figure. Those then got submitted to Gov. Gretchen Whitmer March 5. She needs to approve it before it goes on the city's ballot.

The Charter Revision Commission expects the charter revisions to go for a vote on the Aug. 3 primary ballot.

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Detroit officials, commission fight over whether charter revision would put city back in bankruptcy - Crain's Detroit Business

A number of issues have emerged that analysts will encounter when performing a valuation in a bankruptcy context. Valuation analysts who become involved in bankruptcy-related assignments should expect their work to come under a great deal of scrutiny because most of these engagements are done within a litigation or some other adversarial context, cautioned Robert Reilly, a managing director at Willamette Management Associates, during a BVR webinar back in 2017. While his remarks were made a few years ago, they continue to resonate, and a chapter from Business Valuation and Bankruptcy: Case Law Compendium, 3rd edition, contains more of his timeless advice on how to handle the challenges valuation experts will face.

Tip:Be familiar with the relevant sections of the Bankruptcy Code and the Bankruptcy Rules, but you should not be making legal decisions. Do not hesitate to ask for legal instructions from counsel with regard to any bankruptcy-related legal issues.

Tip:The courts seem to adopt the known or knowable rule, Reilly says. You should consider only that information that was known or knowable as of the time of the valuation date.

3. Reliance on management projections. In a bankruptcy context, it is not uncommon for debtor company management to prepare various financial projection versions. One version could be prepared for the debtor board, one for the debtors bank, one for a potential acquirer, and maybe others. In this case, you should perform sufficient due diligence regarding these projections to conclude which version is most appropriate for the purpose and objective of the bankruptcy valuation. If possible, you should avoid relying on projections prepared after the bankruptcy litigation is filed. Even if such post-petition filing projections are perfectly reasonable, some party in interest may allege that the projections are biased and litigation-driven. Also, try to learn who prepared the projections and whether those individuals were qualified to do it.

Tip:If you say that you relied on managements projections, be prepared for this question from the judge: So these projections were prepared by management. This is the same management team that led this company into bankruptcy today. Why are you relying on this management team again? Obviously, they didnt do a very good job of managing the company. Good point, and thats probably right, but that may be the most reliable data you have available. You need to take that into consideration and be ready to explain.

4. Debt interest rates.The current commercial debt interest rates may be considered unreasonably low, Reilly points out. You need to determine whether the use of such interest rates is appropriate in determining the debtor company weighted average cost of capital (WACC).

Tip:An unreasonably low cost of debt can understate WACC, which may overstate the debtor company value. Ask yourself this question: If the debtor company obtained new financing today, could it actually enjoy the benefit of current relatively low interest rates?

5. Due diligence. Rest assured that you will always be questioned on the reasonableness of your due diligence because you typically have limited access to financial or operational documents (troubled firms are lax in filing documents) and company management has typically moved on, so you may not even be able to talk with certain key people.

Tip:Keep in mind that hindsight is always 20-20 and its easy for the opposition to point out that everyone knows what really happened. So be prepared to show that you did enough due diligence to be convinced that the valuation was correct as of the valuation date.

6. Rules of thumb. The bankruptcy court does not look very favorably on rules of thumb, notes Reilly. If they apply at all, they may apply to an average company in that industry, but your subject company is in financial distress, so its probably not average.

Tip:Do not use industry rules of thumb as a primary valuation method. If rules of thumb are used at all, they should be supported by actual empirical data.

Conclusion

Of course, this just hits the high points of one facet of valuations in a bankruptcy context. One interesting piece of advice Reilly gave when summing up is that your valuation report should be your best friend, available at your fingertips to help you answer every question you will face. But, to fulfill this role, your report must be clear, convincing, and cogent. It also must be replicable, transparent, and well-supported with source documents. Then you can answer every question by starting with As I said in my report, which will heighten your credibility.

To see the complete list of tips on how to handle issues in bankruptcy valuations or to learn more about bankruptcy as it relates to business valuation, be sure to check out BVRs Business Valuation and Bankruptcy: Case Law Compendium, 3rd edition. Preview the table of contents and look inside to learn more about this invaluable resource for business valuation professionals to stay ahead of the game.

Editors note: The full version of this work originally appeared in an articlein the July 2017 issue of Business Valuation Update.

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Six Tips for Handling Key Issues in Tricky Bankruptcy Valuations - BVWire News

Dive Brief:

More than two and a half years have passed since Sears Holdings filed for Chapter 11, but the case and the financial drama around it have yet to be resolved.

In terms of bankruptcy professional fees, Sears is the most expensive retail bankruptcyin recent years of elevated filings in the industry, according to Debtwire data shared with Retail Dive earlier this year.

Driving that expense in part is the sprawling corporate complexity engineered by Lampert during his time as Sears Holdings' chief executive, majority shareholder (through his ESL Investments fund), biggest lender, major landlord and other entanglements. By the time the company filed for bankruptcy, it was a byzantine web of corporate financialization built atop an already massive and broad corporate empire that preceded Lampert.

As Enrique Acevedo, a director at M-III Advisory Partners currently advising Sears Holdings, put it in a recent filing, "Sears Holdings Corporation was a complex organization, with a long history and vast, sprawling organizational structure composed of numerous divisions, projects, and teams and operated by a multitude of people pursuant to many and varied practices and processes."

Lampert broke ties with Sears Holdings when he took on the company's remaining stores and created a new company, Transformco, to hold them. Without stores or operations, Sears Holdings has essentially been a corporate husk ever since. Yet it is still on the hook for legal bills and vendor claims made while it had stores to operate.

Suppliers trying to get payment from Sears Holdings during its Chapter 11 have long worried that the entity was administratively insolvent, meaning its bills in bankruptcy exceeded the value of its assets. The complexity and legal tussles throughout the case including with Transformcohave added to the company's massive pile of legal and consultant bills.

In fact, Sears Holdings is still wrangling over money with Transformco. In Acevedo's filing, the consultant detailed how M-III has been trying to recover funds from Transformco on behalf of Sears Holdings, including cash in overseas accounts cleared out while Lampert was still in charge of the old Sears.

While Sears Holdings no longer is a retailer in any real sense, its current cash shortfall has an impact on the ecosystem of vendors that built up around it and sells to other retailers. As with Toys R Us, suppliers burned in the Sears bankruptcy have reason to be leery of selling to distressed retailers in danger of bankruptcy, which can magnify those retailers' woes.

As for Transformco, which operates the last Sears and Kmart stores in the country, it keeps shrinking in store count, as Sears Holdings did under Eddie Lampert.

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The husk of Sears Holdings is still in bankruptcy and $81M in the hole - Retail Dive

A creditor of Kangmei Pharmaceutical Co. (600518.SH) filed suit seeking bankruptcy restructuring of the scandal-plagued drugmaker as the company posted a massive annual loss of 27.7 billion yuan ($4.3 billion).

Guangdong Jiedong Rural Commercial Bank sued Kangmei in a local court April 22, Guangdong-based Kangmei said in a filing Tuesday as it reported 2020 financial results. Jiedong Rural Commercial Bank accused Kangmei of failure to repay 49 million yuan of debts.

Kangmeis 2020 annual losses reached 27.7 billion yuan, surging nearly five-fold from 4.7 billion yuan a year ago, the company reported the same day. Kangmei attributed the widened losses asset write-offs mainly due to inventory impairment.

The court hasnt formally responded to the bankruptcy restructuring request, but the case will bring uncertainties to some of Kangmeis creditors which are pursuing a class action against the company.

Earlier this month, a court in southern Chinas Guangzhou city accepted a lawsuit filed by a group of retail investors through a special representative against Kangmei on fraud allegations, marking the first ever class-action lawsuit against a listed company in China.

Zang Xiaoli, a lawyer at Beijing Shize Law Firm, said if the bankruptcy restructuring is formally accepted by the court, all other civil lawsuits and litigation against Kangmei will be suspended, affecting the class-action suit.

Once one of the countrys biggest listed drugmakers, Kangmei has been struggling to survive since the revelation of a multibillion-dollar financial reporting fraud in 2019 when Kangmei acknowledged multiple accounting errors in its 2017 results, leading to a 29.9 billion yuan overstatement its cash holding.

An investigation by the China Securities Regulatory Commission subsequently found that the company engaged in a series of illegal activities including forging documents for nonexistent business activities leading to an overstatement of cash holdings amounting to 88.7 billion yuan from 2016 to 2018. In May 2020, the securities regulator fined Kangmei 600,000 yuan.

In July, Kangmeis then-Chairman Ma Xingtian was taken into police custody on suspicion of illegal disclosure of information and failure to disclose important information.

The Kangmei scandal sent shockwaves through Chinas bond market and triggered a broader crackdown on financial institutions misconduct in bond issuance. GF Securities Co. Ltd., a major underwriter of Kangmeis bonds, was banned from the securities-sponsorship business for six months and from bond underwriting for a year for its role in the affair.

Kangmei said in July that its controlling shareholder, Kangmei Industry Investment Holdings Co. Ltd., was planning a major event that might lead to a change in control. In September, a special-purpose vehicle was set up by local state-owned enterprises to temporarily take control of Kangmei as part of a rescue orchestrated by the Guangdong provincial government, according to Kangmei filings.

Kangmeis creditors said at that time they would reserve judgment on the deal. We still need to observe how the takeover goes, see if theres any liquidity support for Kangmei and if there will be any moves to restructure the company, one institutional bondholder told Caixin in September.

According to Kangmeis latest financial report, its total assets stood at 36.2 billion yuan by the end of 2020 with only 552 million yuan in cash holding. The company has become insolvent with 43.3 billion yuan of debt.

Timmy Shen contributed to this story.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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Scandal-Plagued Kangmei Hit With Bankruptcy Restructuring Suit - Caixin Global

Chapter 11

DebtorName

BusinessType

BankruptcyCourt

Assets

Liabilities

FilingDate

L&L Wings, Inc.*(New York, NY)

Clothing Stores

Manhattan(NY)

$10,000,001to$50,000,000

$50,000,001to$100,000,000

04/24/21

Connections Community Support Programs, Inc.**(Wilmington, DE)

Psychiatric andSubstance AbuseHospital

Wilmington(DE)

$50,000,001to$100,000,000

$50,000,001to$100,000,000

04/19/21

WB Supply LLC***(Pampa, TX)

Building Materialand SuppliesDealers

Wilmington(DE)

$10,000,001to$50,000,000

$10,000,001to$50,000,000

04/20/21

Adara Enterprises Corp.(New York, NY)

FinancialInvestment

Wilmington(DE)

$1,000,001to$10,000,000

$10,000,001to$50,000,000

04/22/21

Augustus Intelligence Inc.(New York, NY)

SoftwarePublishers

Wilmington(DE)

$10,000,001to$50,000,000

$1,000,001to$10,000,000

04/24/21

Secure Home Holdings LLC(Newton Square, PA)

Investigation andSecurity Services

Wilmington(DE)

$100,000,001to$500,000,000

$100,000,001to$500,000,000

04/25/21

ACA Security Systems, LP****(Chatsworth, CA)

Investigation andSecurity Services

Wilmington(DE)

$100,000,001to$500,000,000

$100,000,001to$500,000,000

04/25/21

Hawk Creations, LLC(Fort Worth, TX)

Investigation andSecurity Services

Wilmington(DE)

$100,000,001to$500,000,000

$100,000,001to$500,000,000

04/25/21

* DBA: WINGS** other names used: Connections, CCSP, Addictions Coalitions of Delaware, Inc.*** Other names used: W-B Supply Co. Inc. WBS, Inc. WB Oilfield Supplies Inc. WB Artificial Lift Inc. W-B Supply Company WBS Supply LLC Highland Artificial Lift Systems, Ltd. Permian Pump & Supply, Limited Partnership Beck Oilfield Supply LLC Beck Oilfield Supply, Incorporated**** DBA: ACS Security, My Alarm Center

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Chapter 11 Bankruptcy Alert for the week of April 25, 2021 - The National Law Review

The Small Business Administration (SBA) has made an adjustment to its guidance to provide that entities which have concluded a bankruptcy proceeding are not, for purposes of PPP eligibility, considered in bankruptcy. Entities which are presently in bankruptcy are not eligible for a PPP loan.

The SBAs latest Frequently Asked Questions (found at https://www.sba.gov/sites/default/files/2021-04/PPP%20FAQs%204.6.21%20FINAL-508.pdf) contain a new FAQ Number 67. It provides that for PPP eligibility purposes, a party is deemed to have left a bankruptcy proceeding under the following circumstances:

Chapter 7 the Bankruptcy Court has entered a discharge order.

Chapters 11, 12 and 13 the Bankruptcy Court has entered an order confirming the plan.

Any Chapter the Bankruptcy Court has entered an order dismissing the case.

For an entity to be eligible for a PPP loan, the above orders must be entered before the date of the PPP loan application.

If an entity is permanently closed as a result of a bankruptcy filing, it is not eligible for a PPP loan.

Thus, an entity that has recently resolved its bankruptcy case, and is otherwise eligible for a PPP loan, must submit its application before the May 31 deadline. If an entity is otherwise eligible for a PPP loan and is in a bankruptcy proceeding that can be quickly resolved, it may wish to attempt to do so before the May 31 PPP loan application filing deadline.

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Buchalter COVID-19 Client Alert: PPP Loans Now Available to Otherwise-Eligible Companies That Have Ended Their Bankruptcy Proceedings - JD Supra

Several trucking and logistics companies are collectively owed hundreds of thousands of dollars after an Indiana-based household goods brokerage shuttered operations and filed Chapter 7 bankruptcy in mid-April.

Guardian International Inc., doing business as Guardian Freight, filed its petition in the U.S. Bankruptcy Court for the Northern District of Indiana on April 14.

Although incorporated in Maryland, the household goods companys principal office was in Fort Wayne, Indiana.

In its filing, Guardian Freight lists its assets as between $50,000 and $100,000 and its liabilities as between $500,000 and $1 million.

The shuttered brokerage states that it has up to 49 creditors. The company maintains that no funds will be available for unsecured creditors once it pays administrative fees.

According to Guardian Freights financials, its gross revenues were approximately $164,000 in 2020, a 92% drop from the nearly $2 million in revenue it posted in 2019.

According to a document filed with the Indiana secretary of states office, Sabah Abu Qiyas is the companys president and Tonya Watson served as vice president and office manager before it ceased operations.

According to court documents filed in Marion County, Indiana, Superior Court, Guardian Freight was ordered to pay Indianapolis-based FitzMark Inc. nearly $20,500 in October. In a separate judgment, the court ordered the shuttered brokerage to pay SunteckTTS, which is now part of Dallas-based MODE Transportation (MODE), more than $14,200 for unpaid transportation services in December.

The companys largest unsecured creditor is Cincinnati-based Loth Logistics LLC. Guardian Freight was ordered to pay Loth more than $247,000 in October in a breach-of-contract lawsuit filed in the U.S. District Court for the Southern District of Ohio.

Court filings state that Guardian Freight contracted with Loth to arrange the transportation of hundreds of shipments of goods but failed to pay the brokerage.

The Federal Motor Carrier Safety Administration revoked Guardian Freights household goods broker authority in May 2020.

FreightWaves reached out to Guardian Freight for a comment, but neither the phone number nor the companys website was working.

Other unsecured creditors listed in Guardian Freights bankruptcy petition include North & South Logistics, owed $55,000, PD&S Freight Solutions, owed nearly $57,000, and Watco Supply Chain Services, owed more than $72,400.

A creditors meeting is scheduled for May 20.

Former chief tribal judge sentenced in truck driver ticketing schemeRoad Doctor owner accused of paving way for luxury cars with PPP loanAccounting clerk pleads guilty to swiping $1.1M from carrier

Click for more articles by FreightWaves Clarissa Hawes.

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Truckers, brokers owed hundreds of thousands after Indiana companys bankruptcy - FreightWaves

BATAVIA A federal bankruptcy judge continues to rule in favor of victims of Michael S. Tomaszewski, ruling in the past week that eight debts are not dischargeable as part of Tomaszewskis Chapter 7 bankruptcy.

Chief Bankruptcy Judge Carl L. Bucki this week and on April 15 ruled that the money owed to the victims cannot be discharged through bankruptcy because the debt was a result of fraud on Tomaszewskis part.

Barclay Damon law firm of Buffalo is representing three of Tomaszewskis victims, at no cost to the victims.

The firm said in a news release that the victims are among more than 100 people who are owed a total of more than $575,000.

Tomaszewski earlier this month pleaded guilty to felony charges and admitted stealing the money from clients at his Michael S. Tomaszewski Funeral Home & Cremation Chapel.

Tomaszewski since 2009 had been stealing money that was earmarked for future funeral, burial and cremations.

The money was by law to be deposited in escrow accounts.

Tomaszewski filed for Chapter 11 bankruptcy in February 2020, six months before he was arrested. He listed more than $3 million in debts and about $1 million in assets.

He did not list any pre-need creditors as part of his filing.

After his arrest, however, Tomaszewski amended this bankruptcy petition to include the victims.

Tomaszewski filed a plan that was opposed by the victims and ultimately denied confirmation by the bankruptcy court, Barclay Damon said in the release. Concurrently, he was indicted on criminal charges in connection with the pre-need payments.

In March, Tomaszewski had his bankruptcy filing converted to a Chapter 7 liquidation.

It was unclear how many of Tomaszewskis victims have sought to have their debts declared non-dischargeable.

Genesee County District Attorneys Office is currently reviewing restitution claims as part of a pre-sentence investigation.

As part of Tomaszewskis guilty plea, he must pay restitution to all of his victims. Some have been repaid, Assistant District Attorney Kaitlynn Schmit said.

Tomaszewski pleaded guilty to third-degree grand larceny, first-degree scheme to defraud, first-degree offering a false instrument for filing and to a public health law violation for storing a body for 10 months at the funeral home, without proper burial.

He faces up to seven years in prison when sentenced in July.

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Bankruptcy appears to have no affect on Tomaszewski's victims' restitution claims - The Daily News Online