Trucking Company Owner Files Chapter 7
One of the nation’s largest cattle brokerages, Eastern Livestock of New Albany, Indiana, abruptly collapsed in November 2010 and has filed for Chapter 11 bankruptcy protection; company principal owner Thomas P. Gibson has also filed for Chapter 7 personal bankruptcy. Affiliate company East-West Trucking has also filed a Chapter 7 bankruptcy petition. Gibson lists interests in some 17 companies in his bankruptcy filing.According to Clarissa Kell-Holland in an article on www.landline.mag.com (The Business Magazine for Professional Truckers), Eastern Livestock and East-West Trucking allegedly sent more than $130 million in worthless checks to over 740 cattle sellers and truckers who haul the bovines. In the article, Eastern Livestock bankruptcy trustee James Knauer states that investigators had traced “phony sales which were used to prop up the cash flow” back to 2008, although not on the “same scale as in later years.” In 2010, the company reported inflated sales of $3.9 billion, triple the number it listed in sales in 2009. According to court documents, Eastern Livestock’s bank, the Fifth Third Bank of Cincinnati, averred that the cattle brokerage’s finances started unraveling on November 1, 2010. During the same period, a bank audit discovered an “elaborate check-kiting scheme” that attempted to defraud Fifth Third of millions of dollars.Knauer also said that during the three months prior to Eastern Livestock filing for bankruptcy, they issued over $630 million in checks to various companies, including $365 million to Thomas Gibson. Knauer added that there are claims on which the bank does not have a lien and that any recovery will be used to compensate other creditors. Some of the defrauded truckers have filed claims on the Grain Inspection, Packers and Stockyards Administration (GIPSA), in an attempt to be repaid some of their operating expenses.Michael J. Walro, a trustee in the Chapter 7 bankruptcy filing, reported that a sale of some of East-West’s equipment grossed over $1.5 million for the estate and that, to date, 21 claims have been filed totaling over $7.8 million.For experienced and knowledgeable Chapter 7 or Chapter 13 personal bankruptcy assistance, trust the attorneys from Legal Helpers who have helped over 50,000 consumers in the last three years discharge their debt. For your free initial consultation, please call 800-260-1402 or log onto www.legalhelpers.com.
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