Irwin Jacobs leads lawsuit against Genmar trusteePosted on
Irwin Jacobs and others have filed suit against Charles Ries, the Chapter 7 trustee of the bankruptcy estates of Genmar Holdings and certain former subsidiaries of the company, saying he has published false statements concerning past business dealings that have caused Jacobs to suffer “harm to his business and personal reputation” and have injured “current and prospective business relationships in the boating industry.”
Jacobs is seeking damages as a result of the defendant’s actions, all attorney fees and expenses, court costs and other relief as deemed proper by the court. He is also asking for a trial by jury and does not consent to a bankruptcy court conducting the jury trial.
In addition to Jacobs, other plaintiffs include his wife, Alexandra Jacobs, Jacobs Management Corp. and Operation Bass Inc., which does business as FLW Outdoors.
In his suit, filed last week in district court in Morrison County, Minn., Jacobs said the trustee has filed “multiple lawsuits containing false, outrageous and defamatory statements that have significantly injured and tortuously interfered with plaintiffs’ business opportunities and prospective business relationships.”
Specifically, the suit said Ries:
• Falsely accused plaintiffs of receiving millions of dollars in allegedly fraudulent and preferential payments from the Genmar debtors that were never made or received by the plaintiffs.
• Knowingly published false statements concerning the plaintiffs’ prior business dealings with Genmar.
• Wrongfully sued the plaintiffs and their business associates for ordinary business transfers.
The suit goes on to say that one year after his appointment, the trustee initiated hundreds of “scattershot” lawsuits” against the plaintiffs and many of the plaintiffs’ former and current business associates. The trustee asserted that Genmar began its descent into insolvency in the early 2000s and that Genmar had nearly perpetual annual operating losses, beginning in 2003.
Jacobs denies that allegation, noting in court documents that when a chief restructuring officer came in during bankruptcy proceedings in 2009 he noted that Genmar ran a tight operation and had strong financial controls in place.
Genmar filed for Chapter 11 in June 2009, although the reorganization later turned into a liquidation. Jacobs noted that three months prior to filing for bankruptcy, he and a business associate invested $35 million of their own money in the company.
The suit says, “Since the adversary proceeding against Mr. Jacobs was commenced, his current and potential business partners, dealers and distributors have expressed significant concern about the financial health of Mr. Jacobs’ business and the soundness of exploring new business opportunities or continuing with existing business relationships with Mr. Jacobs.”
Ries was in a meeting this morning and could not immediately be reached for comment.