American Screw & Rivets Feels Pinch of Bankruptcy
Posted on July 10th, 2011
American Screw & Rivet, an Anderson, South Carolina-based manufacturing firm, was forced to lock its doors about eight months ago when a judge, in an emergency Chapter 7 bankruptcy hearing, appointed W.M. Hales Auction Company to dispose of the company’s assets.
Adding insult to injury, the manufacturer is facing a potential $1 million cleanup bill from the federal government for the alleged illegal disposing of tons of liquid corrosives.
According to court documents, American Screw & Rivet owes at least $4.9 million to six large lenders: Aquesta Bank, U.S. Bancorp Equipment Finance Inc., American Bank, U.S. Bank, Palmetto Bank and The Huntington National Bank. Other creditors include: White Jones Hardware, Wayne’s Overhead Doors, Welborn Tire Service, Fant’s Office Supply, Stringer Gas Service, The People’s Bank, Sandy Springs Water District, Belton Metal and RWI Industrial.
In an article on www.independentmail.com by Anna Mitchell, attorneys for the lenders said that the owner of American Screw & Rivet, Nancy Stein, created “what amounted to a ‘Ponzi Scheme’” and that she “had lied about how many machines they owned and how much money they had already borrowed using them as collateral”.
Court documents show that the manufacturing company apparently “used fictitious machinery manufacturers, invoices and serial numbers and succeeded in double-pledging its assets to obtain millions of dollars in financing”. They also showed that over “19 lawsuits were pending against American Screw & Rivet when the lenders petitioned the court to place the company in bankruptcy. A Chapter 7 bankruptcy requires that a business liquidate all its assets to pay back creditors.”
Documents also state that “It is unknown how or with what funding the debtor is currently defending all nineteen lawsuits.”
The EPA has been cleaning the site of unsafe and illegal chemical spills and other forms of pollution.
If you are considering filing for bankruptcy protection, contact the lawyers at Legal Helpers. We are knowledgeable and experienced in the field of Chapter 7 and Chapter 13 personal bankruptcies. We listen to you and can explain economic plans that will enable you get out of your current financial difficulties. .
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