The deadline for filing suit was January 8.
Some staffing firms are among the defendants in the 750 lawsuits that stem from "inquiries/demand letters for preference" mailed last year. The letters sought monies paid out by ECG and Axium back to 90 days before it filed for bankruptcy. Under bankruptcy law, those payments may have to be returned.
Ensemble Chimes at one time operated the largest vendor management system before filing for bankruptcy in January 2008 shortly after its parent company, Axium International Inc., abruptly ran out of money and filed for Chapter 7 bankruptcy, which is liquidation rather than reorganization. That resulted in a swift dismantling of the company.
What remained of Ensemble Chimes was sold out of bankruptcy January 23, 2008, followed by the rest of Axium a week later.
Bankruptcy trustee Howard Ehrenberg said $2 million in settlements have already been reached in the Ensemble Chimes bankruptcy case from the demand letters for preference, although the amount represents only a small portion of the total possible claims.
Often the cases were settled for much less than the initial demand letters. The 750 lawsuits were filed against companies that didn’t respond to the demand letters for preference or did not settle.
Ehrenberg said the 750 lawsuits seek tens of millions of dollars; however, some defendants might have offsets that would reduce their exposure.
Ehrenberg also said a settlement was recently reached with GoldenTree Asset Management, a former lender to Axium.
As a result, Ehrenberg said, GoldenTree will provide the bankruptcy estate with:
• $8.5 million in cash.
• A former Axium building at 210 Victory Blvd. in Burbank, California.
• Its majority interest in claims against Axium’s former auditors, BDO Seidman.
GoldenTree will also waive its claims against the estate for assets in the trustee’s possession.
Money recovered from the GoldenTree settlement will be used to help pay creditors’ claims.
Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail email@example.com.