Trustee seeks personal bankruptcy against Whitfields [1]
Turning up the heat on the embattled founding couple behind now-defunct payroll-outsourcing firm Sommet Group, bankruptcy trustee Sam Crocker filed suit on Friday to have Brian and Marsha Whitfield declared bankrupt along with Sommet and several affiliated companies.
In a complaint filed in U.S. Bankruptcy Court and available at this link [2], Crocker asserted:
"All evidence indicates that the Whitfields controlled Sommet and the corporate defendants, and used Sommet and the corporate defendants as alter-egos and as instrumentalities to commit a massive fraud against Sommet's clients, customers and creditors."
The legal action asks Bankruptcy Judge Keith Lundin to decree "that Sommet and the defendants were legally the same entity," thus consolidating the Whitfields and the affiliate companies into the bankruptcy estate of Sommet.
Sommet, which handled large amounts of money meant for other companies' payrolls, ceased operations soon after federal agents raided its offices [3] in July. The company was formerly the name sponsor of Nashville's downtown arena.
A group of companies that had been clients of Sommet brought the involuntary Chapter 7 bankruptcy case in late July. Frost Brown Todd attorney Bobby Guy, who represents the creditors along with several colleagues from that firm, filed Friday's complaint on behalf of Crocker.
Peter Strianse of Tune, Entrekin & White in Nashville and Benjamin Perry of Balthrop, Perry & Noe in Ashland City represent Brian Whitfield, while Kim Hodde of the Music Row firm Hodde & Associates is counsel to Marsha Whitfield.
None of those attorneys could be reached for comment today.
On September 21, Lundin held the Whitfields in contempt [4] for failing to cooperate with Crocker's efforts to follow the money in the Sommet meltdown. The ruling followed depositions in which Brian Whitfield invoked his Fifth Amendment right against self-incrimination 132 times in a little over two hours and Marsha Whitfield took the Fifth 159 times in an hour under oath.
Lundin gave the couple five days to comply with Crocker's requests for information or else face unspecified sanctions. The case record does not show any activity since the contempt hearing.
To date, no criminal charges have been filed over the Sommet affair. During Marsha Whitfield's testimony last month, however, attorney Hodde stated for the record: "It's clear that there will be a criminal case in the future."
- Franklin, Tenn. [5]
- Nashville [6]
- Sommet Group [7]
- Keith M. Lundin [8]
- Robert A. Guy Jr. [9]
- Samuel K. Crocker [10]
- Bankruptcy [11]
- Criminal prosecutions: White-collar offenses [12]
- Litigation [13]