- 5 - failed to keep complete and accurate records regarding the rental deposits. Sometime prior to 1989, AHC began experiencing financial distress. In June 1988, AHC’s controller quit because of the company’s deteriorating financial condition. AHC hired a new controller, but this replacement quit 3 months later for similar reasons. Shortly thereafter, AHC sought the services of an accounting firm to evaluate its corporate records for taxable year 1988. The accounting firm determined that AHC’s corporate records were in poor condition and many required reconstruction. In December 1988, AHC filed a chapter 11 bankruptcy petition. The petition was subsequently converted to a chapter 7 petition. During the pendency of the bankruptcy proceedings, a creditors committee filed suit against AHC alleging improper transfers and fraudulent conveyances. The creditors committee hired Piper & Marbury, a law firm, to represent it in the bankruptcy proceedings. Piper & Marbury hired the accounting firm of Ernst & Young to evaluate AHC’s financial records. In January 1989, before the process of reconstructing AHC’s financial records for 1988 had been completed, the creditors committee obtained possession of such records. Sometime after October 1989, the creditors committee returned the records to AHC. Upon receipt of the records, AHC discovered that some records were missing. Consequently, neither petitioner nor Mr.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011