SSG/SPCK Bankruptcy Filings

I’ve got a treat for anyone following the SSG/SPCK saga today – the fill set of legal papers filed in relation to J Mark Brewer’s attempt to take a UK registered charity into bankruptcy in a Texas court.

To begin at the beginning, we’ll start with the Statement of Financial Affairs:

Statement of Financial Affairs

Points of interest here include the figures given for income in 2006 and 2007 – $4.7 million and $7.5 million – and the list of payments made to creditors in the 90 days prior to filing for bankruptcy which, amongst other things, show that just about the last thing SSG did before filing for bankruptcy and making its staff redundant was transfer around $75,000 to the Orthodox Christian Mission Fund, Houston, although the statement also shows an outstanding debt to the same fund of $494,000. This is on top of another $250,000 of so paid to this fund between September 07 and January 08.

The creditors list also shows Brewer’s law firm to be claiming to be owed $56,000 despite receiving $110,000 in two payments for legal services in August/September 07 – the Charity Commission needs to look carefully at this in the context of regulations on trustee benefit.

Next, there’s Brewer’s Disclosure of compensation disclosing the retainer of $75,000.

Disclosure of Compensation

Followed by Schedules E. F & G which, taken together, list all SSG’s creditors and how much they’re owed.

Amended Schedule E & F

Schedule F continuation

Schedule F continuation_001

Schedule F continuation_002 & Schedule G

We also have an anonymous letter to the court, which points out the Brewer is trying to take a UK charity into bankruptcy under a fictitious company name, signed ‘Outrageous’.

Anonymous Letter

And finally, a fresh and much better copy of the motion to dismiss the bankruptcy application.

Motion to dismiss

One the face of it, this looks for all the world as if its a fraudulent application – remember, J Mark Brewer is a lawyer and while there are significant differences between UK and US law, he should be more than capable of understanding something as basic as the fact that you cannot apply for bankruptcy in a US court on behalf of a UK registered charity.

From the information to hand, there look to be some serious questions about trustee benefit that the Charity Commission need to look into and, and I think this may explain exactly what is going on, as the original agreement for the running of the bookshops was with the Saint Stephen the Great Charitable Trust, which is not an incorporated body and even today, remains an unincorporated subsidiary of the limited by guarantee Saint Stephen the Great Ltd, which Brewer formed in 2007.

I think it is possible, if not likely, that liability for the outstanding debts incurred in this matter, and for any awards arising from the pending employment tribunals, may rest with the charitable trust – and if that is the case, then because it is an unincorporated body its trustees, J Mark Brewer and family, may be personally liable for its debts and that liability is unlimited.

That, if true, would give all of SSG’s creditors a personal claim against Brewer for any monies still owing to them, not to mention provide ample motive for a fraudulent attempt to file for corporate bankrupty on behalf of a UK registered charity under a fictitious company name.

Mr Brewer, you have some serious questions to answer.

(And a major thank you to my sources – you know who you are and I think you will have everyone’s gratitude… except Brewer’s)