Sears bait and switched American Greetings out of more than a half million dollars, luring them in with claims of a trust fund to place all monies received from American Greetings sales. The account had $527,239 in it when the funds suddenly disappeared. Then the response from Sears' attorney was, 'what trust fund?'
Take a look at the filing from AG's attorney, which effectively calls Sears a dirty, thieving liar:
Quote :
Notwithstanding this agreement, AG has not received the AG Trust Funds. AG's counsel called the Debtors' counsel the week of October 22nd and informed the Debtors that AG had yet to receive over half a million dollars in funds collected prior to the bankruptcy. Debtors' counsel informed AG's counsel that he would look into it. Several days passed without a response. On Monday, October 29, 2018, AG's counsel emailed Debtors' counsel and provided a spreadsheet regarding the AG Trust Funds that the Debtors had failed to remit. That same day, Debtors' counsel sent an email stating: "What are we going to do about this?"
A few minutes later, Debtors' counsel called AG's counsel. Debtors' counsel asserted that there was "no trust," but only a "debtor/creditor relationship," the "funds were commingled," and that AG should not expect to receive a check. Debtors' counsel further asserted that because the funds were "commingled in a bank account," AG lost its interest in the funds under Article 9 of the Uniform Commercial Code (the "UCC"). When AG's counsel took issue with virtually everything Debtors' counsel had to say, Debtors' counsel invited AG to send the Debtors a position statement that the Debtors could send to BofA. AG did so on November 7, 2018. AG has yet to receive a response.
The Debtors have not disclosed what happened to the AG Trust Funds. If they are not in the Debtors' possession, the Debtors' cash management motion (Dkt. No. 5) indicates that the AG Trust Funds may have been swept by BofA or applied by BofA to the Debtors' revolving credit facility. Given AG's UCC-1 filings, AG submits that if BofA took the AG Trust Funds, it did so with notice of AG's interest therein. This bears on BofA's lack of good faith and is relevant to the Court's consideration of the Motion.
https://restructuring.primeclerk.com/sears/Home-DownloadPDF?id1=MTE3MjY2&id2=0