CPI trustee sues directors and officers for alleged draining of assets

By Caroline Salls

Pittsburgh, April 29 – CPI Corp. Chapter 7 trustee Charles A. Stanziale Jr. filed a lawsuit Wednesday against the company’s directors and officers, alleging that they breached their fiduciary duties by “facilitating and engaging in a pattern and practice of draining assets from the CPI entities,” according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Stanziale said the defendants also repeatedly authorized and paid dividends at a time when CPI was in a pattern of financial decline.

The specific counts being brought against the defendants include avoidance of fraudulent conveyance, breach of duty of loyalty, breach of duty of care, aiding and abetting breach of fiduciary duty, corporate waste, civil conspiracy, unlawful issuance of dividends and disallowance of claims.

The amount sought from the directors and officers will be determined at trial, the complaint said. The trustee is also seeking attorneys’ fees, accountants’ and experts’ fees and costs and expenses.

CPI, a St. Louis-based portrait studio operator, filed for bankruptcy on May 1, 2013. Its Chapter 7 case number is 13-11158.

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