| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers M > Headlines for Mortgage Lenders Network USA, Inc. > News item |
Mortgage Lenders former CEO's request for criminal prosecution injunction denied
By Caroline Salls
Pittsburgh, April 18 - Mortgage Lenders Network USA, Inc. director and former chief executive officer and president Mitchell Heffernan's request to keep the State of Connecticut from beginning criminal prosecution against him for collecting unsecured company debts for employee commissions was denied Wednesday by the U.S. Bankruptcy Court for the District of Delaware.
According to the motion, during the 45-day period before the company's bankruptcy filing, its largest secured creditor Residential Funding Co., LLC, Residential's restructuring consultant Navigant Capital Advisors, LLC and Mortgage Lenders' restructuring consultant Scouler Andrews took over the company's cash management, and all financial transactions and payments to creditors were required to be approved by Residential and Navigant.
As a result, Heffernan said he had no control over payments to any of the company's creditors, including employee commissions, from mid-December through the Feb. 5 bankruptcy filing date.
In addition, Heffernan said he was directed not to pay any commissions to employees because the commissions were disputed and the bankruptcy court would require the commission payments to be repaid to the company as preferential payments.
As previously reported, Heffernan reached a stipulation with Mortgage Lenders counsel James I. Stang, of Pachulski Stang Ziehl Young Jones & Weintraub LLP, to clarify that Stang did not advise the company whether to pay or not pay employee commissions.
Mortgage Lenders Network, a Middletown, Conn.-based lending company, filed for bankruptcy on Feb. 5. Its Chapter 11 case number is 07-10146.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.