Zelenka Farms creditor Triangle wins examination of company auditor

New York, March 9 – Zelenka Farms creditor Triangle Capital Corp. was given permission for Chapter 7 trustee Diane G. Reed to examine the company’s auditor, HoganTaylor LLP, in an order filed Thursday in the U.S. Bankruptcy Court for the Northern District of Texas.

Triangle or attorneys Sherman & Yaquinto LLP – but not Thomas, Alexander, Forrester & Sorensen LLP, will be allowed to be present at the examination and will be able to ask additional questions after the trustee’s examination.

The court ordered that the trustee, Triangle and HoganTaylor should attempt to agree on the documents to be produced and the timing.

If agreement cannot be reached, the parties will be allowed to return to court for a hearing.

In its request for an examination, Triangle said it wanted HoganTaylor to produce all documents concerning its audit work for the years 2012 to 2016 for BFN Operations LLC, which did business under the name Zelenka Farms.

Triangle said it was one of Zelenka’s largest creditors with a claim of more than $34 million, none of which has been repaid.

The lender noted that HoganTaylor reported for each year from 2012 until the bankruptcy filing that the company’s financials accurately represented its financial condition. HoganTaylor was replaced by BDO Seidman in 2015.

Triangle said: “In light of the relationship between BFN and HoganTaylor and the events leading up to BFN’s Chapter 11 filing, it is important that BFN, Triangle and the other creditors of BFN obtain information from HoganTaylor. Triangle is informed and believes that HoganTaylor is in possession of information regarding BFN’s business operations, as well as its assets and liabilities. Moreover, HoganTaylor reviewed and analyzed (or should have reviewed and analyzed) transactions and relationships that were fundamental to BFN’s business, including BFN’s lending relationships that are now important to the ultimate resolution of this case.”

Zelenka Farms is an Irving, Texas-based wholesale plant grower and distributor. The company filed for bankruptcy on June 17, 2016 under Chapter 11 case number 16-32435. On Jan. 23, the proceedings were converted to Chapter 7.

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