By D.R. STEWART World Staff Writer on Nov 9, 2011, at 2:01 AM Updated on 11/09/11 at 2:54 AM
A proposed $850,000 settlement with a Utah bank and a U.S. Bankruptcy Court motion authorizing payment of attorneys fees and expenses may be near the end of the bankruptcy trustee's litigation in the 22-month-old Arrow Trucking Co. case, court officials say.
Although a host of issues remain in the lawsuit filed in U.S. District Court in Tulsa against former Arrow officers and executives by Transportation Alliance Bank and in the personal bankruptcy case of former Arrow CEO Doug Pielsticker, many of the issues have been resolved in the Arrow bankruptcy, said trustee Patrick J. Malloy III.
On Monday, Malloy filed a motion with the court for $235,232.50 in reimbursement for attorneys fees and $3,941 in expenses related to the TAB litigation.
Malloy and his associates, and Richard Paul and his associates from the Kansas City firm of Stueve Siegel Hanson LLP, spent 571.7 hours in research, conferences, drafting correspondence and in depositions in the TAB litigation, court documents show.
Malloy said he hopes to file with the court this week a motion for a final distribution of Arrow assets to former Arrow employees.
"If the court approves the settlement with TAB (Transportation Alliance Bank, Ogden, Utah) and approves the distribution with employees, there is very little for us to do," Malloy said. "We will be trying to wind it down."
On Friday, Malloy filed a motion proposing a settlement with TAB in which the Utah bank would pay $850,000 to the bankruptcy estate while both TAB and the trustee would dismiss all claims against each other.
The proposed settlement must be approved by U.S. Bankruptcy Judge Dana L. Rasure.
If the judge approves the TAB settlement, the proceeds could be combined with those from a $450,000 settlement approved last month with former Arrow Owner and Chairwoman Carol Pielsticker Bump, Malloy said.
The settlements would enable Malloy to distribute about $2.1 million to more than 500 former Arrow employees, court officials said.
In December 2010, Malloy made an interim distribution of $1.97 million in Arrow assets to 564 former employees who filed wage and employment law violation claims against the estate.
The employee claims against the bankruptcy estate include back wages and claims arising from Arrow's abrupt closing on Dec. 22, 2009, and its violation of the federal WARN Act.
The Worker Adjustment and Retraining Notification Act requires companies employing more than 100 people to give each employee at least 60 days' written notice of a plant closing and the termination of their employment.
Failure to provide the notice can make employers liable for 60 days of wages per employee, the law says.
Malloy estimates Arrow's assets at $8.55 million and liabilities at $98.97 million.
On Jan. 8, 2010, the same day Arrow filed its bankruptcy petition, TAB filed a lawsuit against Arrow, its officers and executives in U.S. District Court in Tulsa.
TAB alleges fraud and racketeering in the collapse of the 61-year-old Tulsa trucking company, court documents show.
The Utah bank, Arrow's lender, alleges a pattern of deceptive and fraudulent practices by Arrow executives who the bank contends were simultaneously looting the company of its assets.
In court documents, TAB alleges executives and officers of Arrow and its affiliate companies committed bank fraud and wire fraud that cost the Utah bank $12.5 million.
Lawyers for TAB allege in the lawsuit that Doug Pielsticker, Chief Financial Officer Jonathan Moore and Secretary and General Counsel Joseph Mowry violated the Federal Racketeer Influenced and Corrupt Organization (RICO) Act by conducting an enterprise whose activities affected interstate commercial lending activities with TAB and other aspects of interstate commerce.
The lawsuit alleges the defendants submitted thousands of fraudulent invoice reports to TAB totaling more than $27 million, of which the bank believes more than $12.5 million were inflated.
The case is expected to go to trial in Tulsa early next year.
In his personal bankruptcy case in U.S. Bankruptcy Court for the Northern District of Texas in Dallas, Doug Pielsticker lists assets of $2.54 million and liabilities of $24.03 million.
Pielsticker faces adversary lawsuits filed against him in bankruptcy court by creditors Transportation Alliance Bank, Citizens Bank of Oklahoma and Susan Pielsticker, his ex-wife, who is suing for unpaid child support and domestic support obligations.
Those cases are expected to go to trial in January, court documents show.
D.R. Stewart 918-581-8451
don.stewart@tulsaworld.com
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