JR Harris & Co. filed for bankruptcy on Friday following a class action lawsuit that would force the company to pay $4 million and a settlement claim owed to the Texas attorney general’s office for $1.1 million after they ruled that the company had misled customers.
In their official bankruptcy filings the company revealed that they owe their 20 largest unsecured creditors a total of $10.9 million (including the lawsuit and settlement numbers listed above). The filing also shows that much of the money owed is in relation to internet and TV advertising along with landlord judgments.
Following the bankruptcy filing the company must meet with officials in Texas court on Friday to discuss a request to force JK Harris into receivership over the $1.1 million settlement.
Accroding to the Post & Courier:
The bankruptcy filing in South Carolina pre-empted that and halted debt-collection efforts, but the Texas attorney general is also suing company founder John K. Harris personally.
John is reported to “care less” about the lawsuits filed against him after years of cash-flow problems, lawsuits and claims that his company misled customers, often by taking fees from consumers who didn’t qualify for the type of tax debt relief they were promising.
According to Harris his company is only worth about $7.5 million and he’s hoping he can sell off the company and re-hire his laid off employees for another venture in the future. Harris has stuck behind his employees, asking a judge on Friday for an emergency motion to pay $185,000 in employee wages.
Yet another example of corporate greed through misleading customers, does this bankruptcy case really surprise anyone?