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Archive | January 11, 2010

Creative Memories Executives Sued By Former Employee Shareholders

The Antioch Company Litigation Trust is suing 30 executives and firms who worked for Creative Memories over the company’s 2008 bankruptcy filing.

The trust was founded and funded as part of  The Antioch Company’s bankruptcy to serve the employee shareholders whose savings and retirement accounts held in Antioch Company stock were wiped out by the bankruptcy settlement. The trust’s purpose is to pursue compensation for those losses.

The list of defendants being sued by the Trust in the case include:

  • Lee Morgan
  • Asha Morgan Moran
  • Chandra Attiken
  • Steve Bevelhymer
  • Nancy Blair
  • Ben Carlson
  • Candlewood Partners LLC
  • CRG Partners Group, LLC
  • Michael Epstein
  • Evolve Bank and Trust
  • Karen Felix
  • Greatbanc Trust Company
  • Barry Hoskins
  • Houlihan, Lokey, Howard & Zukin, Inc.
  • Kimberly Lipson-Wilson
  • Wayne Alan Luce
  • Jeanine McLaughlin
  • Marty Moran
  • Lee Morgan GDOT Trust #1
  • Lee Morgan GDOT Trust #2
  • Lee Morgan GDOT Trust #3
  • Lee Morgan Pour-Over Trust #1
  • Lee Morgan Pour-Over Trust #2
  • G. Robert Morris
  • James Northrup
  • Paul Ravaris
  • Reliance Trust Company
  • Denis Sanan
  • Malte Von Matthiessen
  • Frederick Walker

Many in the scrapbook industry will recognize the name of CRG Partners. It is the same firm of turnaround/bankruptcy consultants that was hired by CK Media to advise it prior to its sale to New Track Media last year.

According to a statement issued by a representative on behalf of the members of the trust, the reason for the suit is that:

The Trust alleges that all of the defendants put their own interests ahead of the Company’s interests and that this self-dealing caused the Company’s demise.  The Trust alleges that Lee Morgan and Asha Morgan-Moran, both former chief executive officers of the Company, along with the officers and directors they enlisted, used The Antioch Company’s employee stock ownership plan to take enormous amounts of cash out of the Company, leaving it saddled with debt and in the hands of ineffective and conflicted management.  Even though the Company was entirely employee-owned, the Trust alleges that it was always operated for the benefit of the Morgan family and to the detriment of employees and creditors.  Among other things, the Complaint seeks an unspecified amount of damages for breaches of fiduciary duties and professional negligence.

The Yellow Springs (OH) News has taken an excellent look at events in the case that provides more details of the suit’s allegations.

Defendants in the case have until later this month to respond to the suit. A representative for Creative Memories has not responded to a request from Scrapbook Update for comment on the case.

 

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Noell Hyman and I will be on the panel each week. A third panelist slot will rotate between Ana Cabrera, Lain Ehmann and Angie Lucas (and probably a fourth person to be named later). Then each week we will also welcome a guest for an interview segment.

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