CERTIFIED PUBLIC ACCOUNTANTS
 
FRAUD EXAMINERS  
 
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Creditor

Hess Industries, Inc.

Hess Industries, Inc.

Hess Industries, Inc (Hess), a leading manufacturer of metal-forming machines based in Niles, MI, filed for Chapter 7 Bankruptcy protection on July 10, 2012. At the time of the filing, Hess estimated assets in excess of $10 million, primarily consisting of trade receivables, furniture and equipment and inventory.

ACCOUNTS RECEIVABLE:

At the time of the filing, Hess estimated 7,326,733.71 in trade accounts receivable. Based on a preliminary review by the Trustee and his professionals, it was estimated that 600,000 was collectible. To date, the Trustee has collected $1,492,934.93 in Trade Accounts receivable, along with an additional $50,000 in accounts receivable that was unbilled at the time of the filing.

MACHINERY, HARDWARE, AND SOFTWARE:

On November 8, 2012 an order was entered, after an auction, authorizing the sale of substantially all of Hess' assets to Zhejiang Jingu Company Limited, and Pacific Wheel, Inc. and included:

  • All Truck Line Assets
  • All Tooling Assets
  • Office Furniture and Equipment
  • All Tradenames, Drawings, and Product Technology
  • All inventory (Raw Materials and Work in Process)
  • The rights, claims, credits, causes of action and rights of set-off against third parties related to the Purchased assets

For the assets listed above, the Trustee received a total of $19,250,000.00

In addition, the Trustee has sold miscellaneous automobiles and inventory as scrap, generating approximately an additional $24,000.

MISCELLAENOUS COLLECTIONS:

The Trustee has also worked to secure turnover of bank funds, collection of miscellaneous refunds and deposits. Overall, these actions have brought approximately $375,000 into the estate.

AVOIDANCE ACTIONS:

The Trustee and his professionals evaluated all cash disbursements of Hess for the 90 day period and beyond. The Trustee issued 27 demand letters seeking to avoid 90 day transfers. To date, the estate has collected $56,300 as a result of those actions. The Trustee has filed a D&O cause of action against certain former officers and directors. The Trustee also filed suit for recovery of an insider preference from the company's owner. Both matters are still in the discovery phase of the law suit, which is estimated to be completed within the first quarter of 2015.

The insider transfer amount sought is $4,500,000.

PROFESSIONAL FEES - OUTSTANDING ORDERS:

  • Docket #474 - Transperfect Legal Solutions ($4,000.00)
  • Docket #370 - Fox Rothschild (Balance Due $271,561.94)