2/10 UPDATE - JOHN FOX DECLARES PERSONAL BANKRUPTCY
John Fox has filed for Chapter 7 Personal Bankruptcy. His Form 101 lists $0-$50,000 in assets and $50-100 Million in liabilities. Judge William Lafferty (already presiding over the PC Bankrupcy) has been assigned to the case.
On quick read, the creditor list seems the same as for the company. Perhaps he guaranteed his oblations personally? As for the money, seems like offshore is a good bet. It did not go into business losses. It must be sitting somewhere. Hopefully we will find out.
This is obviously a ploy by John Fox to make it more difficult for the people PC hosed to come after him personally. At the same time, the FBI is now officially involved in digging out the details of the fraud.
Which brings up a good point. Even used those things are worth more than $50k (many going for near $100k with the right options, Z07 etc.), so either his dealership/leasing company should be listed as a creditor or he has more than $50k in assets.
Well Klapp have many irrational features, among them alienating friendly coberserkers.
But he predicted this, and some admin should beg him to post again, because he was maybe not exposed, but he was right in whatever he said to the guy outside the credit officer and others, who were defending Fox/PC beyond belief
What would be the point of operating a business that loses $70 million over a period of many years unless you were taking the money out for yourself? Companies that lose lots of money generally once made money, hope to make money one day, or both. If PCâs business model was simply to lose money selling wines for 50% of cost, where would be the upside? However this is ultimately explained, there will be little doubt in my mind that Mr. Fox and his compatriots have a nice stash somewhere. Hopefully it gets located, but I am not betting on it. And not a $70 million stash, but a sizable one.
This has been discussed very early on. You give PC your money for âfuturesâ, then they have a free loan to use as they wish (invest) for 2 to 5 years as they keep putting you off with stories of containers on sunken ships and warehouses in Beaune.
The key to that strategy is that their investments have to pay off, and we all know what the market has been like since 2008. When you boil it down to that simple of an explanation it isnât hard to see why things changed for PC after making good on those âfuturesâ for so long.
But that does not cause losses like they have, unless the âinvestmentsâ they make turn bad. But that is the same as stealing your money, just using it for land or gold or whatever. Running a business for free float is one thing, and it makes more sense (not legitimacy, but economic sense) in a high interest rate environment, when the cost of the float is high. We have been in anything but that. But if you run a business for the float, eventually you are supposed to make money or at least break even. If you fall behind by $70 million, something is up. There are people who blame the lawsuits for triggering the demise of PC, but that is foolish. If the Hong Kong and other guys did not start the suits, others would have. PCâs backlog mounted. Guys like me ($30,000) were going to start agitating for money back pretty soon without deliveries. And I was not going to accept lesser merchandise. I would have gone to the credit card bank much the same way I am doing now. Only advantage I might have had was that of first mover, before others got wise. PC was a house of cards near toppling. And I remain convinced there is buried treasure somewhere. Free float was nice, but it does not explain being $70 million in the hole - openly late deliveries. And you donât lose $70 million selling items below cost for the float - just not enough float to justify.
What John Fox is doing is trying to avoid any potential liability for fraud or other intentional tort liability. The effect of filing the personal bankruptcy is that unless creditors or the Trustee bring a separate action within the bankruptcy proceedings to have certain debts declared non-dischargeable (meaning that the bankruptcy filing does not eliminate them as personal liabilities for Fox), then the debts will permanently discharged. This is exactly what I expected would happen. I was actually surprised that the personal bankruptcy wasnât filed simultaneously with the corporate bankruptcy. I think itâs only a matter of time until Hector Ortega does the same.
The deadline to file non-dischargeability actions will be cited in the Notice to Creditors of the bankruptcy. It sounds like Fox named all of the creditors of Premier Cru as his own creditors as well, in anticipation that everyone would charge him with either fraud or some other personal participation in tortious activity committed by Premier Cru.
If youâre someone who lost significant funds from Premier Cru, and were contemplating going after John Fox directly for the losses, this is something youâre going to want to closely monitor and talk to a bankruptcy lawyer about.
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