JUDGE IN REVSTONE CASE ORDERS RECEIVERSHIP; COMPANY DECLARES BANKRUPTCY
An AmericanSwindlers.com Exclusive – December 4, 2012
(Update: December 4, 3:30 p.m.) – A review of the recently obtained REVSTONE INDUSTRIES bankruptcy filing in the U.S. Bankruptcy Court for the District of Delaware provides new insights into Kentucky businessman George Hofmeister’s financial dealings. A few important points from the document:
1. Despite trading on the REVSTONE name, the company itself is 100% controlled by Hofmeister’s ASCALON ENTERPRISES through a circuitous arrangement whereby the ‘managing members’ of REVSTONE INDUSTRIES LLC are actually trust entities for the benefit of Hofmeister’s children, and those trusts in turn have assigned their managing authority to ASCALON. The trusts in question are The MEGAN G. HOFMEISTER Irrevocable Trust, The SCOTT R. HOFMEISTER Irrevocable Trust, and The JAMIE S. HOFMEISTER Irrevocable Trust.
2. REVSTONE indicates its total number of creditors to be between 100 – 199. Its largest single creditor is BOSTON FINANCE GROUP at $33.2 million, followed by SCHOELLER ARCA SYSTEMS at $10 million, JMP INDUSTRIES at $8 million, JEFFREY OWENS & PALM MARKETING at $3.2 million, DEXTER FOUNDRY at $1.8 million, Patrick O’Mara at $1.4 million, THULE HOLDINGS and THULE TOWING SYSTEMS at $1 million. Another 13 creditors are listed with debts outstanding under $1 million.
3. REVSTONE’S estimated liabilities appear to total between $75 – $100 million based on the amount of debt held by its top 20 creditors.
4. REVSTONE’S estimated assets are stated to be between $10 – $50 million.
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(Original December 4 Story) – In a courtroom located in tiny Sutton’s Bay Michigan, a Circuit Court Judge on Monday ordered that many companies controlled by Kentucky businessman George S. Hofmeister be placed under the control of a court-appointed receiver, following the continued failure of Hofmeister’s REVSTONE INDUSTRIES and its affiliated companies to make payment on an outstanding loan by Clearwater, Florida specialty lender BOSTON FINANCE GROUP.
Readers of AmericanSwindlers.com will recall that earlier this year a judgment was entered against REVSTONE in favor of BOSTON FINANCE GROUP, with REVSTONE being ordered to satisfy an outstanding loan estimated to be approximately $27 million. When REVSTONE failed to pay, BOSTON FINANCE GROUP sought a court appointed receiver to take control of the liable REVSTONE companies, thus ensuring new financial management that would take actions to satisfy the outstanding liability. On October 22, 2012, the judge agreed to give REVSTONE a six week delay before appointing a receiver, setting December 3, 2012 as the new hearing date on the motion. The REVSTONE companies subject to the receivership motion include REVSTONE INDUSTRIES, REVSTONE TRANSPORTATION, REVSTONE TOOL & ENGINEERING, POWER-TEC MANUFACTURING, U.S. TOOL & ENGINEERING, SALEEN, CONTECH FORGINGS, and SPARA.
In an exclusive interview with a Revstone company senior manager, AmericanSwindlers.com has learned that what transpired in the courtroom earlier yesterday on the receivership hearing was nothing short of jaw-dropping. Hofmeister appeared personally in the courtroom alongside his attorneys, along with representatives of BOSTON FINANCE GROUP and its attorneys. Additional parties in attendance included the U.S. Department of Labor, which has a pending litigation against Hofmeister for alleged misuse of pension funds at REVSTONE-owned METAVATION, as well as representatives from the major American automakers and supply chain vendors who are customers of some of the REVSTONE companies .
A fuller report will be forthcoming as details are confirmed, but from yesterday’s interview AmericanSwindlers.com can report that REVSTONE offered to satisfy a portion of the outstanding judgment held by BOSTON FINANCE GROUP by providing $7.4 million yesterday in return for clearing the portion of the debt assigned to REVSTONE TRANSPORTATION. BOSTON FINANCE GROUP argued that the remitted funds could only be placed against portions of the debt agreed to by the lender, but the judge ultimately ruled that should payment actually be made the funds could be directed by the borrower to satisfy the portion of the debt held by REVSTONE TRANSPORTATION.
Notwithstanding this attempt by REVSTONE to partially satisfy the judgment, the judge moved to the full receivership hearing, allowing interested parties to express their support or opposition to such a move. BOSTON FINANCE GROUP is said to have offered a recommended candidate to be appointed as the receiver and to have presented the judge with information that they believe reflected financial mischief and mismanagement within Hofmeister’s companies. BOSTON FINANCE GROUP’s attorneys cited among other things the failure to pay medical claims for its employees, the suspect movement of funds throughout the REVSTONE organization, the failure of REVSTONE to supply information and payment of Hofmeister’s American Express bill while other obligations went unpaid. REVSTONE opposed the receivership move altogether.
Auto manufacturers in attendance and other original equipment manufacturers expressed their concern about management at REVSTONE and indicated no opposition to the receivership. In fact, while a few expressed neither support nor opposition to the receivership, they indicated full support for the individual proposed by BOSTON FINANCE GROUP.
As anticipation built, a representative from the U.S. Department of Labor asked to be heard. The message from the feds was crystal clear. The U.S. Department of Labor told the judge they could not comment on the merits of a receivership, but that without equivocation the Labor Department recommended that Hofmeister and his closest managers be removed from having any control of certain pension funds within the REVSTONE companies.
With that the judge ordered a receiver be appointed to take control of Hofmeister’s REVSTONE companies, giving parties until 5:00 p.m. on December 4 to have the appropriate paperwork implemented. Attorneys for the Kentucky based REVSTONE then immediately announced that the company would instead file for bankruptcy.
Late in the day on Monday, both REVSTONE INDUSTRIES and SPARA filed separate voluntary petitions for Chapter 11 Bankruptcy in the United States Bankruptcy Court, District of Delaware. AmericanSwindlers.com has obtained copies of REVSTONE court filing and it is now available on this site.
AmericanSwindlers.com is following Monday’s developments very closely and will report back regularly as news breaks.