For Immediate Release
November 20, 2009
Senior Assistant Attorney General Peter C.L. Roth
Attorney General Michael A. Delaney announced that the Office of the Attorney General has filed Involuntary Petitions for Bankruptcy against Financial Resources Management, Inc. ("FRM") and C L and M, Inc. The Petitions were filed in the United States Bankruptcy Court, District of New Hampshire.
The State's Petitions allege that Scott Farah, the sole shareholder of FRM and Donald Dodge, the sole shareholder of C L and M, have abandoned their respective businesses, located in Meredith, New Hampshire. Individuals claiming to have lost approximately $23 million owed to them by the two companies have contacted the Attorney General's Office since the businesses closed their doors.
The State has learned that money obtained from various investors had been used by the companies for the construction of housing developments and other construction projects, building of single family homes, or renovating existing homes. In addition, individuals who obtained mortgages from FRM, and are ready and willing to make payments on their outstanding mortgages, are unable to determine where to direct their payments. Some investors, who are fearful of losing their investments, have demanded direct payment from homeowners or threatened to take possession of property securing the various loans.
The State's Petition asks the Bankruptcy Court to enter an order directing the United States Trustee to appoint an interim trustee to take over the assets of the two corporations. Attorney General Delaney said "the appointment of an interim trustee is important and necessary where, as has occurred in this case, the businesses have been abandoned and valuable property has been left unsecured."
Attorney General Delaney stated "I have taken this action in order to begin the process of an orderly and lawful dissolution of both FRM and C L and M, Inc. This step is necessary to provide assurance to those who, in good faith, obtained loans from FRM and C L and M, and are looking for a procedure for making future payments. The filing of the bankruptcy petitions," said Delaney, "will also begin the process to establish a system for the orderly distribution of assets to creditors."
New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301