The trustee overseeing the dismantling of former LeNature's Inc. in Latrobe filed two dozen lawsuits in U.S. Bankruptcy Court to recover more than $4 million in payments the company made while it was insolvent.
The lawsuits are the first in a spate of legal actions expected this week against individuals, accounting firms and financial institutions alleged to be involved in the 2006 collapse of the bottling and beverage company whose former executives are the subject of a federal criminal investigation.
Trustee Marc Kirschner has until Friday -- when the two-year statute of limitations expires -- to file legal actions to recover money and other assets.
LeNature's Inc. was forced into bankruptcy on Nov. 1, 2006. The bankruptcy ended earlier this year with the appointment of Kirschner in July. He was authorized to investigate allegations of fraud and mismanagement and to pursue claims to recover money for creditors who are owed hundreds of millions of dollars.
In his lawsuits, he alleges that LeNature's officials made payments to some companies while teetering on the brink of bankruptcy. The actions seek to void these "preferential transfers" and recover the money so it can be distributed to creditors.
Among the largest recoveries sought is more than $1.1 million paid to Owens-Illinois Inc., which makes glass bottles and containers. The other companies sued include equipment makers, packaging companies and a temporary employment company, according to the filings.
The financial collapse of LeNature's triggered a federal grand jury investigation by the U.S. Attorney in Pittsburgh, U.S. postal inspectors and criminal agents from the IRS into money laundering, bank, wire and mail fraud, according to court records.
The grand jury has been hearing testimony, and one former employee has pleaded guilty and is cooperating with prosecutors.
LeNature's executives borrowed millions of dollars based on allegedly fraudulent financial records that made the company appear to be thriving and profitable. The alleged fraud unraveled in mid-2006 when investors began to question the management of CEO Gregory Podlucky, and the company was the subject of lawsuits by investors.
In a related matter, a lawsuit filed in Los Angeles in May against Wachovia Capital Markets and the accounting firms of Ernst & Young and BDO Seidman was transferred earlier this month to U.S. District Court in Pittsburgh.
A group of 75 plaintiffs, led by CalPERS -- the California Public Employees Retirement System -- are alleging the firms misled investors and auditors about missing and bogus financial records. Other plaintiffs include union pension and retirement funds.
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