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Most staffing buyers who were customers of vendor management system firm Ensemble Chimes Global are not making good on their unpaid fees and staffing firms could be stuck with the bills, bankruptcy trustee Howard Ehrenberg said Friday. The bankruptcy court is requiring customers to pay management fees owed ECG that had not been paid through the close of its sale to MPS Group Inc.'s (NYSE: MPS) Beeline on Feb. 8. The total amount is in the range of $5 million.
ECG filed for bankruptcy in January, shortly after its parent company, Axium International Inc.
Beeline turned over monies it has collected to the court and some customers have paid directly, but that represents only a fraction of the money owed, Ehrenberg said. While trying to be patient, enough time has passed that he will have to start making demands, he said. Although he doesn't want to collect from staffing firms, the court has ordered that the fees be collected, Ehrenberg said.
Meanwhile, Aug. 15 has been set as the deadline for filing proof claims by creditors. Ehrenberg said he expects somewhere between 3,000 and 5,000 creditors in this case. The deadline was set just prior to a creditors meeting on May 13 where Axium's former owners John Visconti and Ronald Garber, appeared but refused to answer questions regarding the bankruptcy, Ehrenberg said.
The case is now in recovery phase. Ehrenberg said he's pursuing insurance policies held by Axium, has hired lawyers to investigate GoldenTree Asset Management's sweep of Axium's bank accounts, and is pursuing Axium's auditors for negligence. GoldenTree was a lender to Axium and swept the company's bank accounts just prior to the bankruptcy filing. In addition, concerns over the auditors arose about the amount of unpaid payroll taxes. Axium owed $80 million in unpaid payroll taxes in addition to $30 million that it paid prior to filing for bankruptcy.