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Executive Forum - ECG update

March 10 2008

When Axium International Inc., owner of Ensemble Chimes Global, filed for bankruptcy in January it owed $42 million to staffing firms. Right now it's unclear whether any of that money will be recovered and the process could take years. At the Staffing Industry Executive Forum on Friday, bankruptcy trustee Howard Ehrenberg gave an update on the case.

Ehrenberg said an investigation of the principals of Axium has begun, and questions are being asked of Axium's auditor as to why it didn't uncover the problems. He also said that an insurance policy was discovered that might provide funds. Meanwhile, there is going to be an investigation into whether or not GoldenTree Asset Management's actions were proper. GoldenTree, Axium's lender, swept the company's bank account just prior to Axium filing for bankruptcy.

According to a lawsuit against Axium's owners by GoldenTree, they lived a lavish lifestyle, paying $462,000 a year to lease luxury cars such as a Rolls Royce and Maserati, received weekly payment of $8,000 in cash delivered by armored car in addition to their salaries, and hired  a "model and actress" on the company's tab.

MPS Group Inc. (NYSE: MPS), which owns the Beeline vendor management system, later bought the Ensemble Chimes Global assets at a bankruptcy auction.

Joining Ehrenberg on the VMS panel were David Cooper, principal of Beeline; Chris Hartman, president of Allegis Group Services Inc.; Jai Shekhawat, CEO and co-founder of Fieldglass Inc.; and Jim Lanzalotto, VP of strategy and marketing at Yoh Group.

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