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NWTM: Take Action

The bankruptcy system in Seattle has proven to be disfunctional, and it seems clear to me that bankruptcy fraud has occurred (click the link to see what I mean -- you should only take action if you, too, believe fraud has occurred).

This page outlines ways that you can take action. Pick one, or pick all. Some may only apply to creditors (people owed money by NWTM), while others are available to anyone (such as employees).

In any reporting, you should mention Western District of Washington case 16-11767-CMA (Northwest Territorial Mint).

The simplest 'script' could go something like this:

  • I am a creditor,
  • It looks like Sierra Mint took over many NWTM assets,
  • If so, Sierra Mint may well have caused NWTM to shut down, losing $10M or so of value,
  • The professionals should not get paid until they have investigated this and taken appropriate action
There are many other issues, but this is a very simple one that the court should address.

Report Suspected Bankruptcy Fraud

This can be done in two ways.

[1] Email. The first is to send an email using the Department of Justice website for reporting bankruptcy fraud. You may want to consider pointing out that the local U.S. Trustee's office has suggested that they are not going to pursue this, despite what appears to be clear evidence of a multi-million dollar bankruptcy fraud (I estimate the value of the China business at about $4M in October, 2017 based on Calvert's $12M valuation, the percentage of business that China imports accounted for, and the high profit margin).

[2] Mail/phone. The other way is through the regional U.S. Trustee's office: Gregory M. Garvin, Acting United States Trustee, 700 Stewart Street, Suite 5103, Seattle, WA 98101. (206) 553-2000. While they have said they looked into this and either taken action or not as deemed appropriate given the case and resources of their office, they may be willing to look some more if they realize that creditors aren't going to let obvious fraud go ignored by the office intended to take action.

Email Calvert

Another option is to email Chapter 11 Trustee Mark Calvert, and ask why he is not investigating what you believe to be bankruptcy fraud (only do this, of course, if you are certain that fraud occurred -- see my 'Proof of Fraud' page).

His M.O. is to get you to talk to him on the phone, where he can sweet-talk you, with no record. Think twice before getting on the phone with him.

You can email Mark Calvert at mark@cascadecapitalgroup.com.

Email Northrup

Another option is to email Mark Northrup, the attorney representing the Unsecured Creditors' Committee, and ask why he is not investigating what you believe to be bankruptcy fraud (only do this, of course, if you are certain that fraud occurred -- see my 'Proof of Fraud' page).

You can email Mark Northrup at Mark.Northrup@millernash.com.

Writing to the Court

If you are a creditor, writing to the court is a great option. You can do this fairly easily and inexpensively. The address is:

The Honorable Christopher M. Alston
United States Bankruptcy Court
700 Stewart Street #6301
Seattle, WA 98101

In a letter, you should refer to 16-11767-CMA (Northwest Territorial Mint). It would be helpful to include that you are a creditor and (if you are willing) how much you are owed, for context. It might be best to point out specific issues as to why professionals should not get paid, or better yet, what you feel they need to do in order to get paid. For example, saying that the professionals should be required to address what appears to be clear fraud that occurred, and/or other issues involving Calvert, his attorneys, his company (Cascade Captial), or the UCC attorney. It might be best to stay away from issues involving business judgment (e.g. whether Calvert should have hired or fired people: he is supposed to get paid even if he made poor decisions), and stick to things like incompetence and fraud (feel free to puruse my page about the NWTM bankruptcy or the old news page for ideas).

The idea behind this is that the professionals have billed about $5M, and want to get all of the ~$2M that is sitting in the bank. Should Calvert, his company, and his attorney be paid without addressing obvious bankruptcy fraud? Should the UCC attorney get paid without addressing why he did not attempt to have an audit of Calvert's books and/or remove Calvert, when it appears that the UCC wanted for those actions, and without addressing the fraud? You might want to pick other issues, such as Calvert losing $240,000 by sending a package uninsured, and later shipping $80,000 of cash (yes, green cash!) via UPS, which prohibits cash shipments. Or the terrible accounting job of stored metal returned to customers (see my 'Accounting Nightmare' posts at http://about.ag/NWTMintOld.htm). Or how his accounting is incredibly sloppy (e.g. hand-picking category names each month).

The 'Nuclear' Option: Sue

A Chapter 11 Trustee must have a bond in place, currently set at $4,800,000. According to one bond issuer, the bond "works by covering a claim for fiduciary duty violations by the bankruptcy trustee. These violations may include theft, misappropriation of funds or property, misrepresentation, and so on." Presumably, the $4.8M is like auto insurance: it limits how much the insurance company (or bond issuer in this case) will pay, but is not a maximum that can be recovered.

The attorney for one creditor wrote that he might "seek relief... which may include... a proceeding on the Trustee's bond" (regarding money he was owed after Calvert took over, which ended up getting paid, just very late). One member of the UCC requested that the judge sequester the bond.

Bankruptcy fraud could come and go without anything happening to the bond: someone needs to take action in order for it to be useful. This could potentially cover things ranging from the $240,000 loss that Calvert didn't report to the court to the loss of most of the intangible assets to Sierra Mint (I.E. the NWTM import business, and much of the NWTM store/stock products -- potentially many millions of dollars). I am not an attorney, and have only done limited research. But an attorney (preferably not from Seattle!) should be able to provide details of what might be possible.

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