A bankruptcy court judge has given creditors of Foss Manufacturing permission to investigate allegations that former chief executive officer Steven Foss used company money for personal reasons, according to a report published by The Portsmouth Herald News. Mr. Foss has denied wrong-doing and said his name would be cleared if a civil suit is filed against him.
The creditors group said its preliminary investigation shows Mr. Foss was using company money for personal reasons, such as home improvements and club memberships. The group also said he used the company’s private jet. More than $180,000 in company funds were allegedly used for improvements to the home of Mr. Foss’s daughter. In the year prior to bankruptcy, the company also made more than $150,000 in payments on American Express cards to Mr. Foss, his daughter and his former chief financial officer, Kevin Sexton, the group said.
They also alleged that a company-owned house currently is home to the Foss family’s housekeeper.
Foss Manufacturing filed for bankruptcy in September after its chief lender, CapitalSource Finance, cut off credit, alleging that the company fraudulently borrowed millions of dollars to benefit itself and company insiders.
The Hampton, NH-based company with 375 employees manufactures non-woven fabrics and synthetic fibers. Currently, the trustee hired to run Foss Manufacturing during its bankruptcy is looking for potential buyers of the company.