Tuesday, June 7, 2022, 7:55 pm News Flash Archive

The federal bankruptcy court has granted the bankruptcy examiner Albert Altro's request for access to the documents seized by the FBI during its raids on bankrupt Express Grain and its bankrupt president, John Coleman.

The order, which was handed down today, gives insight into the subject areas that the examiner wishes to investigate, as well as the court's concern that the expense of the investigation not get out of hand.

The court approved the examiner's access to records regarding the management team at EG, it's IT department, and John Coleman's personal cryptocurrency accounts if they exist, among many other categories of records.

The examiner had sought clarification of the order appointing him to investigate Mr. Coleman's bankruptcy, so that the FBI and the United States Attorney would permit him to inspect and copy from the voluminous records that they seized in their early morning raid on Coleman's home and Express Grain's offices on February 24, 2022. See our reporting here: Examiner in John Coleman's personal bankruptcy case seeks documents seized by the FBI

The FBI and state investigators seized over 100 boxes of documents, as well as several computers from the home and offices.

Express Grain attorney Craig Geno filed a response in which he claimed that Mr. Altro's request might cost too much money, and might not lead to any useful information. See our reporting here: FBI seized over 100 boxes of documents from Express Grain during raid

The court held a hearing on the matter on May 17, 2022, and a follow up status conference on June 3.

The court decided to grant Mr. Altro's request in part, describing the categories of documents he can delve into:

Documents seized from Express Grain Terminals, LLC:

For the period January 1, 2018 - September 29, 2021

Detailed general ledger of Express Grain Terminals, LLC's cash disbursements;

Payroll records pertaining to all members of John Coleman's family employed by and/or compensated by Express Grain Terminals, LLC;

Payroll records for all personnel on the executive team of and/or in management at Express Grain Terminals, LLC;

Payroll records for all personnel in the IT Department of Express Grain Terminals, LLC;

Detailed records, including check registers, of disbursements to all vendors and consultants, to include independent contractors, providing services to Express Grain Terminals, LLC;

Engagement letters for all consultants (including independent contractors) providing services to Express Grain Terminals, LLC;

Organizational structure, including names of personnel, of Express Grain Terminals, LLC's IT Department;

Organizational structure, including names of personnel, of Express Grain Terminals, LLC's Accounting Group/Department, including but not limited to personnel with position titles including Accounting Manager, Supervisor, Finance Director, Controller, Vice President, and Chief Financial Officer; and

Organizational structure, including names of personnel, of Express Grain Terminals, LLC's Finance Group/Department, including but not limited to personnel with position titles including Finance Director, Budget Manager, Director of Financial Planning & Analysis, and Analyst.

The court also permitted Altro access to additional documents:

Documents seized from John Coleman:

For the period January 1, 2018 - September 29, 2021

Monthly bank statements for the Regions Bank checking account listed on line 17.1 of John Coleman's bankruptcy schedules;

All monthly credit card statements for both open and closed accounts created by or on behalf of, or maintained by or on behalf of, John Coleman;

All financial statements for Big Sand Properties, LLC (if none exist for the time period above, then the most recent financial statements available for Big Sand Properties, LLC);

Detailed general ledger for Big Sand Properties, LLC in Excel format (if no ledger exists for the time period above, then a detailed general ledger for Big Sand Properties, LLC representing the company's last full year of activity);

Monthly bank statements for Big Sand Properties, LLC (if none exist for the time period above, then the last full year of monthly bank statements for Big Sand Properties, LLC);

Financial statements for Connected Medical Systems, LLC (if none exist for the time period above, then the most recent available set of Connected Medical Systems, LLC's financial statements);

Detailed general ledger for Connected Medical Systems, LLC in Excel format (if no ledger exists for the time period above, then a detailed general ledger for Connected Medical Systems, LLC representing the company's last full year of activity;

Monthly bank statements for Connected Medical Systems, LLC (if none exist for the time period above, then the last full year of monthly bank statements for Connected Medical Systems, LLC);

Detailed list of all cryptocurrency accounts, wallets, and/or brokerage accounts representing an interest in cryptocurrency owned by John Coleman, whether open or closed; and

Statements for any and all cryptocurrency accounts, wallets, and/or brokerage accounts representing an interest owned by John Coleman, whether open or closed.

But the court intends to keep a tight reign on the examination of the voluminous documents:

It is unknown to the Court, the parties, and the parties' respective counsel the condition or organization status of the documents and records seized by and in the possession of at least one of the named government agencies. Therefore, it is ORDERED that the Examiner shall determine the exact location of the records and advise this Court and the Debtor's counsel of the date and time he intends to begin his review.

The court is requiring Altro to perform a first-pass overview of the documents to ascertain how long his full review might take, depending on how the documents are organized:

It is further ORDERED that the Examiner shall, upon beginning his initial inspection of the documents and records in possession of the governmental agency or agencies, assess the general nature, scope, and condition of the records, to include, but not limited to, the manner in which the documents are stored, labeled, filed, and categorized and the number or volume of the documents being reviewed. The Examiner shall, within a reasonable window of time not to exceed four (4) hours from beginning his initial inspection, determine, to the best of his ability, the estimated time it will take him to search and review the records and shall advise the Court and the Debtor's counsel of his assessment as to the state of the records and the time estimate for his search and review. While this type of micromanagement is not, ordinarily, this Court's function, the unknown state of the records, from a time and cost methodology and framework, inherently concerns this Court and all interested parties. Therefore, the Court is of the opinion that the procedures as set forth in this Order are necessary to prevent the bankruptcy estate from incurring inordinate and prohibitive expense.

The court's order may be seen here: Order Clarifying Examiner's Appointment

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To read all our coverage of the Express Grain bankruptcy case, see here: Index of Express Grain articles

 

John Pittman Hey
The Taxpayers Channel

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