Is U-Save Auto Rental CEO Tom McDonnell Guilty of Bankruptcy Fraud? Recent testimony in U.S. bankruptcy court suggests he may be. It’s a crime punishable by a fine up to $500,000, twenty years in prison… or both.
(UnhappyFranchisee.Com) Thomas McDonnell III is the CEO of Franchise Services of North America (FSNA), a corporation that is in deep trouble.
Our recent post U-SAVE Parent FSNA Bankruptcy Rejected reported that the Chapter 11 bankruptcy filing by Franchise Services of North America (FSNA) was dismissed because the court ruled that FSNA had violated the terms of its own Certificate of Incorporation by filing bankruptcy without the consent of its largest shareholder, Boketo LLC, which is owned by Macquarie Capital.
Unhappy Franchisee has obtained the TRANSCRIPT OF FSNA EVIDENTIARY HEARING ON MOTION TO DISMISS in the matter, which includes testimony by FSNA Chief restructuring Officer Jon Nash of Meadowlark Advisors, and Tobias Bachteler, Managing Director of Macquarie Capital.
Jon Nash is an outside bankruptcy advisor who became Chief Restructuring Officer for FSNA. He testified that FSNA counsel acknowledged that they didn’t have the authority to file bankruptcy but were going to do so anyway. His testimony reads:
(ATTY MADDUX) Q And just as — just as they didn’t say, “And, by the way, there might be a little wrinkle here because the 49.76 percent owner of the company is unlikely to consent, and we’re not going to give them that opportunity.” They didn’t say that, right?
(NASH) A They did say that — yeah, actually they did say that.
Evidentiary hearing testimony of Tobias Bachteler, Managing Director of Macquarie Capital, suggests that Tom McDonnell, CEO of U-Save Auto Rental and its franchisor parent, Franchise Services of North America (FSNA), may have committed bankruptcy fraud.
BY MR. MARINO:
Q Mr. Bachteler, I ask you to take a look at the — at Exhibit 11, voluntary petition for non-individuals filing for bankruptcy, do you see that?
A Yes, I do.
Q Okay. I direct your attention to Page 4.
Q Do you see the warning there?
Q And what is the first sentence of that warning?
A It says “Warning: Bankruptcy fraud is a serious crime, making a false statement in connection with a bankruptcy case can result in fines up to $500,000 or imprisonment for up to 20 years, or both.”
Q And this was a document that was executed on June 26th, 2017, correct?
Q And you see that it’s signed by Thomas P. McDonnell the Third, yes?
Q Did Boketo and Macquarie understand Exhibit 11 to constitute a sworn representation by Mr. McDonnell that, in fact, he had achieved or secured all of the authorization he needed to file this bankruptcy petition?
A It did.
Q Do you have any doubt whatsoever that that was a false statement?
A I don’t have any doubt.
Tom McDonnell Declared – Under Penalty of Perjury –That He Had Authority. He Didn’t.
Here is the declaration made by Tom McDonnell that he had authority to petition for Chapter 11 bankruptcy – under penalty of perjury and subject to a potential $500,000 fine and up to 20 years in prison.
Sources tell us that McDonnell may have committed the fraud in order to put the company into bankruptcy in an attempt to buy it back himself out of the bankruptcy sale.
We welcome other opinions, viewpoints or rebuttals.
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TAGS: FSNA, Boketo, LLC, Macquarie Capital, U-Save bankruptcy, Franchise Services of North America bankruptcy, FSNA bankruptcy, U-Save franchise complaints, U-Save, U-Save franchise, U-Save complaints, U-Save Car and Truck Rental, U-Save Car and Truck Rental franchise, Tom McDonnell, Thomas McDonnell III, Michael John Silverton, Daniel Raymond Boland, U-Save Holdings Inc., Franchise Services of North America Inc., FSNA, Boketo, LLC, Macquarie Capital Inc.