Magazine article Black Enterprise

Historic Black-Owned Firm Suspected of Fraud: Criminal Investigators Eye Terry Manufacturing for Alleged Misappropriation of Funds Following Bankruptcy Filing

Magazine article Black Enterprise

Historic Black-Owned Firm Suspected of Fraud: Criminal Investigators Eye Terry Manufacturing for Alleged Misappropriation of Funds Following Bankruptcy Filing

Article excerpt

Once the darling company of Roanoke, Alabama, Terry Manufacturing Co. Inc. (No. 74 on the BE INDUSTRIAL/SERVICE 100 list with $44.5 million in sales) is now under the scrutiny of bankruptcy lawyers an d criminal investigators for bank fraud and the mishandling of company finances.

The apparel manufacturer is under federal review amid claims that more than $35 million in assets vanished from its books in a two-month period last year. Last summer, the company was forced to fold its operations, resulting from inquiries made by a Chapter 11 bankruptcy trustee, Les Alexander.

Two of Terry Manufacturing's lenders hired Alexander to look into the missing assets, which were supposed to serve as collateral for various loans. Subsequently, Alexander says a police report was filed stating that intruders broke into the manufacturing plant, shredded bank statements, and stole key corporate documents.

Mobile, Alabama, FBI spokesperson Ray Zicarelli didn't comment on the federal case. But Eric J. Breithaupt, a lawyer with Christian & Small L.L.P. in Birmingham, Alabama, who represents the creditor committee in the bankruptcy case, says investigators looking into the fraud allegations have already contacted him. "Terry's records are so awful, [they] don't know what's owed to people," Breithaupt says. "In my 20 years of being in business litigation, I've never seen anything quite like this." The Terrys would not comment on the charges.

The company was started in 1963 by J.A. Terry and his with, Velma, during the tumultuous Civil Bights era in Alabama. The company grew from five sewing machines in a plant made of scrap wood into one of the largest black-owned businesses providing uniforms for clients such as McDonald's Corp. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.