Newspaper article THE JOURNAL RECORD

Alliance Files Bankruptcy after State Freezes Assets

Newspaper article THE JOURNAL RECORD

Alliance Files Bankruptcy after State Freezes Assets

Article excerpt

Alliance Temporary Services Inc. filed for bankruptcy protection in Oklahoma City Wednesday after its checkbook was confiscated by state regulators.

A temporary restraining order, freezing Alliance's assets, was granted to the Oklahoma Attorney General, Insurance Commissioner and Labor Commissioner, who accused the temporary personnel service of violating the state Consumer Protection Act two weeks ago.

Oklahoma County District Court Judge Eugene Mathews, who granted the order, later allowed a court-appointed official to pay employees and workers compensation claims.

A day before the Oklahoma regulators filed the lawsuit, the Texas Attorney General's office and State Board of Insurance also sued Alliance and froze its assets.

Alliance's president, Gary Newsom, issued a statement Wednesday saying it and its affiliate, Southwestern Temporary Services Inc., had filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code because of what Newsom claimed was "unwarranted state interference."

Newsom is also listed as a defendant in the state regulators' lawsuit against Alliance.

"This filing for reorganization is not due to a cash flow problem within (Alliance), but is instead due to the states' freezing of (Alliance's) assets and the resulting inability of (Alliance) to service its customers," Newsom said. "It is (Alliance's) intention to honor all financial obligations."

The statement reiterates an advertisement Alliance ran Sunday in The Daily Oklahoman newspaper trying to assure employees and clients of its continued viability.

The company contacts employers and tells them it can lower their workers compensation insurance costs by hiring their employees and leasing those people back to the employer. …

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