Business Observer’s Lee County Editor Jean Gruss recently learned that there is a law that allows businesses filing for bankruptcy to ask companies it did business with to give back money that was earned in good faith. That is essentially what TOUSA, parent company of Engle Homes, did several years ago under federal “preference” laws. And one of the companies they wanted their “refund” to come from? Spiro & Associates Marketing, Advertising, Public Relations & Brand Architecture.
While Engle Homes was going down in what would become one of the biggest and most expensive bankruptcies in South Florida history, it nearly took our Agency with it by using a rule that allows bankrupt firms to “claw back” payments made 90 days before filing.
Fort Myers bankruptcy attorney Richard Johnston says the idea behind the claw back is that all creditors must be treated equally. So if a creditor got more than he or she would have gotten through the bankruptcy process, the amount exceeding that should be redistributed among all the creditors.
More than 1,000 Florida companies provided services or products for TOUSA and its affiliates in the 90 days that lead up to the bankruptcy filing.