PRINCETON, N.J., Dec. 18, 2018 /PRNewswire/ -- Princeton Alternative Funding Management LLC (PAFM) today announced that the Bankruptcy Trustee for Debtors Argon Credit LLC and Argon X LLC (Argon), Eugene Crane, filed two complaints against the managers and owners of Argon alleging fraud and breach of fiduciary duties. PAFM asserts one of its funds was defrauded by Argon.
"These filings by Argon's bankruptcy trustee confirm what we've been contending—Argon committed fraud against our company," said PAFM CEO Jack Cook.
In the first complaint filed on December 14, 2018 in the U.S. Bankruptcy Court in Chicago, Argon's trustee Eugene Crane asserts that, "During the course of the Debtors' limited business operations spanning approximately two years, Argon Credit's officers and members of its board of managers repeatedly breached their fiduciary duties of loyalty and care to the Debtors and to the Debtors' creditors by:
(i) scheming to funnel assets away from the Debtors and their creditors,
(ii) transferring assets to insiders;
(iii) double-pledging assets to the Debtors' secured lender and an insider's lender;
(iv) knowingly submitting false or misleading financial information to the Debtors' secured lender, including a false accounts receivable report;
(v) paying themselves exorbitant "commissions" without disclosure to or approval of the Debtors' board of managers,
(vi) using company funds to pay for personal expenses unrelated to the Debtors' business operations; and,
(vii) authorizing the Debtors to enter into purported loans with investors which were really contributions of equity and authorizing equity distributions to those investors at a time when the Debtors were insolvent."
In the second complaint filed against Joseph Canfora's Margon LLC, James Uihlein's Little Owl Argon LLC, Mark Triffler's Triffler Trust, and Barry Edmonson's Cardinal Trust, Crane's complaint contends,
"This action arises out of a series of transactions between Argon Credit and the Defendants by which the Defendants purportedly loaned funds to Argon Credit and Argon Credit made supposed principal and interest payments to the Defendants totaling more than $2.5 million on account of those purported loans. However, Argon Credit and the Defendants also entered into simultaneous subscription agreements by which the Defendants received equity in Argon Credit for no additional consideration and which was commensurate with the amount of their purported loans. In reality, these supposed loans were disguised equity contributions and Argon Credit's principal and interest payments to Defendants were actually equity distributions."
Princeton Alternative Funding Management LLC provides capital for businesses that make consumer loans in the non-prime market.
SOURCE Princeton Alternative Funding Management