SC bankruptcy officials want to know if cotton ginning collapse was fraudulent | Business

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Bankruptcy court officials have asked a judge for permission to hire an expert to determine whether the financial collapse of a historic cotton ginning mill in Davis Station was the result of fraud or a other wrongdoing, according to documents filed this week.

The U.S. Trustee’s Office wants the Examiner to review Rickenbaker Gin’s financial records for the period from 2018 to September 1 of this year, when the company sought legal protection from its creditors.

Financial statements show that the agribusiness has assets of around $ 2.1 million against debts totaling over $ 8.1 million. Liabilities include around $ 6.5 million that gin did not pay farmers for their crops, despite earning nearly $ 35 million for the period and paying owner Burt Rickenbaker an annual salary. of $ 115,000.

The SC Agriculture Ministry compensated farmers from two funds set up to cover crop losses. The state agency now wants to recover this money from the owner of the gin.

The examiner will determine whether the debts disclosed to file bankruptcy online declarations “or any other outstanding obligations of the debtor were caused by embezzlement, fraud or dishonesty” and whether legal action can be taken.

The state’s Law Enforcement Division is also conducting a criminal investigation into the missing money.

Among the issues that the trustee’s office wishes to investigate are numerous undocumented loans that the owner of Burt Rickenbaker gin has received from Santee Leasing and its owner, James “JC” Black, whom Rickenbaker has called a friend who ‘he has known since he was a teenager. Rickenbaker said under oath last week that he had borrowed money to help with his business’s cash flow, although there was no written agreement outlining the purpose of the loans.

Rickenbaker said his wife also loaned $ 80,000 for the gin operations, although this loan is also not documented. Financial documents filed with the court indicated that the company paid her back in December.

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“The events that led to the debtor’s financial demise raise several unanswered questions about, for the most part, how the debtor suffered such large losses that made him unable to reimburse the farmers for the crops he sold. on their behalf, “said the trustee. the office wrote in its request for review. “These questions deserve an answer.”

A hearing on hiring an examiner is scheduled for Nov. 4 in Charleston. If approved, the reviewer would be paid $ 50,000 to prepare a report that would be made public by January 24, unless an extension was granted.

The 76-year-old gin was founded by Rickenbaker’s father upon his return to South Carolina after World War II. The SC legislature recognized the company in a 2003 resolution for its “commitment to the cotton industry in Clarendon County”.

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Contact David Wren at 843-937-5550 or on Twitter at @David_Wren_

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