Bankrupt AmeriServe Sues Ex-CEODAVID KOENIG , Associated Press
May. 17, 2000 12:41 PM ET
DALLAS (AP) _ Troubled restaurant supplier AmeriServe Food Distribution Inc. has filed a lawsuit against its founder and former chief executive, claiming he improperly pulled tens of millions of dollars out of the company before it filed for bankruptcy in January.
AmeriServe charged that John Holten wrongfully diverted funds from the company into other companies under his control under the guise of expense reimbursements, management fees and other transactions.
The transfers had ``no legitimate business purpose'' and left the company short of money to meet its obligations, the company charged in its lawsuit filed late Tuesday in Wilmington, Del. The company asked for the return of the money and unspecified punitive damages.
Holten's lawyer denied any wrongdoing and called the lawsuit a typical tactic in bankruptcy cases.
``In a bankruptcy proceeding, where there is ever a transfer of money, lawsuits are filed ... creditors are trying to maximize their return,'' said Robert Burrick, a New York bankruptcy lawyer. ``We can justify the payments.''
Burrick said Holten's companies, principally closely held Holberg Industries Inc. of Greenwich, Conn., maintained financing for AmeriServe.
David Margulies, a spokesman for the Addison-based distributor, said Wednesday the amount of money involved is ``substantial,'' but that AmeriServe wasn't alleging that the transfers alone forced the bankruptcy filing.
Margulies said chief executive Ronald Rittenmeyer asked the company's outside lawyers several weeks ago to look into pre-bankruptcy transactions.
``There have been questions about these transactions from various people certainly ever since the bankruptcy filing,'' Margulies said.
Holten resigned as chief executive after the bankruptcy filing but remains chairman. Margulies said Holten has not been asked to resign as chairman and hasn't offered to resign.
In a related matter, investors who bought AmeriServe bonds have asked the U.S. Bankruptcy Court in Wilmington for help in investigating a $200 million bond offering in September underwritten by Donaldson, Lufkin & Jenrette Inc.
Holten's lawyer denied that Holten misled investors about the company's liquidity. Burrick said Holten and Holberg Industries put $30 million into the company in early December, along with $100 million from DLJ and $15 million from a major customer, Tricon Global Restaurants Inc. of Louisville, Ky.
AmeriServe, once a $6 billion company, has lost more than one-third of its restaurant business, including accounts with Burger King and Chick-fil-A, in recent weeks and has said it will lay off 1,400 to 1,600 of its roughly 6,000 employees.