Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Corporate Resource Services Inc Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: September 22, 2015
Key Contacts
Back
Corporate Resource Services, Inc., one of the largest staffing firms in the U.S., has filed for Chapter 11 bankruptcy protection. According to Reuters, the company’s decision to seek bankruptcy protection followed the discovery of approximately $80 million in unpaid taxes.
Corporate Resource Services debt accumulates
The company has been engaged in an orderly wind down since February by downsizing its personnel, collecting receivables and liquidating assets. Currently, the firm lists its total liabilities between $50 million to $100 million.
In the bankruptcy petition, the company claimed that one of its seven subsidiaries, TS Employment Inc., failed to remit more than $80 million in taxes to the IRS, mostly related to employee withholding taxes. CSR claimed that the timing of the discovery was a worst case scenario, as the company was on the verge of finalizing a funding deal with Wells Fargo loans. As a result, the company’s attempts to negotiate a lending agreement and a debt refinancing deal with Wells Fargo were negated, although CSR did reach an agreement with Wells Fargo to finance a wind down of its business for a limited period. Also, as part of this agreement, TS Employment Inc. then filed for Chapter 11.
Corporate Resource Services restructuring plan
The company received approval from U.S. Bankruptcy Judge Mary F. Walrath for the deal with its prepetition lender Wells Fargo NA. As part of this deal, CSR has short-term access to cash throughout the orderly wind down process involved in the Chapter 11 restructuring plan. The Judge also issued her approval of a slate of first-day pleadings, which include a short-term motion that enables CSR to finance the case with cash collateral for up to two weeks.
Currently, the company’s wind-down has generated $60 million, representing the outstanding principal and interest obligations on the debtors’ loans. However, the company has continued to monitor its cash closely for all seven subsidiaries to prevent future indemnity obligations and overdrafts.
It is worth noting that CSR disputes Wells Fargo’s claims and has reserved all rights against Wells Fargo for its prepetition actions. TS Employment has also asserted a claim against CSR’s $60 million, which the company has disputed by arguing that TSE destroyed its value.
The future of Corporate Resource Services
As stated in the agreement with Wells Fargo, the financial institution will provide financing to CSR for an “interim interim period” where the two parties will negotiate a long-term deal.
With the reorganization period, CSR hopes to buy time in order to continue the process of liquidating its assets. This sales process will include finding appropriate buyers for the company’s receivables.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
- Practices: Bankruptcy & Creditors' Rights
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Corporate Resource Services Inc Files for Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Corporate Resource Services, Inc., one of the largest staffing firms in the U.S., has filed for Chapter 11 bankruptcy protection. According to Reuters, the company’s decision to seek bankruptcy protection followed the discovery of approximately $80 million in unpaid taxes.
Corporate Resource Services debt accumulates
The company has been engaged in an orderly wind down since February by downsizing its personnel, collecting receivables and liquidating assets. Currently, the firm lists its total liabilities between $50 million to $100 million.
In the bankruptcy petition, the company claimed that one of its seven subsidiaries, TS Employment Inc., failed to remit more than $80 million in taxes to the IRS, mostly related to employee withholding taxes. CSR claimed that the timing of the discovery was a worst case scenario, as the company was on the verge of finalizing a funding deal with Wells Fargo loans. As a result, the company’s attempts to negotiate a lending agreement and a debt refinancing deal with Wells Fargo were negated, although CSR did reach an agreement with Wells Fargo to finance a wind down of its business for a limited period. Also, as part of this agreement, TS Employment Inc. then filed for Chapter 11.
Corporate Resource Services restructuring plan
The company received approval from U.S. Bankruptcy Judge Mary F. Walrath for the deal with its prepetition lender Wells Fargo NA. As part of this deal, CSR has short-term access to cash throughout the orderly wind down process involved in the Chapter 11 restructuring plan. The Judge also issued her approval of a slate of first-day pleadings, which include a short-term motion that enables CSR to finance the case with cash collateral for up to two weeks.
Currently, the company’s wind-down has generated $60 million, representing the outstanding principal and interest obligations on the debtors’ loans. However, the company has continued to monitor its cash closely for all seven subsidiaries to prevent future indemnity obligations and overdrafts.
It is worth noting that CSR disputes Wells Fargo’s claims and has reserved all rights against Wells Fargo for its prepetition actions. TS Employment has also asserted a claim against CSR’s $60 million, which the company has disputed by arguing that TSE destroyed its value.
The future of Corporate Resource Services
As stated in the agreement with Wells Fargo, the financial institution will provide financing to CSR for an “interim interim period” where the two parties will negotiate a long-term deal.
With the reorganization period, CSR hopes to buy time in order to continue the process of liquidating its assets. This sales process will include finding appropriate buyers for the company’s receivables.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.