Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
TelexFREE LLC, an international telecommunications and multi-level marketing company headquartered in Marlborough, Mass., filed for protection under Chapter 11 of the bankruptcy law on April 14, according to Wicked Local Winchester. The company recently had its operations shut down in Brazil, and is under investigation by the Massachusetts Secretary of State William Galvin.
Brazilian authorities have alleged that the company appears to be a pyramid scheme. A representative for Secretary Galvin has said that the office is looking into TelexFREE because of its similarity to another multi-level marketing company that the state shut down in November.
The company announced that it has sufficient cash on hand to support its business throughout the reorganization process. TelexFREE said that it has conducted a review of its operations in connection with the Chapter 11 filing, and had determined that an adjustment is needed to capitalize on the demand for its voice over Internet product, rationalize its promotional expenses and ensure that its sales programs are compliant with legal requirements.
“We anticipate that our global operations will continue to provide our customers with the high-quality products and services they have come to expect,” said TelexFREE’s interim Chief Executive Officer Stuart MacMillan. “We are taking this major step because we continue to believe in our business, our products and the enthusiasm of our world-class team. We believe that this restructuring plan, which will include significant enhancements to our governance practices and internal controls, will help us to build a stronger and more sustainable financial and operational foundation for the future.”
In response to the company’s filing, federal agents from the FBI and Homeland Security raided its Marlborough headquarters this week, according to the Boston Globe. Securities regulators in Massachusetts filed a civil lawsuit against TelexFREE the next day, accusing it of a $90 million fraud in the Commonwealth and $1 billion worldwide.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
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
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
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.