BANKRUPTCY TRUSTEE IN MARK NOSS/FULL SPECTRUM MANAGEMENT CHAPTER 7 BANKRUPTCY CASE HIRES “COUNSEL FOR THE ESTATE”; NEW DEVELOPMENT IN EXPECTED ADVERSARY PROCEEDING AGAINST NOSS BY INDEPENDENT BANK

“Retain attorney to investigate transfers.”  Federal court filing acknowledges investigation of suspicious cash transfers by Mark Noss to Steven Ingersoll; could leave Noss on the hook for $766,925 Independent Bank loan balance.

Documents filed yesterday in federal bankruptcy court reveal Judge James W. Boyd, United States Bankruptcy Court for Michigan's Western District approved an order assigning legal counsel for the the bankruptcy estate of Full Spectrum Management, LLC.

Kelly Hagan, the Trustee assigned to the Chapter 7 bankruptcy case filed February 19, 2019 by Mark Noss on behalf of his Full Spectrum Management, LLC, received approval from Judge Boyd to employ Beadle Smith, PLC (a Rochester Hills, Michigan law firm) as “counsel for the estate”.

Pro forma yadda yadda maybe, but an estate property record and asset report for Full Spectrum Management, LLC, (also filed yesterday) contains one interesting nugget, highlighted in red below under “Major Activities affecting case closing”.

As you can see above, it appears a formal investigation into the transfer of nearly $400,000 by Mark Noss to convicted felon Steven J. Ingersoll still looms.

On May 7, Noss was ordered to provide Independent Bank with a dirty laundry list of documents related to his 2014 assumption of nearly $1.0 million owed by convicted felon Steven Ingersoll to Traverse City State Bank.

As detailed exclusively on this blog (Part 1, Part 2), Independent Bank, owed $766,925 by Full Spectrum, will likely file an adversary petition in the case—based on “constructive fraud”.

In Chapter 7 cases, the debtor does not have an absolute right to a discharge. 

An objection to the debtor's discharge may be filed by a creditor, by the trustee in the case, or by the U.S. trustee. 

Creditors receive a notice shortly after the case is filed that sets forth much important information, including the deadline for objecting to the discharge. 

To object to the debtor's discharge, a creditor must file a complaint in the bankruptcy court before the deadline set out in the notice. 

Filing a complaint starts a lawsuit referred to in bankruptcy as an “adversary proceeding”. Included among the reasons for an adversary proceeding is the transfer or concealment of property with intent to hinder, delay, or defraud creditors. 

On April 28, 2014, Noss issued a “broadcast email” to the entire Grand Traverse Academy school community touting the “financial and management experience that I have gained over 30 years” and “15 years volunteering on the board”—surely not someone who would need to secretly pay Steven Ingersoll at least $12,500 a month. 

But Noss did pay Ingersoll, a total of $380,863 (ostensibly for those 'services') between April 8, 2014 and March 1, 2016. 

The investigation would focus on determining whether or not those transfers were “fraudulent”, diverted away from the bank by Noss.

As the investigation proceeds, you can be sure I'll be covering it—exclusively!