PUTTING THE “SCREW” IN SCRUTINY: Documents Fly In Full Spectrum Management Chapter 7 Bankruptcy Case; Indepdendent Bank Pressing Mark Noss For “All Correspondence or Other Documents” Relating to $925,000 Loan

Independent Bank is delving into the mystery stinking up the ongoing effort by Mark Noss to discharge $766,925 owed by his Full Spectrum Management, LLC to the bank—uncovering whether payments made by Mark Noss to Steven Ingersoll were done with intent to hinder, delay, or defraud Full Spectrum's creditors.

On May 7, Noss was subpoenaed, and 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 (TCSB). Independent Bank inherited the mess when in it assumed control of TCSB in 2018.

Noss filed a Chapter 7 bankruptcy petition February 19, 2019 on behalf of Full Spectrum Management.  Full Spectrum's Summary of Liabilities exceeded $1.0 million, with the lion's share ($766,925) owed to Independent Bank.

A hangover of Steven Ingersoll's plundering regime at the Grand Traverse Academy's, the massive debt reflects a deal Noss made in 2014 with Ingersoll (and Traverse City State Bank's Dan Stahl) to personally assume repayment of Ingersoll's delinquent $989,825 line of credit debt.

Federal court records for the case reveal Independent Bank filed a response yesterday, September 18, to a subpoena to a produce documents. It's unclear from yesterday's filing what documents were requested from the bank, but it's likely the focus was Full Spectrum's attempt to discharge a high, six-figure debt.

While there are no new developments to report, the bank's effort to gather information that could bolster a potential adversary proceeding against Noss/Full Spectrum Management, barring him from escaping repayment of the massive debt, clearly continues.

I broke down the nearly $400,000 paid by Noss to Ingersoll between April 2014-March 2016, expressed them as monthly amounts and then calculated those amounts as a percentage of Noss's monthly management fees — and the results are shocking.

For example, Noss paid Ingersoll $54,950 in September 2014, an amount equivalent to 78 percent of that month's management fee.  Three months before, in June 2014, Noss paid Ingersoll nearly $30,000, or 42 percent of his monthly fee.

And between December 2015-February 2016, while Noss was barred by a federal restraining order from having any contact with Ingersoll, he still paid him $50,000!

For what?

Steven Ingersoll masterminded the off-loading of his obligation to repay TCSB in early March 2014 from Smart Schools Management, Inc. (SSM) to Mark Noss, then president of the GTA's board of directors. 

A contemporaneous string of emails from early March 2014 (among Steven Ingersoll, Mark Noss and TCSB's Dan Stahl) revealed the framework of a deal was struck on March 16, 2014 for Noss to assume the obligation to repay Ingersoll's outstanding debt, several days before the GTA board formally voted to sever ties with Ingersoll.

If you read the email carefully, you'll see that Ingersoll uses the deal to cover his own ass relating to the $3.5 million he admitted looting from the Traverse City charter school: 
  
“The 9% allows GTA to absorb the prepaid converted to expense in FYE 14 while recovering from the resultant deficit by FYE 15.”

Noss wasn’t formally awarded a management contract for the GTA until March 19, 2014. 

He then signed a promissory note on March 20, 2014 as a Managing Member of Full Spectrum Management, LLC, assuming the legal obligation to repay $925,000 left outstanding by Steven Ingersoll's Smart Schools Management, Inc. 

The cash transfers from FSM to Ingersoll’s SSM began on April 17, 2014. 

Noss was fired from his Grand Traverse Academy management perch in June 2017, roughly three years after assuming control of the charter school in April 2014. Noss was paid a management fee set at 9 percent of the school's revenue, a deal crafted with the blessing (or written “approval”) of TCSB's Senior Vice President Dan Stahl.

Annual reports issued by the Grand Traverse Academy reveal Noss was paid an annual management fee in excess of $850,000 each year for the years ending June 30, 2015, 2016 and 2017.)

However, there is one murky exception to the Noss-to-Ingersoll payola rule: a perplexing $54,358.41 payment facilitated by Noss, and made on June 1, 2015, from a previously-secret Grand Traverse Academy/PNC Bank account, registered to the Bay City residence of Steven Ingersoll, to one of Ingersoll’s personal Chemical Bank accounts. 

Now that's one I'd like investigated...really investigated. 

The amount was purported to be fees paid to Ingersoll, revenue due resulting from his privately-run daycare facility, run on-site at the Traverse City charter school. (There was never any explanation floated for the nearly 14-month payment delay, post Ingersoll’s March 2014 departure.) 

Will we finally get to the bottom of this mystery in bankruptcy court?

If you hide a dead fish behind the drywall, it's going to stink up the place until it's removed.

Time to tear open the wall, and retrieve that dessicated acquatic vertebrate.