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Wednesday, April 1, 2020

“FURTHER ARGUMENT BEFORE THE COURT IS WARRANTED” Full Spectrum Management's April Fool & His Bankruptcy Stall Tactics Wilt; Status Teleconference Today

Did Mark Noss (longtime board member and former manager of the Grand Traverse Academy) craft a sophisticated scheme to direct money to Steven Ingersoll and, in the process, evade collection of his own income taxes by the IRS?

Mark Noss wants a do-over, and spike the deal struck between the bankruptcy trustee assigned to his Chapter 7 bankruptcy and Independent Bank that would allow the bank to: pursue Noss, his personal/business assets for the $800,000 he owes the bank and conduct a forensic investigation of the transfers Noss made to Steven Ingersoll.

Although a status conference in the Full Spectrum Management, LLC chapter 7 bankruptcy case is set for 1:00pm today, attorneys for Mark Noss filed a response last Friday, March 27, to the bankruptcy trustee's motion for approval of compromise.

The compromise agreement would allow Independent Bank, to pursue collection of the amount from Noss, Noss-related entities and the Grand Traverse Academy, while simultaneously conducting an investigation to seeking discover whether payments made by Mark Noss to Steven Ingersoll were done with the intent to hinder, delay, or defraud Full Spectrum's creditors. 

Here are Full Spectrum's key assertions:

“Movants’ claim that the settlement is not in the best interest of the estate centers on the proposed waiver of the Trustee’s Avoidance Claims (as defined in the Trustee’s Motion) against Independent Bank. 

The proposed consideration for this wavier does not include any cash payment only the future possibility of a 25 percent share of the Bank’s supposed recovery. 

On the other hand, the Motion itself defines a successful avoidance recovery as including a return of all payments made by the Debtor to Independent Bank in excess of $200,000, in addition to the avoidance of the security interest allowing the estate a potential recovery of $212,369 from the receivables (which the Movants dispute). 

A successful avoidance action by the trustee would benefit the estate in the estimated total amount of $412,369. 

Even accounting for the cost of litigation, it would seem that the waiver of this amount of potential recovery would at the very minimum require some sort of up-front, good faith payment to the estate.” 

Let me translate: although the bankrupcty trustee and Indepdendent Bank have previously agreed to a compromise that would allow the bank to pursue collection of nearly $800,000 from Noss/Full Spectrum, predicated on a payment of 25 percent of funds recovered to the trustee, Noss/Full Spectrum would prefer the clawback of $212,369 paid the bank for Steven Ingersoll's $950,000 debt. Basically, Noss would like to overturn that agreement.

Why would he do that?

Some of the money could be distributed to several of his businesses for the money “loaned” to them by Noss in a series of shifty balance sheet transactions.

“The Motion makes errors in factual assertions that give rise to the need for an evidentiary hearing to allow the Court to accurately assess the value of the Trustee’s Avoidance Claims. 

The Motion asserts that “A significant portion of the obligation entered into by the Debtor with Independent Bank was not new money but was an obligation of the previous management company.” (Original paragraph 10.) 

As a matter of fact, the Debtor received no new money whatsoever at the time of the transaction. This difference would be highly relevant to the determination of whether the Debtor received reasonably equivalent value in the exchange, the seminal issue in avoidance. 

(A copy of a letter from the Senior Vice President of Traverse City State Bank dated March 18, 2014, outlining the transaction and the Banks participation is attached.)” 

Again, let me explain: it's going to be difficult for Noss to sell that sausage, especially in light of the Jenga-like way he and Steven Ingersoll crafted the agreement for Noss to assume the outstanding $950,000 line of credit debt. 

The agreement for Noss to take on Ingersoll's debt was hatched by Ingersoll, and willingly accepted by Noss as a predicate for taking over management of the Grand Traverse Academy: a gig that would pay him nearly $800,000 in annual management fees.

Noss and Ingersoll, along with fellow board member Brad Habermehl, and Lake Superior State University's Bruce Harger, were in the early stages of a scheme to build a privately-funded expansion on the grounds of the Traverse City charter school, and make a killing by leasing it back to the school for the sky-high monthly rent of $44,000.

Debtor received no new money whatsover at the time of the transaction?

No, he may have already gotten his cut from Ingersoll in the years leading up to Ingersoll's federal indictment.

“The actual value of the management agreement with Grand Traverse Academy, which the Motion states was “far in excess of any obligation the Debtor incurred”, is also in factual dispute as the terms of the agreement provided the Academy with the power to terminate the agreement after 27 months. 

This is another factor that would bear on the reasonably equivalent value analysis as the Motion states that “Trustee also gives weight to Independent Bank’s argument that the Debtor was not rendered insolvent by the transactions with Independent Bank.” 

In fact, the newly formed Debtor had no other assets; only its rights under the management agreement. The testimony of the Trustee as to the process and investigation of this issue would seem necessary to a determination of the efficacy of the proposed settlement.”

Noss is calling out a fuck-up of his own: when the Grand Traverse Academy agreed in 2015 to extend Full Spectrum's management original 2014 contract to June 30, 2021, the officially approved document included a clause that maintained the 2016 end date.

Someone screwed the pooch!

“The timing of the analysis of the proposed settlement has also been made an issue in this matter by the statements of counsel for Independent Bank that “timing is of the essence” with an allegation in that there was a large fraudulent transfer made in early April of 2014. 

This characterization is likely a misunderstanding of the facts previously presented to Independent Bank. 

In fact, on April 8, 2014, the Debtor transferred $192,401.82 to the previous management entity. 

The entire amount was for the payroll of Grand Traverse Academy employees because the transition of the payroll process to the Debtor could not be completed in time to meet the payroll. 

This transaction was not even close to a fraudulent transaction and the allegation is suggestive of serious overstatement in the Bank’s claims in general. There is no crisis of time for the holding of an evidentiary hearing on this settlement.” 

Nice try, boys!

A review of the original Settlement Agreement, and the modified document filed by the Full Spectrum Management, LLC bankruptcy trustee on March 19, 2020, reveals the $192,401.82 payroll transfer was not identified as one of the “fraudulent transfer claims” against Mark Noss and several of his business entities, along with Steven Ingersoll, Smart Schools Management and other related entities months before Noss filed the Full Spectrum bankruptcy petition on February 19, 2019.

This is a legal tactic, known as stalling for time.

Noss and his legal team want to spend endless hours jawboning this thing to death, and call the bankruptcy trustee into federal court to testify in person.

Tick tock, bitches!


  1. I wonder if Ingersoll paid taxs on the Noss funds he got...unlikey

  2. You are correct in your assumption that Ingersoll did not pay income tax on the amount shoveled to him by Noss. Noss made the payments to "Smart Schools Management", which meant he (Noss) did not have to file a 1099 because it was a corporation. In turn, Ingersoll did not declare that nearly $400,000 Noss paid to Smart Schools, and never paid any income tax on that pile of cash.

  3. Keep up the great work in uncovering /exposing all things Noss/Ingersoll. It's always worth the wait for people to see the depth of your research to expose those crooks and others like them.

    1. Thank you! I'm always ready to kick ass and take names.