OM Industries Chapter 7 trustee wants to examine former management

By Reshmi Basu

New York, Aug. 24 - OM Industries, Inc's Chapter 7 trustee asked to examine former officers and directors of the company for an investigation into whether they acted improperly, according to a Friday filing with the U.S. Bankruptcy Court for the District of Massachusetts.

According to the motion, trustee Joseph B. Collins also asked for the production of certain documents related to his investigation, saying that he believes that prior to the commencement of the bankruptcy case, the company's management may have received excessive compensation, most likely in the form of bonuses.

Furthermore, the trustee added that he believes that they "committed errors and omissions that warrant investigation," adding that "management left the debtors with an underfunded pension plan, and that management took no steps to terminate employee benefit plans, including a self-insured health plan," resulting in substantial unfunded liabilities.

Collins asked to question the following: Michael Spillane, Richard McCaffrey, Alan Jacobs and Kevin Collins.

OM Industries, formerly Malden Mills, is a Lawrence, Mass.-based textile company that filed for bankruptcy on Jan. 10 in the U.S. Bankruptcy Court for the District of Delaware. The case was transferred to the Massachusetts court on Jan. 16. Its Chapter 11 case number is 07-40124.

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