U.S. Trustee: IPS Worldwide case should have trustee or be converted

By Caroline Salls

Pittsburgh, March 22 – The U.S. Trustee overlooking IPS Worldwide, LLC’s Chapter 11 case asked the U.S. Bankruptcy Court for the Middle District of Florida on Thursday to either order appointment of a Chapter 11 trustee for the estate or convert the case to Chapter 7 bankruptcy.

Region 21 U.S. Trustee Daniel M. McDermott said in his motion “There can be no doubt that what the debtor has disclosed in the papers filed with this court and at the first meeting of creditors (and further illuminated in the examiner’s interim report), constitute, at a minimum, ‘incompetence’ by management.”

In addition, if it is IPS president William Davies’ contention that he was not aware of accounting discrepancies, or that he is unable to properly account for tens of millions of dollars the company collected from customers and explain the unauthorized comingling of funds, then McDermott said Davies has failed to fulfill his obligations as a fiduciary of the company.

“Thus, he cannot be entrusted with the fiduciary responsibilities of a debtor-in-possession,” the motion said.

As previously reported, IPS creditor Stanley Black & Decker, Inc. is also seeking appointment of a Chapter 11 trustee after the interim examiner’s report revealed that IPS’ current leadership lacks enough knowledge to effectively run the company’s operations.

A preliminary hearing is scheduled for April 5.

IPS Worldwide is an Ormond Beach, Fla.-based freight payment company. The company filed bankruptcy on Jan. 25 under Chapter 11 case number 19-00511.

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