JK Harris asset search heads to bankrupt firm's former HQ
COLUMBIA — The painstaking job of calculating the value of JK Harris & Co.'s assets is set to resume as early as today at the bankrupt tax firm's former offices in Goose Creek.
An ex-employee of the company and a representative of the U.S. Bankruptcy Court will sift through some of the company's complex electronic financial statements, with founder John K. Harris assisting them remotely through an online conferencing service.
The weekend record search was arranged at a court hearing Friday in Columbia, where an attorney for trustee Michelle Vieira had been seeking sanctions against Harris for his failure to appear at a March 7 meeting of creditors.
Judge John Waites did not rule on her request Friday.
The meeting of creditors has been rescheduled for April 10 in Charleston.
No one seems to know if JK Harris and its two failed subsidiaries have any assets that can be sold to repay creditors, who are owed about $20 million.
An attorney for Harris said Friday that only Vieira knows. An attorney for the trustee said today's planned visit to the company's former headquarters will help determine the answer to that question. The records search could be postponed until Monday.
Vieira said in a court filing last month that “it is extremely difficult or impossible to trace the assets and cash flow” of the three bankrupt companies because Harris has been uncooperative and has not attended some of the hearings.
JK Harris & Co. attorney Bill McCarthy said Friday the process is “moving in the right direction.”
At its peak, the company was a nationwide business offering to settle people's tax debts for pennies on the dollar. The firm sought bankruptcy protection in October to preempt an effort by the Texas attorney general to force the company into receivership. The firm had been dogged by consumer complaints and large legal settlements for years.
When Harris could not line up a buyer or new lender for his company, he later decided to liquidate it. Many creditors, including consumers who are collectively owed millions from settlements of claims that the company misled them, will receive nothing.
The business has been sold to a new firm called Resolute Tax Services, which is affiliated with JK Harris & Co.'s largest creditor. The company is soliciting business from former JK Harris & Co. clients, and has agreed to pay 15 percent of its revenues or $1 million — whichever is greater — for all the assets of JK Harris & Co., JK Harris Small Business Services and JKH Holdings.
As for Harris, he told Waites that he is living in Moncks Corner with his father some of the time and working as a consultant in Florida during the week.
Waites said Harris must keep the court apprised of his location.