Bankruptcy Fraud
eToys
The Fraud, Perjury, and Cover Up

eToys has been mired in controversy over the way its officers paid themselves millions of dollars before exiting the corporation just before it filed bankruptyc, leaving the shareholders penniless.

But according to Laser S. Haas, who owns a liquidation company, the real corruption and wide-spread fraud began when the company entered the bankruptcy zone.

Haas and others say they have been denied justice by the Delware U.S.Trustee and that their evidence exposing the graft and corruption by bankruptcy trustees and their lawyers, just went into a black hole.

Laser Steven Haas, is the sole owner of the L.A.-based Collateral Logistics, Inc., which is the court approved liquidation company by federal order in eToys. It was going to sell all of eToys assets for $3-$5 million and I helped get the same assets to $20 million, which helped put over $45 million in the cash reserves of eToys.

Delware's U.S. Trustee's Black Hole

 

 

By: Laser Haase
Posted: 1-12-07

 

The eToys shareholders and creditors have been deceived and are defrauded out of opportunity and net return.

I was offered a bribe of $750,000 and said no -- I was unwilling to become part of the good ole boys club in the Bankruptcy Court of Wilmington DE.

The details I give are supported by evidence in the Bankruptcy Court records. Anyone may access them online at Pacer or Racer.

A list of facts, that has been accomplished thus far. (for though I am given credit -- it is the facts/truth that has accomplished several items that are really unimaginable)

1. I made allegations in the Fall of 2004 (Oct, Nov, Dec) on the failure to disclose the MOST serious violation of conflict of interest any one has ever seen in a bankruptcy case.

2. I had been making these allegations since 2002 to the US Trustee office in Wilmington DE to Mark Kenney as Attorney for the US Trustee assigned to the eToys case, Delaware Fed Dist case number 01-706. All the while being told by Mark Kenney that there was no cause for concern.

3. My allegations were
a. Paul Traub as Attorney for the Creditors committee did have an undisclosed relationship with Barry Gold,,, who became CEO of eToys after eToys filed for Bankruptcy.

b. That the US Trustee Office in Wilmington was failing to do their duty and had misrepresented the facts of law to me.

c. That in the lawsuit for hundreds of Millions of dollars by eToys against Goldman Sachs,,, RR Donnelley was voting as a Board member of the eToys Committee.

d. That RR Donnelley had failed to declare that 2 members from Goldman Sachs did sit upon the Board of RR Donnelley.

4. The Court, as a result,, during the hearing of Dec 22, 2004 did hold up the Goldman Sachs issue.

5. The Court on DEC 22 2004 did Order that the parties I alleged against,,, to respond to the allegations by Jan 25th 2005.

6. eToys shareholders did "Join" my Motions and had been trying for 3 years to prove the relationship between Traub Bonacquist & Fox (Paul Traub) and Barry Gold.

7. Barry Gold, Paul Traub, Michael Fox and the new committee of eToys (the PEDC) along with Morris Nichols Arsht & Tunnel (MNAT) which is the attorney for the ESTATE of eToys locally in Delaware did all respond on Jan 25th 2005.

8 The responses included admissions of the relationship between Barry Gold and Paul Traub and gave us the first look by Barry Gold of his hiring letter that was "willful" circumvention of the CODE, RULES and Court system requirements that Barry Gold had to receive Court approval, which would have required him to disclose any and all ties to the ESTATE which has been renamed EBC1, Inc and has no ties to the current eToys.com online.

9. The Court did permit a hearing on the Responses of Jan 25 2005 on Feb 1, 2005.

10. Paul Traub had hired R Sussman of Kronish Lieb firm as his counsel in the matter.

11. Barry Gold had Mark Minuti,,, (Mark has worked for/with Traub in the past)

12. The Court did permit myself and the shareholders to depose, under oath, the Lawyers and Barry Gold.

13. MNAT volunteered to be part of the deposition proceeding.

14. During depositions, which occurred on Feb 9, 2005 additional conflicts were admitted to by MNAT, Gold and Traub. MNAT and Traub both worked with Goldman Sachs, MNAT also worked with GE,,, and did not disclose any of these relationships as required by the CODE.

15. On Feb 15, 2005 the US Trustee did seek a Motion to Sanction Traub's firm for $1.6 million.

16. The Trustee did state that the Sanctions were inadequate as Traub had continued the conflicts from the time Barry Gold came on board and continued to do so, intentionally, even after the relationship was exposed in another Wilmington DE bankruptcy case entitled In re: Bonus Sales, until I placed the facts about the company Asset Disposition Advisors that Barry Gold and Paul Traub were principals of into the Public Pacer record in the fall of 2004.

17. The Trustee also told the Court that it had told Traub and everyone, in the Spring of 2001,, that any replacement of Officers at eToys had to be "arms length" from anyone already involved.

18. The Trustee stated that it could not do anything about Traub now as Traub and Barry Gold had drafted a Confirmed Plan.... (there is an old "draconian" law entitled 11 USC 1144 that states a confirmed plan cannot be amended "even for FRAUD" after 180 days. -- this in effect supposedly makes a statue of limitations on Traub and Gold --but that is not True)

19. Paul Traub was allowed to hire James Garrity of the firm Sherman Sterling. James Garrity is a former Federal Judge out of New York.

20. James Garrity and the US Trustee then come out with a settlement for only $750,000 and basically has language that is immunity.

(See the Department of Justice Fraud Manual , dictating how a U.S. Trustees must handle reports of a crime; when and how victims are interviewed; and when and how the filers of the complaint are notified of the investigation results. )

Note: Also see the Smoking Gun and ATP stories on this web site of how the Sacramento-based U.S. Trustee, Antonia Darling, failed and refused to follow procedures and in doing so denied the victims justice, and in the case of the Smoking Gun story, retaliated against the whistleblower.)

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