Former Republic CEO in Custody; Bond Set at $10 MillionSeptember 10th, 2009 | Category: Industry News
“It’s basically charges regarding Republic’s failed bankruptcy and allegations that monies were taken,” Genson told DWM magazine today. “They alleged something like a $500,000 fraud.”
Genson said the bond was set at $10 million at a hearing this afternoon.
“We’d recommended a $500,000 bond,” he said. “It’s just a judge who wants some publicity.”
Genson is known as a veteran criminal attorney in Chicago and made the news recently for his involvement in the impeachment trial of Ill. Gov. Rod Blagojevich. Incidentally, Blagojevich also has ties to Republic; he spoke in December in favor of the Republic workers who refused to leave the plant, just prior to being arrested himself.
The allegations also include charges that Gillman took equipment from the former Republic factory for a new company Gillman started in Iowa, Echo Windows, according to various reports. His next court date is set for October 5.
CLICK HERE for a report from ABC-7 news in Chicago in which Anita Alvarez, Cook County state’s attorney, details some examples of the plans, prior to the plant closing, to steal money and equipment.
DWM’s calls to the State Attorney’s office, which is handling the case, have not been returned.
Many in the industry predicted this day would come as authorities were looking into the matter of the missing equipment. Serious Materials purchased the former Republic plant and had brought back approximately a dozen of the workers. DWM visited Serious Materials earlier this year at the time of Vice President Joe Biden’s visit and at that time Chuck Wetmore, director of operations for Serious Materials, told DWM that seven trucks from the former owners on their way to Echo Windows, arrived back at the Chicago plant in February. According to Wetmore the trucks never made it to the Echo facility in Iowa as they were stopped by state police.
Meanwhile, the union representing Republic’s workers released a statement today about the recent charges.
“We hope to see justice served in this case, but we know that many other workers suffer and deserve justice as well. In part that can come about labor law reform that would ensure, for the first time, penalties for violations of labor law and by aggressively holding corporations accountable when they violate our rights,” reads the statement.
“We feel like justice has finally come and we all hope that this is the beginning of more bosses being held accountable for their crimes against workers,” adds Melvin Maclin, vice-president of UE Local 1110 and a former Republic Windows and Doors worker.
UE Local 1110 President Armando Robles, a maintenance worker added, “We knew Gillman was lying to us for a long time, now the rest of the world knows it too. Workers suffer with bad bosses all the time so this is a victory for all workers.”
In related news, a case was filed in February of this year against Gillman by National Processing Co. (NPC), which provided credit-card processing services to the company prior to its closing, and was amended on August 31. The company claims Republic and Gillman owe it $77,312.33 related “to charge-backs and fees assessed to Republic’s Merchant account.”
According to the complaint, NPC alleges that “Gillman personally agreed to be responsible for all debts and other obligations Republic owed NPC under the Merchant Agreement.”
A company called “In Lola We Believe LLC” (Lola), which is listed with an address of 30 W. Oak Street, Spt. 16A, Chicago, also is named as a defendant. NPC alleges that Gillman transferred assets to Lola “with actual intent to hinder, delay or defraud NPC.”
“While Gillman was engaged in business and transactions for which is remaining assets were reasonably small in relation to the business and transactions, and while Gillman intended to incur, or believed or reasonably should have believed that he would incur debts beyond his ability to pay them as they came due, Gillman transferred assets to Lola LLC without receiving reasonably equivalent value in exchange for the transfer,” write the plaintiffs.
The causes of action named in the most recent complaint against Gillman and Republic are breach of agreements; unjust enrichment. and fraudulent conveyance. The last charge of fraudulent conveyance did not appear in the initial complaint filed in February.
Under this charge, NPC alleges, “While Gillman was engaged in business and transactions for which his remaining assets were reasonably small in relation to the business and transactions, and while Gillman intended to incur, or believe or reasonably should have believed that he would incur debts beyond his ability to pay them as they came due, Gillman transferred assets to Lola LLC without receiving reasonably equivalent in exchange for the transfer.”
Little information other than what is included in the court documents seems to be available about Lola. DWM has not been able to confirm if Gillman’s arrest and the current investigation are related to this case.
Stay tuned to www.dwmmag.com for continuing coverage of this story as further warrants may be forthcoming for other former Republic officials.
CLICK HERE for a related DWM story from December, which included interviews with former Republic workers who told DWM first-hand reports about the missing equipment.
For more of the various stories DWM has published about the Republic controversy, please visit http://www.dwmmag.com and search the Site Archives for Republic.
With reporting by DWM editors Penny Stacey and Tara Taffera.