About this Blog

Since June of 2006, this private citizen has remained silent on the issue of the Advocacy and Resources Corporation bankruptcy and the subsequent actions of Michael Collins, Trustee. Throughout this period, Cookeville's local newspaper, the Herald Citizen, filed numerous reports as to the events leading to the bankruptcy filing, the status of the organization, its’ reorganization, and the intentions of its’ ‘investor/rescuer’ group, leading the community to speculate as to whether the likelihood exists that the intervention currently underway will be successful and wondering about the causes.

For the record, the not for profit rehabilitation company that I and my coworkers built with love and care over the years became embroiled in the political agenda of Bush appointed politicos who were more concerned about the preservation of their government to business relationships than with the government regulatory processes they were charged to safeguard. After the hurricanes of 2004 and 2005, the organization became the victim of a price dispute over the adjustment of its' federal contract price schedules. Massive interference by key officials along with disregard of procedural and regulatory requirements led the organization into a position of financial distress during a contract negotiation period that lasted months longer than it should have by regulation. In the spring of 2006, our bank, Amsouth prepared to merge with Regions Bank Corporation. The organization, like many others of a significant size and complexity, was placed on the 'outpile.'

Over the months, I have watched the facts of this case become submerged, subordinated to salacious charges lodged as a matter of course by the parties to the bankruptcy proceedings and officers of the court. Interestingly, the handling of these matters have addressed everything except the facts. Under the 'color and protection of bankruptcy law,' officers of the court have made claims that the the inside directors:
· caused corporate opportunities which belonged to ARC to be usurped
· “cooked the books” to manipulate increases in wages
· breached their fiduciary responsibility to govern the business activities of the not for profit organization
· created outside business interests to personally benefit from the activities of the not for profit agency they governed
· shifted revenue to outside business interests when they understood that the financial position of the agency was “headed for the tank.”

These claims, while certainly spectacular, and designed to provoke an extremely emotional response in support of the current operating group’s activities (while creating a ‘smokescreen’ for their outrageous conduct), are not supported by fact or records. Further, regulatory imperatives provide clear guidance and support for the decisions made by agency leadership in a rapidly changing and challenging business environment over the nineteen year period that leadership was at the helm. These requirements have also been conveniently omitted from the overall conversation by the litigants.

As a result of these allegations, omissions and deletions of record and fact, expectations have been raised about the intentions of the parties to the current reorganization effort, great harm has been done to the organization’s ability to financially recover, creditors and vendors who have supported the organization have been harmed, the resources of a remarkable community mental health program have been raided, and the reputations of a skilled management group have been purposefully and needlessly libeled.

While it may be perceived by some as “just business,” it should be noted that, bent on removing the influence of the former management team of fifteen persons, the current operators and legal counsel have impaired the very assets and recovery of corporate knowledge necessary to restore the ailing organization to its’ previous health as a community mental health services provider with important customer and system relationships.

This blog is designed to reinsert the regulatory, decision-making environment back into the discussion and details the facts of these matters. This blog also contains key court filings and submissions which the court refused to consider or allow but which are central to construction of a factual record. Within each posting you will find a summary of events, a glossary of terms, and links to key regulatory references and links.