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Some big fish getting caught up in DesignLine bankruptcy net

| Sep 9, 2015 | Business Litigation |

There are times when going to court is a good idea for a North Carolina business. There are other times when it would best be avoided, dictating that other legal solutions need to be found to resolve matters. Whatever the demands of the situation, the importance of having knowledgeable legal counsel tends to be invaluable for finding effective resolution.

There may be times, too, when litigation is impossible to avoid. And when action does begin, the implications can be major and cause difficulty for many different people in many different places.

Such seems to be the situation now with the bankruptcy proceedings of Charlotte-based bus manufacturing company, DesignLine. Lawsuits filed recently by the company’s bankruptcy trustee have drawn the company’s former top executives, including current U.S. Transportation Secretary Anthony Foxx, into what we suspect is an unwanted spotlight.

Readers may be aware that DesignLine was a venture launched by Gen. Buster Glosson and his son, Brad Glosson. They bought the New Zealand firm in 2006 and moved it to North Carolina. High hopes for the firm were never realized and it soon failed. In 2013, its assets were sold in bankruptcy. The recent suits represent the trustee’s efforts to recover some money for company creditors.

One suit accuses the Glosson father and son and 15 other defendants of diverting company funds for personal use. It also alleges that they redirected business that should have gone to DesignLine to other companies under their control.

The suit against Foxx alleges that he was hired by DesignLine as the company’s in-house counsel but that he provided “essentially no services” for the pay he received. It seeks to recover some $420,000 in salary.

The elder Glosson calls the suit he’s facing baseless, and an attorney for Foxx suggests the case against his client is one of a flurry of suits sparked by the statute of limitations. He says he expects the case to be resolved in his client’s favor.

Regardless of what happens in court, the publicity associated with the case is bound to result in discomfort that defendants would have preferred to avoid.

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