Problem
Debra Car is a credit manager for GlobalRed Wireless Services. She works with franchise stores that sell her company's wireless services and phones. She recently had to deal with one of her large Ohio franchises suddenly closing its doors. At the time, the store was supposed to be holding on consignment an inventory of phones worth about $150,000. But the store was completely empty when she arrived.
Despite repeated attempts, she was unable to contact Pedro Ladrone, the store owner, and recover any of the missing phones. She was so upset that she hired a private detective to find the whereabouts of Ladrone.
She reported the incident to the police, but they merely asked her for a copy of the contract between GlobalRed and Ladrone. The detective from the economic crimes unit said that he had a lot of cases and would take a look it "if he got time." Debra was not at all encouraged.
A few days later, things got much worse when she discovered that many of the annual service contracts "sold" by Ladrone were bogus. For each new contract, GlobalRed had immediately paid Ladrone $250. It appeared that GlobalRed had paid Ladrone for hundreds of bogus contracts. None of the customers associated with those contracts were paying their monthly bill. Many had paid for one or two months, but all of a sudden they all just stopped paying.
Debra tried to sell the contracts to a collection agency, but the agency would not buy them. After doing some due diligence, the agency said that all the contracts in question were worthless.
About a week later, Debra received some good news from the private detective. Pedro Ladrone was living in the other end of the state on a large yacht owned by a well-known celebrity and running a small cellular services store associated with a competitor of GlobalRed.
Debra instructed her attorneys to file a fraud suit against Ladrone and then seek an emergency order freezing all of Ladrone's assets. But before GlobalRed's attorney can file the suit, Debra received a notice that Ladrone had filed for Chapter 7 bankruptcy in federal court.
Task
You are engaged as an independent investigator to assist Debra in bankruptcy. What are some of the issues you face, and how should you proceed?