Creditors of the Oklahoma City-based telemarketing company CarSafe LLC, including the company’s former president, are attempting to force the business into Chapter 7 bankruptcy.
The company’s main line of business was selling extended vehicle service agreements through telemarketing and direct mail. It was unclear if the company was still operating on Wednesday, but CarSafe has run afoul of consumer protection laws in at least two states, records show.
Attempts to reach CarSafe, or an attorney for the company were unsuccessful on Wednesday. A local phone number for the company had been disconnected, and the company’s website was no longer functional.
Creditors filed an involuntary bankruptcy petition in U.S. Bankruptcy Court in Oklahoma City on Tuesday in an attempt to force the company into Chapter 7 bankruptcy, which would allow for the company’s assets to be sold to satisfy its debts. The petition is being led by former CarSafe President Mark Eckman, who claims the company owes him $398,000 as part of a severance agreement.
Three creditors claim in the bankruptcy petition that CarSafe owes them more than $500,000.
Eckman and his attorney could not be reached for comment on Wednesday.
Steven Fluhr, an attorney for the Missouri printing company THS Investments, claims in the bankruptcy petition that CarSafe owes THS $38,000 for printing direct mailers that were used to market extended vehicle warranties to consumers.
“My client printed a lot of the advertisements that went out to a lot of people, and they were never paid and basically my client was told he was never going to get paid,” Fluhr said
Fluhr said the creditors who have filed the petition hope to recover money from accounts receivable that might be still generating income for CarSafe to repay the company’s outstanding debts.
CarSafe announced in 2011 that it had relocated its corporate headquarters from the St. Louis area to 6300 Northwest Expressway and planned to hire 55 workers in Oklahoma City over the next three years.
In 2012, CarSafe was ordered to pay $125,000 in costs and fines to the state of Georgia after consumer protection regulators there accused the company of sending direct mail solicitations that falsely represented that its vehicle service contracts would extend consumers’ factory warranties.
CarSafe also entered into a settlement with the Missouri Attorney General’s office to pay $22,500 in fines and restitution in 2012. The state of Missouri also ordered CarSafe to restructure the way it sold vehicle service contracts as part of the settlement.