Summary of the Article
The Chapter 11 bankruptcy filing for New York-based TS Employment listed the IRS as a creditor with $95.2 million in taxes owed, according to court …
Daily NewsFebruary 04 2015
Leadership at staffing provider Corporate Resource Services Inc. (NASD: CRRS) is weighing a possible sale of some or all of the company, according to a filing with the US Securities and Exchange Commission. The move comes after its PEO service provider filed for Chapter 11 bankruptcy protection Monday citing as much as $100 million in federal tax debt, according to court and SEC filings.
New York-based Corporate Resource Service ranks as the 22nd-largest US staffing firm based on 2013 revenue.
The company reported it was out of compliance with a finance agreement with its funder, Wells Fargo, and that — along with the situation at TS Employment, its PEO — prompted the bank to reconsider financing, according to an SEC filing. Corporate Resource Services is in discussions with Wells Fargo to continue funding while the staffing provider develops a longer term strategy and the TS situation stabilizes.
Professional employer organization TS Employment is owned by Robert Cassera, who also owns more than 80% of Corporate Resource Services’ common stock, according to the SEC filing.
The Chapter 11 bankruptcy filing for New York-based TS Employment listed the IRS as a creditor with $95.2 million in taxes owed, according to court records. Corporate Resource Services is TS Employment’s only client.
“Recently, it was discovered that the debtor failed to make certain payroll tax deposits to the Internal Revenue Service,” according to a TS Employment filing with the US Bankruptcy Court for the Southern District of New York. “The precise amount of unpaid withholding tax deposits is still being determined but could be as high as $100 million. This Chapter 11 case was filed for the primary purpose of stabilizing the debtor’s business operations, so that its becoming aware of this potential significant tax liability does not jeopardize its ability to perform its PEO services to CRS.”
TS has up to 30,000 employees for which it processes payroll, according to court filings.
first published: 2015-02-03 18:56:15