Monday, June 14, 2010

FAIM files bankruptcy petition

Update: The fines have not been paid. The order levying the fines was issued on April 14, 2010. FAIM and Mr. Murphy were given thirty days to pay said fines to the state.

The Fine Arts Institute of Mississippi, the pet project of Tim Johnson and Billy Murphy, just can't seem to stay out of the news. FAIM is a charity whose stated purpose is to assist the arts in Mississippi and provide scholarships for music students. It raised money through a bingo operation in North Mississippi (which requires a charitable gaming license from the Gaming Commission.). Silbrina Wright was an employee of the Ridgeland-based charity. She filed suit in federal court against FAIM after she was allegedly fired for reporting wrongdoing by its President, Billy Murphy. The Secretary of State issued revoked FAIM's charter in April and fined FAIM and Mr. Murphy $25,000 each. Earlier post. The Gaming Commission denied the license renewal for FAIM in March. Earlier post.

The usual legal skirmishing took place in Ms. Wright's suit, including a motion for summary judgement filed by the defendant. Judge Wingate rejected the motion on June 8, stating "The court also finds there to be genuine issues of material fact as to a possible causal connection between plaintiff’s declarations on defendants’ alleged illegal activities and her termination. The court will also allow plaintiff to present her theory that defendants committed the tort of outrageous conduct." Order

However, FAIM filed a petition for Chapter 7 bankruptcy Friday afternoon (June 11) and a notice in Ms. Wright's suit notifying the court of the bankruptcy petition and asking the court to transfer the case to bankruptcy court (Same tactic used in the Steadivest and Evans lawsuits.). Notice, Bankruptcy Petition

What is interesting is FAIM is still classified as a non-profit corporation under Mississippi law and the question must be asked if it has complied with state law. The Secretary of State outlines the procedures for closing a charity on its website (Page 8). The charity must file financial statements, articles of dissolution, and "(iv) A statement signed by an officer of the corporation providing details of the final distribution of assets." (Section 79-11-503 of the Mississippi Code). The assets must go to another charity or the state. Sources have informed this website FAIM has taken none of these actions. It is unknown if the fines have been paid by either FAIM or Mr. Murphy.

8 comments:

Anonymous said...

I thought the fines were $50K each!

Kingfish said...

No. $50,0000 total.

Anonymous said...

You mean $50,000 total?

Anonymous said...

The trustee has subpoena power over the entity - and will most likely want to see financials beyond the statement and schedules. When is the 341 hearing?

Anonymous said...

Hopefully, there will be some forensic accounting to determine where all the millions from the bingo operation went. Simply saying it is missing is unsatisfactory.

Anonymous said...

Tim Johnson must be coated with Teflon.

John said...

Filed on 6/11 before the scheduled trial date of 6/14. Guess they didn't want to go trial. Creditor meeting will be in about a month. They listed the Sec. of State as a creditor. Also listed IRS as a creditor. Guess they're expecting a big tax bill after their tax exempt status gets revoked. Trustee will take a cursory glance at financials and move on. It will be up to the creditors to take a "2004 examination" which is akin to a deposition to get deeper into the books.

Anonymous said...

The bankruptcy petition states the charity has 50 to 100k in assets. With what they were profiting monthly in bingo there should be more in assets (at least one would think). Me thinks that someone is hiding money in personal accounts


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This is definitely a Beaver production.


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Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

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If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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