Reorganization is granted in Same Day Service bankruptcy

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Judge Arthur Federman July 19 granted Dependable Same Day Service Inc.'s request to enter into Chapter 11 reorganization proceedings under the U.S. Bankruptcy Code. |ret||ret||tab|

Three of Dependable's creditors asked for Chapter 7 liquidation of the company May 22 in an involuntary bankruptcy petition they filed against the company and its owner, Ron Bass.|ret||ret||tab|

Dependable Same Day Service's liabilities to its creditors approach $500,000, which does not include what the company owes the Missouri Department of Revenue and the Internal Revenue Service in sales tax, employee payroll tax and income tax. |ret||ret||tab|

The three companies that filed the involuntary bankruptcy petition, Journal Broadcast Group Inc., parent company of KTTS AM and FM; Springfield Operating LLC, parent company of Springfield 33 television station; and Lamar Advertising of Missouri, a provider of billboard advertising, are owed an aggregate amount of $50,653.35 by Bass's company for unpaid advertising debts.|ret||ret||tab|

The petition came after eight judgments dating from November 1999 to March against the 8-year-old residential maintenance and repair business totaling nearly $90,000 went unpaid. The plaintiffs in those cases are the three companies that filed the involuntary bankruptcy petition, Fidelity Leasing Inc., the Missouri Division of Employment Security and Bank of America. |ret||ret||tab|

Four additional judgments against Dependable Same Day Service Inc. and Bass totaling $366,764 were ordered May 31 and June 5 after the involuntary petition was filed. |ret||ret||tab|

The plaintiffs in those cases are Southwestern Bell Yellow Pages Inc., which Bass owes more than $350,000 in unpaid advertising debts, and Potter Equipment Company Inc., which Bass owes nearly $16,000. |ret||ret||tab|

Bass was not present at the June 28 hearing, in which his attorney Raymond Plaster said Bass and Dependable Same Day Service Inc. admit the company is in a state of bankruptcy and asked Judge Federman to convert the Chapter 7 bankruptcy to a Chapter 11 bankruptcy. |ret||ret||tab|

Judge Federman entered an order of relief for the creditors under Chapter 7 based on consent of the debtor in that hearing.|ret||ret||tab|

Bass was present at the July 19 hearing and testified in court that two warm winters in a row and high overhead caused his company to begin to deteriorate financially about 18 to 20 months ago and that he has taken steps to restore the company to profitability and reorganize. |ret||ret||tab|

He said Dependable's profit margin is now at 50 percent up from a 30 percent profit margin when the company began having problems after changing its methods of operation, including closing its physical locations in other cities and employing subcontractors. |ret||ret||tab|

Bass said he also hired CPAs Dunton Hayes & Associates LLC six months ago to get his company's finances in order. |ret||ret||tab|

Bass said Dependable now provides services through subcontractors in 13 Missouri cities and Springdale, Ark. |ret||ret||tab|

Bass also said Dependable Same Day Service of Arkansas Inc. was incorporated in 1999, and the Missouri corporation's assets have been deposited into the Arkansas corporation's checking account to avoid any more garnishments to satisfy Missouri creditors. |ret||ret||tab|

Bass told Judge Federman the Arkansas account now has about $5,000 to $10,000, and the two companies have $60,000 to $80,000 in accounts receivable. However, he said the two companies still owe $2,000 to $3,000 in outstanding checks. |ret||ret||tab|

Judge Federman told Bass that under the Chapter 11 reorganization, Dependable Same Day Service Inc. would be required to:|ret||ret||tab|

open a debtor-in-possession bank account in Missouri, into which all funds from the Arkansas account would be deposited;|ret||ret||tab|

hire a CPA with no financial interest in the company;|ret||ret||tab|

give notice of the Chapter 11 filing to all creditors;|ret||ret||tab|

file a reorganization plan and disclosure statement of all assets and liabilities within 120 days, which must be approved by a majority of the creditors in number and in class;|ret||ret||tab|

submit to questioning by all creditors in a 341 meeting; |ret||ret||tab|

request permission from the court for compensation for Bass. Bass said his salary before the company began having financial trouble was $1,000 per week. |ret||ret||tab|

He said he has always been the company's only shareholder and is now its only officer. |ret||ret||tab|

Attorney Will Fletcher, Jeff LaRocca and Carl Cotner all served on Dependable's board of directors, but resigned six months ago, Bass said. |ret||ret||tab|

Attorney for the creditors Dudley Martin said it is his clients' wish to see Bass succeed with the reorganization of Dependable Same Day Service.|ret||ret||tab|

"It's everyone's wish in this case for Bass to be successful ... that's the only way they're going to get paid," Martin said. |ret||ret||tab|

Bass said he was pleased with Judge Federman's ruling to convert the Chapter 7 bankruptcy to a Chapter 11 bankruptcy.|ret||ret||tab|

"I'm glad it's over ... I was pleased with some of the judge's, and even the opposing counsel's, comments about being hopeful the company will be successful in reorganizing under Chapter 11," Bass said. |ret||ret||tab|

A third hearing in the case is scheduled for 11 a.m. Sept. 6 at the U.S. Courthouse. [[In-content Ad]]