April 25, 2018
As previously reported, the HJH Consulting Group Inc, also known as The Salt Group, filed for bankruptcy and is allegedly being investigated by the FBI. Now the company has accused former president, Stephen Canty, of breaching his fiduciary duty.
According to San Antonio Express-News, HJH didn’t elaborate on its claims against Stephan Canty and his attorney, Gerald “Gerry” Goldstein declined to comment.
The company said it has a claim against Kerrville accounting firm Pressler, Thompson & Co. as well. San Antonio Express-News determines that according to the filing, the reason for the claim is for “committing malpractice in regards to conducting audits for the debtor for a number of years.”
San Antonio Express-News searched the Kerr County court records but their search didn’t turn up with any litigation filed by HJH against either Canty or the accounting firm. HJH’s bankruptcy lawyer, James Wilkins, declined to comment to San Antonio Express-News.
Pressler, Thompson partner Tim Porter said to San Antonio Express-News that he wasn’t aware of any claim HJH might have against his accounting firm. He said it’s possible HJH may contend the firm failed to detect fraud during its financial audits, but added that’s not the job of an outside auditor.
“It says right on the opinion letter that if we detect (fraud), we will let it be known,” Porter said in a phone interview with San Antonio Express-News. “But the purpose of an audit is the expression of an opinion on financial statements.”
Information shared by San Antonio Express-News states that in a recent court filing, HJH listed their assets as $2.5 million and their liabilities as $25.2 million. Included in the assets is about $866,000 in monies owed and $1.2 million in office furniture and equipment. The consulting group also owes $24 million to Texas Capital Bank.
The Salt Group had noted that their revenue for 2016 was almost $2.9 million but dropped last year to $1.5 million. This year, before they filed for bankruptcy they reported only $150,872.
San Antonio Express-News reports that on Friday, U.S. Bankruptcy Judge Craig Gargotta issued an order authorizing HJH and other debtors to use Texas Capital Bank’s cash collateral to pay company employees and cover operating expenses.
As stated in bankruptcy court papers, HJH intends to sell the business as a “going concern” under a reorganization plan.