http://www.sltrib.com/2003/Jan/01222003/business/22283.asp
Bankruptcy Judge Orders Wade Cook Into Liquidation
BY DAVID EVANS
BLOOMBERG NEWS
January 22, 2003
SEATTLE -- Wade Cook Financial Corp. was ordered liquidated by U.S. Bankruptcy Judge Thomas Glover after the money-losing stock-market seminar company's chief executive failed to provide testimony requested by creditors.
The creditors of Seattle-based Wade Cook Financial asked the court Dec. 19 to force the company and its subsidiary, Stock Market Institute of Learning Inc., into bankruptcy, alleging employees hadn't been paid back wages and that their health insurance was canceled after the company collected and pocketed premiums.
Wade Cook Financial's "failure to respond to the discovery requests have prejudiced and irreparably harmed" the creditors "by denying them the ability to adequately prepare for trial," wrote Glover in ordering the Chapter 7 bankruptcy.
In Chapter 7, the bankrupt company is liquidated by a trustee. The trustee supplants the existing management and is legally obligated to serve the best interests of creditors.
Chief executive and founder Wade Cook said he will ask the judge to convert the case to a Chapter 11 reorganization. "Nobody is saying we haven't been struggling financially," said Cook, who at one time advertised heavily and frequently held seminars in Utah.
Cook predicted a year ago that the company would earn $6 million in 2002. The company lost $6.2 million in the first nine months of the year, according to a filing with the U.S. Securities and Exchange Commission.
The company had $16,000 in the bank on Sept. 30, according to an SEC filing. The filing showed liabilities of $11.5 million and assets of $5.7 million, leaving a working capital deficit of $5.8 million.
Michelle Carmody, an attorney for the creditors, said the company failed to provide any financial records requested under bankruptcy law. "We had a deposition scheduled for Wade Cook on Tuesday. He didn't appear," Carmody said.
The market value of Wade Cook Financial's outstanding shares is $720,000. The stock gained 9 cents to close Tuesday at 20 cents in over-the-counter trading.
In October 2000, the company, which charges $6,295 for its 16 hour "Wall Street Workshop," settled Federal Trade Commission charges that it misrepresented its stock trading success to attract customers. The company disclosed that it lost 89 percent of its stock portfolio's value in 2000 and 60 percent in 2001.
In a filing with the bankruptcy court on Jan. 15, the FTC estimated the company still owes $1.5 million to its former customers as part of the settlement.
Bankruptcy Judge Orders Wade Cook Into Liquidation
BY DAVID EVANS
BLOOMBERG NEWS
January 22, 2003
SEATTLE -- Wade Cook Financial Corp. was ordered liquidated by U.S. Bankruptcy Judge Thomas Glover after the money-losing stock-market seminar company's chief executive failed to provide testimony requested by creditors.
The creditors of Seattle-based Wade Cook Financial asked the court Dec. 19 to force the company and its subsidiary, Stock Market Institute of Learning Inc., into bankruptcy, alleging employees hadn't been paid back wages and that their health insurance was canceled after the company collected and pocketed premiums.
Wade Cook Financial's "failure to respond to the discovery requests have prejudiced and irreparably harmed" the creditors "by denying them the ability to adequately prepare for trial," wrote Glover in ordering the Chapter 7 bankruptcy.
In Chapter 7, the bankrupt company is liquidated by a trustee. The trustee supplants the existing management and is legally obligated to serve the best interests of creditors.
Chief executive and founder Wade Cook said he will ask the judge to convert the case to a Chapter 11 reorganization. "Nobody is saying we haven't been struggling financially," said Cook, who at one time advertised heavily and frequently held seminars in Utah.
Cook predicted a year ago that the company would earn $6 million in 2002. The company lost $6.2 million in the first nine months of the year, according to a filing with the U.S. Securities and Exchange Commission.
The company had $16,000 in the bank on Sept. 30, according to an SEC filing. The filing showed liabilities of $11.5 million and assets of $5.7 million, leaving a working capital deficit of $5.8 million.
Michelle Carmody, an attorney for the creditors, said the company failed to provide any financial records requested under bankruptcy law. "We had a deposition scheduled for Wade Cook on Tuesday. He didn't appear," Carmody said.
The market value of Wade Cook Financial's outstanding shares is $720,000. The stock gained 9 cents to close Tuesday at 20 cents in over-the-counter trading.
In October 2000, the company, which charges $6,295 for its 16 hour "Wall Street Workshop," settled Federal Trade Commission charges that it misrepresented its stock trading success to attract customers. The company disclosed that it lost 89 percent of its stock portfolio's value in 2000 and 60 percent in 2001.
In a filing with the bankruptcy court on Jan. 15, the FTC estimated the company still owes $1.5 million to its former customers as part of the settlement.
