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TMST sues former officers Goldstone and Simmons for unjust enrichment
By Caroline Salls
Pittsburgh, Oct. 7 - TMST, Inc. filed an unjust enrichment lawsuit Tuesday against former officers and employees Larry A. Goldstone and Clarence G. Simmons III and SAF Financial, Inc., according to a filing with the U.S. Bankruptcy Court for the District of Maryland.
TMST said Goldstone and Simmons are shareholders, directors and officers of SAF Financial, which was created when they were still employed by TMST.
According to the complaint, Goldstone and Simmons were aware that TMST would be seeking liquidation in bankruptcy before the company filed for bankruptcy and that the debt claimed by TMST's creditors exceeded the company's assets.
In addition, the company said Goldstone and Simmons created SAF as a new entity, which operated in the same line of business that TMST previously operated.
The company said the officers also structured TMST's affairs before and during bankruptcy to allow SAF to use TMST's business strategies, many of the personnel working on TMST's business and many of the same vendors and software used by TMST.
As a result, TMST said SAF wasted the company's corporate assets to benefit SAF, caused TMST to hire and keep employees it would otherwise have terminated, caused TMST to be charged for costs for which it received no benefit and caused some of TMST's creditors to be paid on the brink of bankruptcy, to the detriment of other creditors.
TMST said Goldstone and Simmons did not reveal their plans to TMST's board, but instead misrepresented themselves and concealed facts that would have allowed the board to prevent or minimize the related damage to the company.
TMST, formerly Thornburg Mortgage, Inc, is a Santa Fe, N.M., lender specializing in jumbo mortgages. The company filed for bankruptcy on May 1, and its Chapter 11 case number is 09-17787.
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