HINSDALE, IL – A U.S. bankruptcy trustee last week questioned the ability of Fuller's Car Wash in Hinsdale to manage its finances after filing for bankruptcy.
In a brief, trustee Joshua Greene said Fuller's filed for bankruptcy because Hinsdale's Richards family sued the car wash. That was after a Fuller's employee fatally struck their son with a car on July 17, 2023.
Greene noted Fuller's shifting of assets to "insiders" before the bankruptcy filing in January.
"(T)he Debtor took numerous actions on the eve of the bankruptcy that were calculated to benefit its insiders and affiliates to the detriment of the Debtor and its creditors," Green said. "First, shortly before the bankruptcy, the Debtor removed over $4 million of receivables due from insiders from its books and records and admitted it did so without any written communications from its accounting suggesting it should be done."
In its filing, Fuller's proposed Chapter 11 bankruptcy, meaning it could reorganize and pay its debts over time.
However, Greene recommended that a federal court throw out the case entirely or convert it to Chapter 7, in which the car wash would sell its assets and then close.
Fuller's, Greene said, could not carry out its duties as a debtor in an "unbiased" way. The business has failed to adequately explain the removal of millions of dollars from its balance sheets before filing for bankruptcy, he said.
The firm's transfers, Greene said, were for the "sole benefit of its insiders at a time when it was subject to a potential claim for millions of dollars by the Richards Family and others."
In his brief, Greene held out the possibility of Fuller's providing false information on federal tax returns. He said the firm's explanation about loans to major shareholders conflicted with the returns.
"Even assuming the explanation is true, the fact that the Debtor would engage in questionable accounting and make potentially false statements on federal tax returns to avoid breaching loan covenants to its lenders is concerning and calls into question the judgment and trustworthiness of its officers and directors," Greene said.
Patch left a message for comment with Fuller's attorney, David Welch of the Chicago-based Burke Warren law firm. He has not returned previous messages.
The bankruptcy filing in January immediately halted Brian and Kristine Richards' lawsuit against the business. The couple's claim is for compensatory and punitive damages.
The family asserted the bankruptcy filing was nothing more than another step in Fuller's efforts to avoid accountability and discovery of the truth. Depositions of Fuller's executives were just about to happen when the filing occurred, the family said.
On July 17, 2023, 14-year-old Sean Richards was walking on a public sidewalk from his orthodontist to the local library when a Fuller's employee struck him with a car.
The worker ended up crashing into Fontano's restaurant, injuring customers.
In the 13 months before January's bankruptcy filing, the five co-owners received nearly $1.2 million in compensation and dividends from the Hinsdale business. The co-owners are Doug Fuller, Susan Groenwold, Ethan Fuller, Colin Fuller and Paula Fuller.
Besides Hinsdale, the car wash chain owns 17 other washes, according to its website.
Previous bankruptcy documents show the business owns 18 cars, many of them luxury models, including a Mercedes and a Cadillac Escalade.
The information showed that Fuller's owes a total of $452,000 for 14 of the cars.
For tax and bankruptcy purposes, those cars must be for business, not personal use.
Records also show the owners made more than $11 million from the sale of four car washes last year.