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Honor among debtors: justice and morality sometimes clash when businessmen hit bankruptcy court.

Honor Among Debtors

Nearly two years ago, Larry Donald Atkinson decided his two Stuttgart-based trucking ventures could go no farther. Atkinson & Co. Truck Brokers Inc. and Atkinson & Co. Trucking Inc. were carrying a combined debt of about $2 million when their namesake CEO effectively drove the corporations over to Pine Bluff and parked them in U.S. Bankruptcy Court with the stroke of a pen.

The truck brokerage company ended the first half of 1988 with a net loss of almost $247,000 on a total income of $4.6 million. The trucking company tallied a loss of about $350,000 with revenues of about $2.2 million during the first seven months of the year.

Before handing over the keys to both companies, Atkinson walked away with a nice salary increase for his stewardship. According to information reported on his W-2 forms, Atkinson's paycheck went from $80,000 (July 1-Dec. 31, 1987) to $114,000 (Jan. 1-June 30, 1988. This financial reward preceded the first bankruptcy filing by 39 days.

Within four months of ditching these two companies, he and his ex-wife Janet were back behind the wheel of two new enterprises: LLJ Trucking Co. Inc. and LLJ Leasing Co. Inc.

As with the predecessor companies, the only real assets are the trucks and trailers operated by LLJ, and these are owned by Larry Atkinson as an individual and are not the property of either the debtor corporations or the new entities that have been created to take their place.

The setup is essentially the same as before, only the companies have been renamed and Janet Atkinson is now listed as corporate president and agent instead of secretary.

The Atkinsons, who are divorced, but living together, have demonstrated remarkable resillience. At this writing, they are traveling abroad on an extended African safari where he hopes to add new game to his collection of hunting trophies.

Some of the creditors and former employees feel as if they have been stuffed and mounted for display by Atkinson. He has used the legal system to his advantage and has apparently done so without breaking any laws.

Using this criteria, some would judge Atkinson to be a shrewd executive who knows how to play the game of business for keeps. He's kept a sharp eye peeled in protecting his own best interests and looking out for No. 1. In a dog-eat-dog world isn't that the way it's supposed to be?

Lying Larry

Some hard-edged business types might give a nod of recognition to Atkinson for his tactics. After all, corporations are designed to shield executives from liability and afford them some protection from the risks inherent with running a for-profit enterprise that provides jobs and contributes to the economy.

However, a closer inspection of Larry Atkinson and his road to bankruptcy alters that perception. Grudging respect and sympathy give way to anger and indignation.

It wasn't market conditions, intense competition or even naive management that caused the demise of Atkinson's corporations. Insider accounts reveal that he milked his corporations for all they were worth to maintain his high-rolling lifestyle and then moved on down the line.

"It's not the high cost of living," observes one Atkinson insider. "It's the cost of high living that took him down. The guy has spent money like it's going out of style, and he's still doing it."

Before Atkinson took his companies under, financial advisers had come up with a plan to save the day if he would stick to a budget and give up his spendthrift ways. Atkinson promised to do so, but in short order, he was driving around in a new $30,000-plus Dodge van.

"I thought I needed to have one," is how Atkinson justified it.

His credit trail reads like the smooth-talking professional deadbeat that he is. Call Terminal Truck Brokers in Stuttgart and ask for Lying Larry. The phone will ring through to Atkinson, his nickname is that well-known.

"If you met this guy, you'd loan him some money before you left," remarks a person well-acquainted with Atkinson. "He can talk you right out of your drawers.

His money-making skills are touted as considerable in the truck brokerage business - a field he discovered a talent for after working as a school teacher and truck driver.

The bankruptcy case for Atkinson & Co. Trucking Inc. was closed in July 1989 after the U.S. trustee forced a conversion from Chapter 11 reorganization to Chapter 7 liquidation. Atkinson never filed any plans on how to restructure his company or its debts.

Atkinson & Co. Truck Brokers Inc., remains in Chapter 7 surrounded by a blue funk. Some creditors believe Atkinson stripped the company of undisclosed assets and spirited them away to safe hiding through illegal transfers and other shady maneuvers.

Debtor's Honor

Atkinson's scenario has darker overtones than many bankruptcies, but it shares a common thread with most. The debtor rarely pays back everything he owes and often uses the legal system for a dumping ground for his financial liabilities without regard for the creditor.

The bankruptcy of a partnership called Rob's Place is one of the exceptions to the rule. In May, the last installment on $80,000 owed to creditors went out. It's taken nine years to square things.

"We have met all our legal obligations, and my creditors have all been paid in full," Rob Best says. "It was quite an experience, and it would have been easier to walk away - especially from a financial standpoint."

And why didn't Best take the easy way out?

"I guess I have a conscience," he answers. "I owe them a dollar, and I want to pay them a dollar."

Best also endured a corporate bankruptcy associated with the failure of Rob's Place and the ripple effect of back taxes that prompted him to file a personal Chapter 13 in 1984. The financial and emotional strain ultimately tore apart his marriage, but he has reestablished himself as a successful business operator who unfortunately learned about overextending himself the hard way.

"In my case, what you had was a young man with experience in operating a restaurant who does well for himself, and someone comes along and makes you an offer to bankroll you so you can expand what you're doing and duplicate the successful business," Best recalls. "You get on the ego trip and go for the money. Then after awhile, you're operating four shops and going down the toilet, and no one is there to tell you you were stupid and made a big mistake until it's too late.

"I'm not ashamed of it, but I'm not proud of it either. It takes a long time to recover from something like this. I can't go home and sleep at night if I don't try to make things right and be honest with everyone."

Some people still place honor above legal expediency, and that's business at its best.
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Author:Waldon, George
Publication:Arkansas Business
Date:Jul 2, 1990
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