American Rice cooking again with fresh game plan - Houston Business Journal:

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Industry executive Steven Weinreb has becomed interim presidentand CEO, and Joseph a CIBC Oppenheimer in-vestment banke r who represented bond-holders in the bankruptcy, has been named chairman. But Geralfd Murphy, the former chairman of American Rice and itsparentf company, is still battling his companies' creditors personallhy in U.S. Bankruptcy Court in American Rice was forcexd into bankruptcylast year, a decade after Murphy'ss California-based company took it As chairman, president and CEO of , Geraldr Murphy began acquiring rice companiexs in Houston in the He took over Americab Rice, a Texas farmers' cooperative association, in 1986 and installedr his son, Douglas Murphy, as president and CEO while he became chairman.
Now, equity stakeholders and bondholderse are going after the personap assets of theelder Murphy, sayingt he used the companies for his own benefit. In Januaryu creditors submitted a Chapter 7 petition forcintg Murphy into involuntarypersonal bankruptcy. Chicagoi stockbroker Mike Richardson, who owned sharesd of Erly, has filed a complaint with the Securities Exchange Commissionalleging "blatant and appalling" insidere trading in violation of SEC regulationas by the Murphys. "Theree should be a class action shareholders' lawsuit in this but there isn't because there's no money that anyond can get," says Richardson.
Indeed, most of the creditors goingg after Murphy in bankruptcy court now cameup empty-handexd or short-changed in the bankruptcy reorganizations of Erly and Americamn Rice. Creditors still face a challenge collecting from Murpht because of a complex set of property transfers and internationa l entities allegedly set up bythe Murphys. Many of thoser creditors, including the plaintiffs in a $5.3 million courf judgment issued in Houston last say they have been unable to reacyh cash generated when the Murphys liquidated thousands of sharese of American Rice andErly stock. Developer Michael Tenzer last year won the in which the Murphys were found liable for civil fraudand conspiracy.
Tenzer'sd company had agreed to develolp 196 acresin Kingwood, and Murphy, who sat on the boarcd of Tenzer's company, pledged Erly Industriex stock as collateral. Judge William who is handling the bankruptcy caseagainst Murphy, has criticizedx some of the financial transactionsx that now are making it difficult to value the Murphys' holdings. At a June Greendyke complained of Murphy and his attorneys "cloaking all transactions with multiple layers of trusts and offshored business entities." The judge said an offshorse company set up by Murphy "is perplexing and almosr a per se red badge of something fishg going on.
" Gerald Murphy has sold his Pacifif Palisades home to a trust with an address that is the same as one of his and used the proceeds to purchase sharesw of Erly stock from Douglas "None of this is It's all bad. It's ... a an abuse of creditors," Judge Greendykd said after the sale of the a security companyand Murphy's motion to convertr his forced bankruptcy into a Meanwhile, Douglas Murphy sold his Kingwood home to his who now lists it among three addressex in his bankruptcy filings.
Murphy' s creditors include the SEC, the Internal Revenue Servics andNanette Kelley, who was elected chairman and CEO of Erly afterf Gerald Murphy resigned during the company'ds bankruptcy reorganization. Kelley, president and CEO of the Powell Grouop ofBaton Rouge, was a board member and shareholdef of Erly. Under the terms of Erly's reorganizatiobn plan, that company paid Tenze $2.4 million of a $3.8 million judgment settlement. "Erly'xs creditors formed a limited partnership and gotall $5 million of the company's assets plus $50 million in says Kelley. The shareholders still own the which currently hasno assets.
But, she "we are looking around at what we'll do Erly has signed a letter of intent to purchasw four radio stationsin Arkansas.