Publication

Alleged victims settled. Then why’s U.S. Trustee going after this Philly fin-tech boss?

Paul Winterhalter Quoted in The Inquirer

Joseph N. DiStefano | March 21, 2019

Christopher M. Wolfington was born into business.

His great-grandfather sold the first American “convertible” cars. His Uncle Eustace invented auto leasing as we know it. Extended family includes founders and bosses of bus-manufacturing, mining-supply and energy companies spread from their native Philadelphia around the country.

Wolfington’s own career as a financial-technologies CEO hit a pothole in 2014.

That’s when a federal court in Minnesota ordered his company to pay $10 million to a couple of Ojibwe tribal casino operators to settle claims that Wolfington’s formerly publicly traded payments-processing company, Money Centers of America Inc., hadn’t handed cash over as expected. Wolfington countered that the tribes owed him money, too.

But when Money Centers filed for bankruptcy, Wolfington lost his job, along with his home and marriage, he says. He filed for bankruptcy, too.

Money Centers liquidated in 2017 but by then, Wolfington was already running another company, King of Prussia-based FinPay, which helps doctors and insurers screen patients’ solvency and helps them borrow to pay medical bills.

FinPay has signed customers including cousin Brian O’Neill’s Recovery Centers of America and Delaware County-based Pentec Health, hired 24 staff, and raised $2.7 million from doctors and other investors. State-funded Ben Franklin Technology Partners gave FinPay start-up guidance. Firm spokeswoman Gabie Kur says revenues could reach $19 million this year — almost what Wolfington’s last company grossed in its best year.

But Wolfington is still a consultant, not an employee, at least until his bankruptcy is resolved.

"The U.S. Trustee is the bankruptcy police,” said Paul Winterhalter, bankruptcy lawyer in Philadelphia at the firm Offit Kurman. Their lawyers will relentlessly pursue claims against plaintiffs that they don’t think have come clean about their true financial condition.

“A denial of discharge means any debtor he has would forever be able to pursue his claim. If he went on to make a lot of money and start his life anew, those creditors would be able to pursue those claims.”

Sometimes trustees go further. When the trustee finds your claims unconvincing, “you run the risk of perjury,” said Ted Gavin, managing director of Wilmington-based bankruptcy consultancy Gavin/Solmonese. U.S. bankruptcy trustees referred more than 2,100 bankruptcy plaintiffs to criminal prosecutors last year, charging tax fraud, making false statements under oath, concealment of assets, and bankruptcy fraud — all things Buchbinder had alleged, and Wolfington denied.

Yet follow-up criminal prosecutions are comparatively rare: Fewer than one-half of 1 percent of referred cases in fiscal 2017 were prosecuted within that year, though 40 percent more were still under consideration, according to the trustees’ annual report.

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ABOUT PAUL WINTERHALTER

pwinterhalter@offitkurman.com | 267.338.1370

Since 1983, Paul J. Winterhalter has been representing businesses and individuals in bankruptcy matters, commercial litigation proceedings, and a variety of other engagements involving sophisticated legal representations. It is his mission to provide every client, regardless of size or stature, with the most exacting and attentive legal representation possible. With an emphasis on providing excellence in legal representation on a cost-effective basis, Mr. Winterhalter never loses sight of financial implications for his clients on any action he recommends, and understands that clients' interests and goals are the priority.

Paul J. Winterhalter focuses his practice predominantly on business, financial, and bankruptcy issues. Mr. Winterhalter has been practicing in these areas for over 25 years, arguing matters before the United States Supreme Court, the Pennsylvania Supreme Court, numerous times before the Third Circuit Court of Appeals, and in many State Appellate proceedings. Mr. Winterhalter has separately tried cases in a variety of Courts and Jurisdictions including complex litigation in the U.S. District Courts, many Federal Bankruptcy Courts, and in various State Courts throughout the counties of Pennsylvania and New Jersey. This multi-faceted experience has enabled him to provide his clients with nothing short of superior legal representation.

 

 

ABOUT OFFIT KURMAN

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