JK Harris files for bankruptcy
JK Harris & Co. plans to seek bankruptcy protection in Charleston to head off an attempt by the Texas attorney general’s office to force the company into receivership, said company founder John K. Harris. The company, a national tax-debt-resolution service based in Goose Creek, has been dogged by cash-flow problems and the cost of large settlements related to claims that it misled consumers.
The bankruptcy filing is aimed at selling the business quickly while writing off debt. The company would continue operations in the meantime.
Consumers who were to get millions of dollars in compensation from previously agreed-upon settlements, from a class-action suit and from complaints by multiple attorneys general, could receive dimes on the dollar, as could JK Harris’ creditors. About 30 employees of the company who were laid off last week also are owed wages.
Texas is one of about 20 states – South Carolina is not among them – where attorneys general have pursued such claims against JK Harris. Texas is now suing Harris personally, alleging that he “was fully aware that the company would not perform its obligations” when he signed the agreement.
The filings follow years of cash-flow problems, a large class-action lawsuit settlement, and settlements with 20 attorneys general related to claims that the company misled consumers, typically by taking fees from consumers who did not qualify for the type of tax debt relief they were primarily seeking.
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