A Polk County court order that
former Greater Des Moines businessman John Vratsinas pay nearly $1.5 million to
shareholders of a construction company he controlled should not be delayed by
his bankruptcy, according to a court document filed Friday that alleges
Judge Robert Hanson ruled last
September that Vratsinas improperly shuffled funds from the construction
company to an employee-leasing firm and into his own pocket. Vratsinas was
ordered to pay $1.33 million plus interest and attorney fees to shareholders of
John Vratsinas Commercial Builders Inc. Des Moines attorney Donald Neiman was
appointed receiver for the company and was charged with overseeing its
Vratsinas sought protection from
creditors in a bankruptcy case filed in June in U.S. District Court for the
Northern District of Iowa. In the filing, Vratsinas said he is a resident of
Clear Lake. A law firm representing Neiman filed a case Friday in the
bankruptcy court saying the Polk County court order should not be barred by
Vratsinas's bankruptcy case because there was wrongdoing involved.
Neiman's filing outlines a series
of cash transfers from the construction company to Iowa Construction Logistics,
an employee-leasing firm Vratsinas created. The transfers were made without the
knowledge or approval of John Vratsinas Commercial Builders shareholders,
according to the bankruptcy court document and Hanson's ruling.
Vratsinas moved $1.3 million from
the construction company to the employee-leasing firm in a series of 12
transfer between April and December 2008. According to the Polk County shareholders
lawsuit and bankruptcy court documents, Vratsinas was draining the construction
company of cash because he knew the business was failing.
At the same time, he also
advanced $468,850 from the construction company to a limited liability he formed
to buy an airplane and to create a pre-paid flight services account. That
transfer also was made without the knowledge of shareholders, according to the
bankruptcy court filing.
Vratsinas received slightly more
than $1 million in income from the Iowa Construction Logistics in 2008.
According to Neiman's case
against Vratsinas, the construction company's balance sheet showed a zero
balance on an $800,000 line of credit with Bank Iowa in June 2008. As of Dec.
31, 2008, Vratsinas had increased the line of credit by $200,000 and drew down
by $1 million. The June 2008 balance sheet showed positive equity of $437,724
in John Vratsinas Commercial Builders. One Dec. 31, 2008, the company had
negative equity of about $1.8 million.
John Vratsinas Commercial Builders
filed for bankruptcy in January 2009. The case was later dismissed.
Neiman's attorneys argue that the
debt incurred in the Polk County ruling should not be discharged because he
violated his fiduciary responsibilities to the construction company and engaged
in embezzlement and larceny.
Meanwhile, Vratsinas attorneys
filed a motion to block distribution of assets in his pending divorce in Polk
Read more about the
bankruptcy filing in the Business Record: Click