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Argon Credit enters Chapter 7 Bankruptcy

Argon Credit has been in the news recently for their attempt to enter a Chapter 11 debtor-in-possession controlled bankruptcy. In addition, a source has in the past informed us of numerous improprieties at Argon Credit, including of an ongoing FBI investigation for fraud.

As a natural next step, Argon Credit has now entered a Chapter 7 bankruptcy through an order of the courts of Illinois. The entire order can be found here: Argon auto stay-convert & appoint a trustee.

Furthermore, in the case between Princeton Alternative Income Fund and Argon credit the same judge rejected Argon’s request to allow Argon to use their cash. In other words, it appears that Argon was unable to prove their need to access their cash well enough or credible enough. The order can be found here: argon deny cash

In a Chapter 7 proceeding, a court-appointed received will be taking control of the company. The receiver will first start by inventorying the assets of the company. He or she will then proceed with investigating if there were any assets alienated from the company against the fiduciary duties of the officers or through any sort of malfeasance in order to claw back and increase the assets available for the creditors to share. And once all the possible assets collected, sometimes through lawsuits, the resulting proceeds will be distributed in order of priority, starting with preferred creditors all the way to equity holders. This process usually takes a few years and rarely will the creditors recoup more than 20 to 30 cents on the dollar.

The failure of Argon Credit underlines once again the need for good due diligence, good controls and the assessing of the credibility of the officers of a company before any investment. I would believe the mistakes, in this case, were mostly done by the investors who did insufficient due diligence on the company officers and put insufficient controls on their investments.

Author:

George Popescu
George Popescu

About the author

George Popescu

Serial entrepreneur.

George sold and exited his most successful company, Boston Technologies (BT) group, in 2014. BT was a technology, market maker, high-frequency trading and inter-broker broker-dealer in the FX Spot, precious metals and CFDs space company. George was the Founder and CEO and he boot-strapped from $0 to a $20+ million in revenue without any equity investment. BT has been #1 fastest growing company in Boston in 2011 according to the Boston Business Journal and the only company being in top 10 fastest in 2012-13 as it was #5 in 2012. BT has been on the Inc. 500/5000 list of fastest growing companies in the US for 4 years in a row ( #143, #373, #897 and #1270). After the company sale in July 2014 until February 2015 George was Head-of-Strategy for Currency Mountain ( www.currencymountain.com ), a USD 100 million+ holding company focused on retail and medium institutional currencies, precious metals, stocks, fixed income and commodities businesses.

• Over the last 10 years, George founded 10 companies in online lending, craft beer brewery, exotic sports car rental space, hedge funds, peer-reviewed scientific journal ( Journal of Cellular and Molecular medicine…) and more. George advised 30+ early stage start-ups in different fields. George was also a mentor at MIT’s Venture Mentoring Services and Techstar Fintech in NY.

• Previously George obtained 3 Master's Degrees: a Master's of Science from MIT working on 3D printing, a Master’s in Electrical Engineering and Computer Science from Supelec, France and a Master's in Nanosciences from Paris XI University. Previously he worked as a visiting scientist at MIT in Bio-engineering for 2 years. George had 3 undergrad majors: Maths, Physics and Chemistry. His scientific career led to about 10 publications and patents.

• On the business side, Boston Business Journal has named me in the top 40 under 40 in 2012 in recognition of his business achievements.

• George is originally from Romania and grew up in Paris, France.

2 Comments

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  • I totally concur with your assessment of the overall matter in your closing paragraph:

    “…The failure of Argon Credit underlines once again the need for good due diligence, good controls and the assessing of the credibility of the officers of a company before any investment. I would believe the mistakes, in this case, were mostly done by the investors who did insufficient due diligence on the company officers and put insufficient controls on their investments.”

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