Handcrafted basket-maker Longaberger's parent company files for bankruptcy

Kent Mallett | Newark Advocate

Longaberger parent company JRjr33, also known as CVSL and JRJR Networks, filed for Chapter 11 bankruptcy Friday in U.S. Bankruptcy Court for the Northern District of Texas.

The Longaberger company announced it was suspending operations on May 5, when it sent an email to sales consultants, asking them to halt accepting new orders because the company was without operating cash.

The email came a day after several consultants for the company said they believed the company was closing its doors.

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JRjr33 representatives failed to show for a court-ordered conference Friday in Franklin County Common Pleas Court, in Columbus. The conference, a judgment debtor exam, was scheduled for the company to show its assets to former Longaberger CEO Tami Longabeger, who won a $2.1 million judgment against the company on Feb. 12.

Judge Mark Serrott had scheduled a show-cause hearing for July 25, when JRjr33 would be required to show why it should not be held in contempt of court for its failure to attend the conference.

But, after the company filed for bankruptcy, the judge canceled the show-case hearing, according to Vanessa Griffin, staff attorney for the judge.

Steven Tigges, attorney for Tami Longaberger, had planned to file a motion asking for the contempt of court charge, freezing of company assets and warrants for the arrest JRjr33 representatives. The bankruptcy filing changed those plans.

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"We just have to work our way through the process," Tigges said. "I'm hoping (Tami Longaberger) will see the judgment paid. The bankruptcy court is well-equipped to sort through the financial affairs of the company. We'll just have to wait and see."

In the bankruptcy filing, the company states it has between 100 and 199 creditors, and between $1 million and $10 million in assets and in liabilities.

The $2.1 million judgment for Tami Longaberger includes $1.275 million in salary, $608,642 in deferred salary and $208,986 in business expenses. The judgment did not include another $1 million in personal loans she made to the company. That case is still pending.

Tami's sister, Rachel Longaberger Stukey, a former Longaberger Co. shareholder and officer, and former Longaberger Foundation president, also prevailed in a lawsuit against the company in September, when a Franklin County Common Pleas Court judge ruled Longaberger Co. owed Stukey $2.7 million.

Left unresolved was whether JRjr33 was also responsible for the payments to Stukey. A settlement was reached, but the details were not disclosed.

Longaberger Co. also owed about $850,000 in delinquent property taxes on its basket-shaped former headquarters in Newark. The sale of the building last year paid off the delinquent taxes, with 75 percent going to the city of Newark and 25 percent to Licking Valley Schools.

kmallett@newarkadvocate.com

740-328-8545

Twitter: @kmallett1958