Cyphermint Saga Continues In Court
U.S. Bankruptcy Court Trustee Joseph Baldiga has filed civil proceedings against four former executives of Cyphermint Inc., the Marlborough-based mobile payment system maker, which involuntarily entered bankruptcy proceedings begun in August.
Baldiga claims in legal filings that the four men loaned the company money, then gave themselves preference over other creditors when more investment money came in only days before the company closed in April. Together, the men owe Cyphermint’s estate $1.15 million, according to court papers submitted by Baldiga, who is a partner at Worcester-based law firm of Mirick O’Connell.
Personal Preference
According to court documents: former CEO Joseph Barboza of Northborough owes $773,624; former CFO Robert J. Bowdring of Wakefield owes $291,836; former vice president of business development Frank DeCaro of Worcester owes $44,689 and former general counsel Paul Crème of Chelmsford owes $42,916.
Baldiga is charging them with a civil count of preference, which means they gave themselves preference in paying off the loans although the company had additional bills. Barboza and Bowdring are also charged with breaching their fiduciary duties, and Baldiga is asking that the assets of both men be frozen except for living expenses.
The claims are made in bankruptcy court. No criminal charges have been brought. Baldiga said the men were owed the money, but paid themselves back improperly, which is not a criminal offense.
Baldiga said the executives took the money out of the firm in March and April, weeks before the company’s local operations were shut down on April 18.
“The counts are to recover the money they paid themselves,” Baldiga said. The executives have until Feb. 19 to file their answers with the U.S. Bankruptcy Court in Worcester
Mark Foss, of Pojani, Hurley, Ritter & Salvidio LLP of Worcester represents Crème and DeCaro. Kevin McGee, of Seder & Chandler of Worcester, represents Barboza and Bowdring. Neither Foss nor McGee returned calls for comment on the civil charges against their clients.
The company had several Russian investors, who also allegedly took money from the company, and Baldiga said he is looking at ways to get that money back as well.
Creditors, which included a cleaning company and a printing compnay, filed an involuntary bankruptcy petition on Aug. 21, saying they were owed a total of $110,000.
Cyphermint’s assets were renamed PayCash Mobile LLC, although e-mails to the new company were not returned. The company does not list a phone number although their address remains in Marlborough. PayCash Mobile is not registered with the Secretary of State.
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