As the PFGBest scandal has played out, a variety of lawsuits have been filed against a host of entities. From our perspective, it has always been a “wait and see” type scenario, but in the case against Russ Wasendorf, Jr., attaining further assets may prove difficult. The Wall Street Journal reports:
Mr. Iavarone said Mr. Wasendorf Jr. intends to contest the allegations. If the judge keeps Mr. Wasendorf Jr. in the case, Mr. Iavarone said he would advise his client to file for bankruptcy. “The legal bills from this are going to be enormous,” he said.
There is little public information about Mr. Wasendorf Jr.’s finances. Over the second half of 2011, privately held Peregrine paid him a monthly salary of $18,750, as well as three bonuses ranging from about $10,900 to about $12,700 each, according to court filings. Mr. Iavarone said Mr. Wasendorf Jr. isn’t wealthy and sold his Cedar Falls home in part to raise funds.
In fact, Jr. seems to believe that he is truly the victim here:
In a message posted on his Facebook page Nov. 30, according to Mr. Iavarone, Mr. Wasendorf Jr. wrote that “one person’s horrific and unimaginable bad choices” left a “trail of devastation and debris.”
“So many people have been supportive,” he wrote. People close to the family “know how badly we were damaged and that we were the first unsuspecting victims as the storm hit. There are, of course, others that want to ‘kick the dog.’ I feel their anger and frustration.”
While his sympathies are appreciated, if you ask us, in no way is this “kicking the dog.” From what we saw at PFGBest, Russ Sr. was essentially a figurehead at the company over the past several years while Russ Jr. was running the day to day operations. So there are two options here. Either Wasendorf Jr. knew full well what his father was doing and participated in the scam, OR he didn’t know, as Chief Operating Officer, anything about where nearly half of the firm’s assets were, in which case he demonstrated gross negligence and a disregard for his fiduciary duty to the firm’s customers and its employees. Michel Dell’Angelo, one of the attorneys pursuing the class action suit, put it rather succinctly:
“There’s no doubt that someone who was president and chief operating officer of the company, and who was making strident assurances to customers about the safety of their money, has some measure of culpability.”
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