Trial set in case against former M&M CEO

 

 

A trial date was set Tuesday in a federal case against the former chief executive officer of M&M Environmental Group.

M&M Environmental Group LLC initially filed a complaint against Sam McFadin, former CEO, in Faulkner County Circuit Court in October 2015. The case was moved to federal court in May, and on Tuesday, a U.S. judge scheduled a trial.

A bench trial before Judge James M. Moody Jr. was set for the week of Aug. 21, 2017. All motions, excluding motions in limine, must be filed by June 7 with discovery being completed by May 15. Motions in limine must be filed by Aug. 11 and the opposing party will be given five days to respond.

M&M Environmental Group, LLC included McFadin, his wife Chelsea, McFadin Global, Inc. M&M Environmental Oil Services, LLC. and McFadin Auto Sales, Inc. in its suit.

The case “arises in or relates to the bankruptcy case … and because this civil matter concerns the administration of the bankruptcy estate and claims against it, these matters are core proceedings” the notice of removal stated, which moved the case from Faulkner County Circuit Court to the U.S. District Court Eastern District of Arkansas in Little Rock.

M&M Environmental Group fired McFadin in October 2015 and later filed a voluntary petition for bankruptcy in February.

The company claims McFadin, who was CEO and a member of the board of directors, had pocketed company proceeds after falsifying sales numbers and that he “failed to disclose to members of the board of directors of M&M Group certain payroll tax issues and operational safety issues,” according to court documents.

M&M Environmental Group said McFadin “failed to disclose safety issues and thus jeopardized significant business relationships” and also referred to an incident where they believe McFadin pocketed $400,000 from the “Damascus Sale,” where M&M Environmental Group, under McFadin, sold improvements and other equipment at the Damascus Yard, among other complaints.

“Unbeknownst to the board of directors of M&M Group until after termination of McFadin’s employment, the sale proceeds [of the Damascus Sale] were actually $500,000, [not $100,000],” court documents state.

McFadin has denied the allegations and told the Log Cabin Democrat on Friday he had no further comments.

Guy Murphy, who represents M&M Environmental Group, was unavailable for comment as of press time Saturday.

 

(Staff writer Marisa Hicks can be reached by email at marisa.hicks@thecabin.net or by phone at 505-1277. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net.)

 

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