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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe 13-year-old staffing agency already owes the bank $1.94 million-a $1.17 million loan used to construct its headquarters and about $768,000 for operating expenses.
President Michael Morley blamed poor economic conditions for the filing. He said the company hopes to emerge from bankruptcy quickly.
“Our business is just now starting to come back and increase,” he said. “We’re going to be able to straighten this out. We’re not taking this lightly.”
Other debts listed in the bankruptcy filing include a $662,000 mortgage guaranteed by the U.S. Small Business Administration, almost $780,000 in federal taxes, and more than $86,000 in state taxes.
Morley said the back taxes stem from bankrupt clients, such as a nursing home chain that owed it $300,000. Staffing agencies that place temporary employees pay health care costs and payroll taxes and are reimbursed by the companies.
Smaller debts range from leases on two 2005 Lexus automobiles totaling $38,000 to $1,146 for Muzak services and $520 for yard work. The Morley Group listed assets of just under $149,000. To help get its financial house in order, the company plans to sell the 21,000-square-foot headquarters it constructed in 1999. Meridian Real Estate, which is listing the property, said The Morley Group is willing to lease back the second floor. Morley said the building was appraised at $2.8 million.
On Aug. 18, Edward Hopper, a bankruptcy attorney with Stewart & Irwin PC representing the company, asked Judge Anthony J. Metz III to grant a motion requiring Fifth Third to infuse the company with an additional $100,000 to keep it operating for two more months. In return, the company offered a lien on Morley’s home, which is for sale.
Fifth Third opposes the motion, citing existing unpaid loans and the fact it already has liens on the home, according to a filing by Melissa De Groff, an attorney with Locke Reynolds LLP representing the bank. She declined to elaborate.
Court documents show the company lost $163,000 in 2003, $658,000 in 2004, and $233,000 through July 25 of this year.
In spite of its losses, Morley said, “We’re going to take care of everybody that we can. Our goal is to emerge and keep those relationships strong.
“We are supplying our clients with good candidates and good services and that’s what we’re going to focus on.”
The Morley Group had 22 full-time counselors in 2004, ranking as the city’s fifth-largest permanent staffing agency, according to IBJ research. The company ranked second-largest in 2003, when it employed 34 counselors. It specializes in engineering, information technology, human resources, law, accounting, health care, call centers and libraries.
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