This story has been updated since its original publication to include comments from Thinkstream that were submitted after deadline.
Thinkstream, which provides software to law enforcement and other public agencies in six states—including nearly 300 entities in Louisiana, as well a dozen of the nation’s top federal agencies—has not paid payroll taxes in several months and two of its top executives have left the company, creditors allege in papers filed on Thursday in Baton Rouge federal bankruptcy court.
Additionally, an insurance policy protecting directors and officers from liability allegedly expired in April.
In an emergency motion asking U.S. Bankruptcy Judge Douglas Dodd to appoint an interim Chapter 11 trustee to manage the company’s affairs, creditors allege Thinkstream “has or is at risk of missing ongoing and past payrolls and is behind on payroll tax payments.”
The creditors also note that Thinkstream’s chief financial officer, Morris Alexander, is no longer with the company, and Paul San Soucie, vice president for customer relations, has ended his direct employment. The motion also claims that the company, which was founded and is operated by president and CEO Barry Bellue Sr., is trying to sell off its assets—including the “actual product or software itself.”
TSB Ventures, a Folsom investment firm allegedly owed nearly $10 million, and six other creditors are trying to force Thinkstream into Chapter 11 bankruptcy to reorganize the company. TSB says in the motion that before heading to bankruptcy court, it offered Thinkstream up to $200,000 to fund the company’s payroll obligations, but the offer was rejected.
“It is critically important to the possibility of a successful reorganization that key employees of Thinkstream be retained,” attorney Ryan Richmond writes in the motion, “and … that Thinkstream’s assets not be sold at fire sale prices without court overview and creditor involvement.”
Thinkstream maintains the Louisiana Civil and Criminal Information Network, which connects law enforcement, courts and other agencies, allowing them to share criminal and other records in real time. Federal agencies include the FBI, Drug Enforcement Administration, Coast Guard, U.S. Marshal, U.S. Probation Office, and Office of the Inspector General, among others.
Locally, Thinkstream is used by the East Baton Rouge Parish Sheriff’s Office, the First Circuit Court of Appeal, the Louisiana Inspector General, the Louisiana Attorney General and other agencies. According to its website, Thinkstream also offers identification verification and comprehensive background check services to retail banks.
In other court documents, TSB alleges that Bellue is “evading” a subpoena seeking extensive financial information, including bank records and appraisals of two aircraft and other company property. In an affidavit, a process server says he has tried three times to serve Bellue at his Crestmount Drive offices and twice at his East Lakeshore Drive home.
In a document provided to Daily Report late Monday, Thinkstream attorney Edward Gonzales says the company lacks evidence of the authenticity and enforceability of the debentures that are the subject of the debt. Commonwealth Advisors, a company currently the subject of a federal court case initiated by the Securities and Exchange Commission, sold the debentures to TSB Ventures in 2007. “The information is of particular importance,” Gonzales writes, “because the original debenture holders in this matter, who in fact themselves paid Thinkstream for the debentures, may be the true creditors of Thinkstream.”
Thinkstream spokesperson Kim Bergeron adds that “the loss of key executives is not accurate. One of our executives has taken a sabbatical for personal reasons and is still an employee of Thinkstream. He is available as needed during this time.”
A hearing on the matter is now set for July 6.