When Todd Fox flew the coop after abruptly shuttering 18 Fox Collision Centers last fall he left behind a tangled web of finances. A lawyer representing more than 50 workers who say they are still owed back pay has revised his lawsuit to name Fox as an individual rather than a business entity based on the convoluted nature of the case pending before a bankruptcy court.
“I made an effort to remove our claims as far away from the bankruptcy as I could,” says lawyer Charles C. “Chris” Vaught. “My reasoning on this was that if you reviewed the bankruptcy filing it became patently obvious that Fox Collision had more liabilities than it had assets. Given the bankruptcy preferences, it was clear that the employees would see little, if any, money from the bankruptcy estate.
“I did, however, encourage my clients to submit Proof of Claim forms to the bankruptcy court to protect their interests,” Vaught continues. “I also encouraged them to submit claims to the Oklahoma Department of Labor since claims submitted by the government to a bankrupt company are treated differently under the bankruptcy code.”
The sudden closure of the chain of shops in Kansas, Oklahoma and Arkansas attracted considerable industry attention because Fox issued an open letter eviscerating insurance company direct repair programs (DRPs). It appears, however, that the Fox operations were poorly managed, and the possibility is being raised that fiscal misconduct may have occurred.
A three-year former Fox employee in Tulsa, Dustin Jeffries, a lead plaintiff in Vaught’s legal actions, recalls “business as usual” on Friday, Oct. 28. “I got a call Saturday morning saying I had to get my tools because they were closing the doors at noon – it was crazy.” A final paycheck never materialized, and two others bounced. “He’s into me for $4,000 in back pay,” Jeffries contends. “There are at least 100 people here in Tulsa that this happened to.”
An uproar ensued as Fox wrote the impassioned letter blaming DRPs for the company’s demise. Media outlets in all three states pounced on the story as customers were unable to immediately recover their vehicles and workers’ paychecks bounced or were never issued.
Fox had skipped town and was subsequently tracked down and chased through a Colorado hotel parking lot by a news team from KTUL-TV in Tulsa. Fox had just opened a retail store – not a body shop – known as “Toddy’s,” described as “a purveyor of fine leather wraps and blankets” located in Aspen’s Hyman Avenue Mall.
Reporter Burt Mummolo and a camera crew embarked upon a five-day, 700-mile auto odyssey from Oklahoma to Colorado, across the Front Range to the Rockies and up to the Mile High City of Denver. Mummolo shouted questions on behalf of aggrieved former employees, but his queries were in vain as Fox fled the scene – perhaps heading northward to Minnesota.
“I am receiving conflicting information as to Mr. Fox’s residency status,” says Vaught. “The evidence I have indicates that his last known location was Minnesota and, prior to that, Colorado. His attorney claimed in her version of the Joint Status Report we submitted to the court that he was still a resident of Oklahoma. This is a crucial question that must be answered for the case to stay in Oklahoma. However, regardless of his current residency, this case could still move forward but may have to do so in Oklahoma state court,” he notes.
“The claims remaining in the (former employees’) case are an Oklahoma wage and hour claim for the unpaid wages of Oklahoma employees in Tulsa and Oklahoma City and certain tort claims that I added in an amended complaint,” Vaught says.
“These tort claims are related to Mr. Fox’s alleged conversion of funds, in that it is our belief that he wrote payroll checks to his employees and then removed the money from the bank before the checks had an opportunity to clear. I do have evidence of this fact from one of his former employees who put together the payroll. According to her, the money was in the bank when she put the payroll together and he signed the payroll checks. There was no reason for the checks not to clear unless he removed the money. Another interesting point on this issue is that the money removed from the payroll account was not listed in the bankruptcy filings so far as I could see. My suspicion, unconfirmed at this time, is that Mr. Fox absconded with the money and did not list it as an asset on the bankruptcy filing,” says Vaught.
Vaught has dropped from the legal proceedings allegations that the 18 collision center closings violated the federal Worker Adjustment and Retraining Notification Act (WARN), which requires businesses with more than 100 employees to give 60 days advance notice prior to closing up shop.
“I was unable to establish a WARN Act violation since Mr. Fox’s facilities here in Tulsa did not have enough employees and I was unable to establish the required connection between each of the shops. Simply put, each of the stores operated as an autonomous unit and could not be combined under the WARN Act to constitute one facility,” he explains. “Given the state of the law and the bankruptcy issues related to Fox Collision Center, I elected to dismiss the WARN Act claims and the ‘Fox Collision’ defendants and repostured the case to where the claims were solely directed to Mr. Fox as an individual.”
And Fox the individual has proven to be a wilely defendant. In addition to being an elusive quarry when sought to be officially served with court documents, in Vaught’s view Fox has been less than forthcoming as the proceedings have moved forward.
“We have had several hearings here in Tulsa on the Fox case,” he recounts. “It has been my observation that the court is working diligently to move the case forward but has been hampered by Mr. Fox’s unwillingness to assist his own attorneys. For instance, we attended a hearing early in the case and his counsel made reference to the fact that she did not have certain information the court had requested and did not fulfill certain activities the court had required because she had not received authorization from Mr. Fox to do so. To me, it seems as though Mr. Fox is making every effort to hamper this case in any way that he can. I do not fault his attorneys for this, as I know they are reasonable and competent. However, they can only do what their client permits them to do.”
