World Economic

Federal prosecutors have met with the man running Wentzville-based US Fidelis, and the company has made its financial records available to the U.S. Attorney’s office in St. Louis and to attorneys general from several states investigating the firm, a company lawyer said in bankruptcy proceedings Wednesday.

The U.S. attorney’s office would not comment on whether it was investigating the company or the company’s owners, brothers Darain and Cory Atkinson.

US Fidelis lawyer Robert Eggmann said the company, which has been run by turnaround expert Scott Eisenberg since it filed for bankruptcy on March 1, was trying to determine when the company became insolvent and where company assets went.

Under Eisenberg, US Fidelis has sued the Atkinsons — and accused them of stripping at least $101 million from the company, which was the nation’s largest marketer of extended auto-service contracts until late 2009.

Eggmann said in court that Eisenberg met with federal prosecutors "about two and a half weeks ago." Eggmann said the firm had provided them with financial records and would turn over similar documents to the state attorneys general.

The disclosures were intended to show that the company is run independently of the Atkinsons.

The Missouri attorney general’s office was scheduled to have argued in court Wednesday that U.S. Bankruptcy Judge Charles E. Rendlen III should appoint a trustee to take over the company, but the state backed away from that position. Joel Poole, the head of litigation for the Missouri attorney general’s office, said the company’s management team had shown itself to be independent of the Atkinsons and had demonstrated "a willingness to work with us."

Poole said Missouri was willing to halt a civil suit against the company and the Atkinsons that alleged widespread consumer and telemarketing fraud. In exchange, the state hopes to be more closely involved in bankruptcy proceedings.

Poole said its involvement in the bankruptcy would not affect any state criminal investigation, though Poole did not acknowledge the existence of such a case.

Norman Pressman — Darain Atkinson’s lawyer in the bankruptcy case — said his client was committed to a settlement, had been up-front about his assets and had made "unprecedented disclosure for a case when the U.S. Attorney is involved and criminal charges are implied."

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