Lease-to-Own Firm FlexShopper Files Bankruptcy After Firing CEO
(Bloomberg) — FlexShopper Inc., a publicly traded lease-to-own financing provider for appliances, electronics and other consumer products, has filed for bankruptcy, months after ousting its chief executive officer following an internal investigation into fraudulent loan documents.
The Boca Raton, Florida-based firm sought court protection in Delaware on Monday and said it had an offer to sell its business to an affiliate of another leasing provider, Snap Finance, according to court documents. The offer is in the form of a chasing horse; This means the sale is subject to better bids in a future bankruptcy auction.
Flexshopper listed assets of at least $50 million and liabilities of at least $100 million as part of its Chapter 11 petition.
The bankruptcy filing comes after FlexShopper fired former CEO Russell Heiser in August for allegedly providing false documents to the company’s auditor to support loan receivables and loan proceeds, the firm said. FlexShopper Chief Restructuring Officer Matthew Doheny said in the court filing that he also accused Heiser of “granting guarantees that did not exist or did not meet eligibility requirements” under one of the company’s lending facilities.
The company’s conclusions are based on an internal investigation conducted after a member of FlexShopper’s finance department voiced concerns to the company’s board of directors, according to bankruptcy documents. In July, FlexShopper said its previously published financial statements should no longer be relied upon.
Heiser could not immediately be reached for comment.
FlexShopper provides customers with self-financing through leasing for refrigerators, furniture, televisions, tablets and other consumer electronics. In court documents, the company said it has a proprietary process that provides customers with payment terms and spending limits “in minutes.”
The case is FlexShopper Inc., case 25-12254, in the U.S. Bankruptcy Court for the District of Delaware.
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