(Bloomberg) -- FlexShopper Inc., a publicly traded provider of lease-to-own financing for appliances, electronics and other consumer products, filed for bankruptcy months after firing its chief executive officer following an internal investigation into fraudulent loan documents.
The Boca Raton, Florida-based firm on Monday sought court protection in Delaware, saying it has an offer to sell its business to an affiliate of fellow lease-to-own provider Snap Finance, according to court papers. The offer is in the form of a stalking horse, meaning the sale is subject to better offers at 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 terminated former CEO Russell Heiser in August for allegedly providing the company’s auditor with forged documents in support of loan receivables and loan revenues, the firm said. It also accused Heiser of “pledging collateral that did not exist or meet the eligibility requirements” under one of the company’s lending facilities, FlexShopper Chief Restructuring Officer Matthew Doheny said in the court filing.
The company’s conclusions are based on an internal investigation that was conducted after a member of FlexShopper’s finance department raised concerns with the company’s board of directors, according to bankruptcy papers. FlexShopper in July said its previously issued financial statements should no longer be relied upon.
Heiser’s couldn’t immediately be reached for comment.
FlexShopper provides customers lease-to-own financing for refrigerators, furniture, televisions, tablets and other consumer electronics. The company in court papers said it has a proprietary process that provides customers payment terms and spending limits “within minutes.”
The case is FlexShopper Inc., number 25-12254, in the US Bankruptcy Court for the District of Delaware.
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