[1]Wingspan Portfolio Advisors [2] filed for Chapter 7 bankruptcy on Tuesday in the United States Bankruptcy Court for the Eastern District of Texas, the court confirmed to DS News.
In a Chapter 7 bankruptcy, the company ceases operations while a trustee liquidates a company's assets in order to pay off debt. A company in Chapter 7 bankruptcy continues operations only if the trustee decides to continue.
"Since this is a Chapter 7 bankruptcy, the debtor no longer exists," said Wingspan's bankruptcy attorney, Dan Morenoff, of Dallas-based The Morenoff Firm [3]. "A trustee now owns the estate. The parking brake has been pulled and the trustee is in charge."
The trustee, Michelle Chow, could not immediately be reached for comment.
Wingpsan, which was founded in 2008 by Steve Horne, announced in October 2014 that it had received a multi-million dollar capital infusion [4] from its stockholder investor group. Around the same time, Wingspan announced the divestiture of insurance claims management firm Dimont & Associates [5], which Wingspan acquired in May 2013, after Dimont received a recapitalization of its own.
Also in October 2014, Wingspan announced that its founder and CEO, Horne, had been moved into a senior advisor role with the firm while Jason Spooner, EVP of national operations with Wingspan since 2012, was named president of the company [4]. At that time, Horne said that with the divestiture of Dimont & Associates and the capital infusion, Wingspan was debt free. Horne said Wingspan had "experienced a fair degree of turbulence" with the industry's shift out of the default crisis, and that the company has made moves to diversify its services and align its workforce to the new environment.