Bankruptcy report: Mortgage banking firm files for Chapter 11 protection

Financial company heads to bankruptcy court four months after founder's death; four other local businesses have also filed since Wednesday

Email | Print By E. Thomas Wood

J.C. Reed & Co. Inc., parent company of a group of financial businesses based in Cool Springs, has filed for reorganization under Chapter 11 of the federal bankruptcy code. The move comes just four months after founder John C. Reed died of cancer at the age of 45.

The Chapter 11 petition, filed Oct. 22 in Nashville's U.S. Bankruptcy Court, does not yet include full information on the condition of the company. It indicates that J.C. Reed & Co. has assets of between $1 million and $10 million, with liabilities in the $100,000-$500,000 range.

Attorney Bill Norton of Boult, Cummings, Conners & Berry, who is handling the case for the firm, said Reed's death in June was not the reason for filing. Norton explained that its two main operating units — investment company J.C. Reed Advisory Group and mortgage lender J.C. Reed Mortgage Co. — are both in need of funding at a time when the parent company is "running out of money."

Under the bankruptcy, Norton said, J.C. Reed intends to sell "the proprietary assets used to manage investments and operate the mortgage lending subsidiary. Apparently, the software and programs to operate those companies are unique and have value," the lawyer added.

Just two years ago, the company announced ambitious plans to launch a $100 million real estate investment trust to develop residential properties in rural Tennessee, building on its mortgage business. Company officials also said they anticipated an initial public stock offering at some point in the future.

Other business bankruptcies filed in recent days:

• SFW Enterprises Nashville LLC, SFW Enterprises Madison LLC and SFW Enterprises Gallatin LLC — Cici's Pizza franchisee Keith Gober of Old Hickory seeks Chapter 11 protection for these operating units. Between them, the three businesses report having assets of $240,000 and liabilities of $1.3 million, with most of the money owed to GE Capital for equipment financing. Filed today. Attorney: Steve Lefkovitz of Nashville.
  
  
• Electronic Depot Inc. and Large-Lots LLC — Scott Lumley of Nashville runs both Madison-based electronics wholesaler Electronic Depot and online surplus goods seller Large-Lots. Both filings are for Chapter 7 liquidation. Electronic Depot reports $82,000 in assets and $1.2 million in debts. It owes Fifth Third Bank some $321,000. Large-Lots shows assets and debts both under $200,000. Filed Oct. 25. Attorney: Lefkovitz.
  
  
• Southeast Real Estate Development LLC — This realty firm, which focuses on North Nashville properties, has filed under Chapter 7. It lists $12,000 in assets and $1 million in liabilities, with American Express its largest creditor at $371,000 outstanding. Filed Oct. 24. Attorney: Joe Rusnak of Tune, Entrekin & White.
  
  
• Street Cars Automotive Group LLC — Gallatin used-car dealer plans to reorganize under Chapter 11. It has $648,000 in assets and $755,000 in debts. Filed Oct. 23. Attorney: Lefkovitz.