Merrill Wants Ch. 11 Trustee In Leighton Case

Law360, New York (November 24, 2008, 12:00 AM EST) -- Merrill Lynch Mortgage Capital Inc. has asked a bankruptcy judge to appoint a Chapter 11 trustee in the bankruptcy case of jeweler Fred Leighton Holding Inc.

The motion, filed Friday in the U.S. Bankruptcy Court for the Southern District of New York, alleges "acts of dishonesty, incompetence and gross mismanagement" by the debtors’ controlling shareholder, Fred Leighton owner Ralph Esmerian.

"Merrill Lynch has learned, through discovery of Mr. Esmerian’s own documents, that Mr. Esmerian has secretly and systematically misappropriated millions of dollars of Merrill Lynch’s cash...
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