Irs Seizure Hobbles Eaglecard Troubled Credit Card Company Heads To Court To Seek Return Of Assets
Eaglecard Inc. will be in U.S. Bankruptcy Court this morning seeking an order that would force the Internal Revenue Service to return assets seized earlier this month.
The action against the Spokane credit card issuer shut down the company and froze the paychecks of its employees, some of whom were owed more than $500.
Last month, state authorities filed suit against the company for alleged violations of consumer protection and telephone solicitation laws.
Eaglecard attorney Barry Davidson said the IRS executed a tax lien on the company, which had employed 50, in connection with the bankruptcy of Cube Enterprises Inc.
Cube filed for liquidation in U.S. Bankruptcy Court in Las Vegas April 4, the same day IRS agents sent Eaglecard workers packing on just five minutes notice.
Cube and Eaglecard share the same legal address, 1500 W. Fourth in Spokane, and C.E. “Ed” Franklin is the vice president of Cube and president of Eaglecard, according to court records.
Cube was also named in the lawsuit filed in Spokane County Superior Court by the Washington Attorney General’s Office.
Cube owes the IRS about $140,000, Davidson said, adding “I think the majority of that will be paid shortly.”
Davidson said Eaglecard purchased some of the assets of Cube, but has no tax liability of its own.
If company assets are returned, Eaglecard could be back in business within a few days, he said.
Davidson said company officials have been given access to their offices to determine the company’s payroll obligations.
Former employee Linda Peterson said the company owes her about $300.
“It’s devastating for all of us,” said Peterson, who had worked for Eagle one month when the IRS moved in. She said complaints were outrunning new card subscribers in the days before the IRS action, which came just two weeks after the state filed its lawsuit.
Washington officials allege Eaglecard is not a licensed commercial telephone solicitor, and that its cards are useless except with a very few merchants. Some who ordered the cards never received them, according to the state lawsuit.
, DataTimes