Bankruptcy Trustee John C. Mclemore has filed a motion to amend Cumberland Insurance Group's minimum purchase price of the B. Don James Insurance \"book of business\" from $200,000 to $175,000.
Under terms of the original agreement, Cumberland Insurance Group committed to pay 45% of its gross renewal commissions or a minimum of $200,000 for the Smithville, Woodbury, and Sparta businesses of B. Don James & Sons Insurance Agency.
McClemore now wants the original order amended because \"from the date of the sale, Cumberland Insurance Group, LLC and the Trustee had problems securing the book of business controlled by the Sparta branch. According to Mclemore, the manager there was determined to keep that business for himself. He left the employ of the Debtor and joined another insurance agency, taking with him sufficient records from the Sparta office to allow him to solicit from the customers assignments of the administrative rights to their policies. This was done despite the best efforts of Cumberland Insurance Group, LLC and the Trustee.\"
According to Mclemore's motion, \" it is the opinion of the Trustee that he was unable to deliver to Cumberland Insurance Group, LLC the book of business maintained by the Sparta branch and there should be an adjustment in the minimum purchase price required of Cumberland Insurance Group, LLC.
Mclemore, in the motion, states that Cumberland Insurance was able to generate gross commissions of $364,405 with $9,305 of that coming out of the Sparta branch. As a result, 45% of the gross renewal commissions generated $163,982 for the bankruptcy court.
Mclemore further stated, \"It is the opinion of the Trustee that given the circumstances, the minimum purchase price should be reduced from $200,000 to $175,000.
Some say the motion should not be granted because it is unfair to the other companies that bid on the business and that it could potentially reduce the money available to the creditors.
A hearing on the motion is scheduled for June 24th at 9:00 a.m. in Nashville.