There's more bankruptcy drama coming out of reality TV, this time involving reality TV star Jacqueline Laurita of "Real Housewife of New Jersey." Laurita and much of her immediate family are accused of plundering the assets of a clothing company in bankruptcy.
First of all, court papers show New Jersey's Jacqueline Laurita, her husband Joseph, her husband's brother and her husband's brother's wife face a $7.8 million lawsuit accusing them of draining the brothers' bankrupt clothing company "of all its funds and assets in order to support their families' increasingly opulent lifestyle of private jets, limousines, extravagant parties, premium automobiles, designer clothing, shopping sprees, ostentatious home furnishings and lavish vacations."
The company in bankruptcy, Signature Apparel Group LLC, designed, made and distributed Rocawear-branded juniors' apparel another company originally founded by Jay-Z. According to the lawsuit allegations, Laurita's clan conspired to transfer valuable Rocawear licenses and other assets to ROC fashions before Signature's bankruptcy filing. In exchange, the Lauritas received $2.8 million which went directly to supporting the lavish lifestyles of the family members, while none of it was reinvested into the company which was well on its way to bankruptcy due to mismanagement. If this is true, the bankruptcy trustee in this case can demand that the money is returned to the bankruptcy estate.
If the Lauritas fail to return to the cash, they could face charges of bankruptcy fraud in addition to becoming personally responsible for some (or maybe all) of Signature's debts. Because it appears that there is no separation between the personal finances and business finances of the Lauritas, the bankruptcy court may choose to pierce the corporate shield that would normally protect personal assets from seizure in a business bankruptcy.