Systems of Excellence files for Chapter 11Videoconferencing manufacturer Systems of Excellence (SOE) is struggling to keep from closing its doors for good, following a securities-fraud scandal last fall that landed the company's former CEO,
Videoconferencing manufacturer Systems of Excellence (SOE) is struggling to keep from closing its doors for good, following a securities-fraud scandal last fall that landed the company's former CEO, Charles Huttoe, in federal prison and pushed the company into bankruptcy. Systems of Excellence filed for reorganization under Chapter 11 in March; in addition, the company reportedly faces a class-action lawsuit filed in December on behalf of a bevy of disgruntled stockholders.
Although Systems of Excellence maintains an office in McLean, VA, all but three employees have been let go, according to Bob Dutton, acting general manager. Phone calls to the company are answered by a recorded message from Dutton.
"The board of directors authorized the filing of (the Chapter 11) petition after carefully evaluating all available options for alleviating the competing pressures that have been brought to bear against SOE," Dutton's message said. "We believe that, with the cooperation of our creditors, shareholders, and contractors, SOE will soon emerge from Chapter 11 protection fully equipped to compete effectively in the marketplace for video teleconferencing systems."
Systems of Excellence claims to be actively seeking $2 million in investment capital to help the company get back on its feet. In the meantime, Huttoe has begun serving a 46-month prison sentence after plea-bargaining with federal prosecutors and pleading guilty to charges of money laundering and securities fraud last November. Upon his release, he will serve two additional years of supervised release and pay a $10,000 fine. He has reportedly already turned over to the Securities and Exchange Commission a substantial portion of the $12 million he allegedly pocketed last year through his stock-manipulation scheme.
SEC officials claim that Huttoe distributed millions of shares of unregistered SOE stock to relatives and associates, then pumped the stock up by issuing press releases containing false claims of major systems sales. Huttoe then sold his shares into the inflated market, according to the SEC.