Hundreds of investors in Lubbock and San Antonio are still hoping to recover millions in lost savings, a week after the owners of Lubbock’s Ferrum Capital were indicted on federal criminal charges.
How much can they recover?
“I’ll tell you when we’re done,” said San Antonio lawyer Randall Pulman nearly two weeks before indictment news broke.
In this story:
- The latest developments in criminal court and bankruptcy court.
- A recap of how we got here.
- The effort to bring the Collins Asset Group bankruptcy case to Texas instead of Delaware where it was filed.
- The effort to keep it in Delaware.
Joshua Allen and Michael Cox, co-owners of Ferrum, appeared in court on July 9 to face federal charges of conspiracy and wire fraud. Their San Antonio business associate, Brooklynn Chandler Willy, was re-indicted alongside them. (Click here to see our coverage of the original charges against her.)
Allen and Cox were allowed to post bond while the criminal case continues. Willy was already allowed to remain free while the case proceeds. If convicted, they’re each looking at up to 70 years in prison.
The story and the money people lost in Ferrum, took a recent detour through Delaware. There’s a fight to bring it from there to San Antonio.
A brief overview
Allen and Cox founded Ferrum in late 2017 and collected money from investors in the form of loans. The amount varies by court record, but the recent indictment said it was $67 million by the time everything was done.
The money was supposed to go to Collins Asset Group – a debt collection company – except Allen, Cox and Willy kept some of the money for themselves according to federal criminal records.
New investors were recruited to repay the first round of investors.
In late 2023, Collins defaulted to Ferrum, according to numerous lawsuits filed in Texas. Ferrum, in turn, defaulted to nearly 400 people or businesses and Cox filed for bankruptcy in early 2024.
Willy was indicted in December on three charges including the obstruction of an FBI investigation. She was re-indicted twice since, most recently July 2 – the same day Cox and Allen were indicted for the first time.
LubbockLights.com broke news of the July 2 indictment on July 9 when Cox and Allen surrendered for a court appearance in San Antonio.
The current indictment did not use the term “Ponzi scheme” but several lawsuits and a ruling from the Cox bankruptcy judge did.
The Delaware detour
Austin-based Collins filed for bankruptcy last month in Delaware. Pulman filed a request in late June to move the Collins bankruptcy to San Antonio instead of Delaware where Collins is organized.
The day after Cox and Allen’s court appearance, a bankruptcy trustee for Collins filed an objection to stop the Collins bankruptcy from going to Texas.
Matthew King, a San Antonio attorney for some of the victims, said, “We’re going to be joining the effort to try to bring that back to Texas where we believe it belongs.”
Attorneys for Collins and a few other related companies – Oliphant, Inc., Oliphant Financial and Oliphant USA (Oliphant) – joined the trustee in trying to keep the case in Delaware. (There is common ownership between Collins and Oliphant, court records said.)
The companies have not responded to requests for comment from LubbockLights.com, which has been covering the Ferrum story since December.
The removal
One of the many lawsuits on behalf of Ferrum victims was filed in San Antonio. It seeks money from Ferrum, Cox, Allen, Willy, Collins, Oliphant and others.
In that suit, a judge put Ferrum under the control of a receivership trustee who then filed his own separate complaint against Collins and Oliphant, which we covered here.
The Ferrum receiver claimed before going bankrupt, Collins transferred some of the victims’ money to Oliphant.
As mentioned above, Collins and its parent company Hollins Holdings – both based in Austin – filed for bankruptcy in Delaware at the same time. Two days later, Oliphant moved the San Antonio lawsuit (including the receiver’s claims) into bankruptcy court.
Oliphant did not file for bankruptcy. Collins did.
But that’s enough to get this whole thing in front of a San Antonio bankruptcy judge instead of the state court judge – the same one who authorized the Ferrum receiver.
The next step for Oliphant would likely be moving it from the Texas bankruptcy court to the Delaware court.
The attorneys for the victims are trying to do exactly the opposite. They want everything brought back to state court in Texas.
Complete Ferrum Capital Coverage
Push, pull in two states
Pulman described in this article his effort to get the Collins bankruptcy case to Texas. He’s also working to get the original lawsuit back to state court in San Antonio.
Not so fast, according to documents by Collins, the Collins bankruptcy trustee and Oliphant.
Collins filed a document in the Delaware court saying roughly 16 percent of its debt collection accounts are in Texas. Less than a fraction of one percent are in Delaware.
An attorney for Collins wrote, “While it is true that CAG’s business activities in Delaware are small when compared to its national platform – so too are its activities in Texas.”
“It conducts business in every state,” the Collins document said.
The company claimed starting the bankruptcy over in Texas would be a significant “hardship.”
“Other than the convenience of litigating close to their homes, [Ferrum victims] cannot identify any benefit,” Collins said of moving to Texas.
Oliphant took a similar stance in its document, saying it’s not enough for Ferrum victims to claim, “ … some unidentified witnesses may be inconvenienced by proceeding in Delaware.”
The bankruptcy trustee was even more harsh on the Ferrum victims.
“Because they are based in Texas, they believe these cases writ large should be [relocated] there as well. … In truth, the [Ferrum victims] are not unlike thousands of other purportedly partially secured creditors in thousands of other cases who would like a court of their choosing to hear their claims. The [Ferrum victims] are not entitled to special treatment here,” the trustee wrote.
The bankruptcy judge in Delaware will decide if the case moves to Texas. No timetable has been listed in court records.
And the Texas bankruptcy judge will decide if the lawsuit goes back to state court. There’s a hearing on that question scheduled for August 1.
