Articles by deBanked Staff

Kris Roglieri Bankruptcy Converted to Chapter 7, The End of NACLB?

A judge approved a motion to convert the Chapter 11 bankruptcy proceeding for the embattled Kris Roglieri to a Chapter 7. The intent behind this is to kickstart the process to sell off Roglieri’s assets for the benefit of creditors whereas before Roglieri hoped that his various wholly owned businesses could somehow continue. The trustee, however, said that such an outcome was impossible given that Roglieri did not maintain financial records, has no revenue coming in, is being investigated by the FBI for ~$100 million in allegedly missing customer funds, and has no path forward. The creditors at issue in the matter felt similarly.

Among Roglieri’s wholly owned assets are Commercial Capital Training Group and the National Alliance of Commercial Loan Brokers (NACLB conference), according to documents he previously submitted to the court. He owns 100% of the membership interest in each LLC. During a prior hearing, the Chapter 11 trustee asked Roglieri if he understood that he could not transfer NACLB’s assets without trustee approval after rumors swirled that he was trying to sell it. At the time, Roglieri said that there had been no serious talks in that regard. It may have been a hard sell and could still continue to be. Despite the NACLB conference’s longevity, for example, Roglieri asserted during the proceedings that he did not maintain formal financial records for it and there are no balance sheets, P&Ls, or statement of cash flows related to it. It also apparently stiffed the venue of its last event since it lists an unpaid debt of $436,237 to Caesars Entertainment in Las Vegas.

The NACLB conference has also apparently changed its name in order to distance itself from its connection with Roglieri, according to emails reviewed by deBanked. On March 25, an official NACLB mass email communication asserted that the conference would go forward “despite uncertainties surrounding this year’s event due to unrelated legal issues” and that “we are thrilled to announce that the annual conference will proceed this November under a new rebranded name, maintaining the trusted team that has organized the event for the past 9 years.”

Following that, an official NACLB conference representative sent out emails affirming that it was rebranding to the “Commercial Loan Broker Association” and that the conference would actually take place in a new location with a different date.

The Receiver managing Prime Capital Ventures, LLC, the main entity at the heart of the Roglieri saga, filed Chapter 11 bankruptcy protection for it on Tuesday. As part of that, he stated that the entity owes more than $100 million to its creditors.

Funding Merchants in New York? What Don’t You Know?

It doesn’t matter if you’re sitting in an office located in Florida, California, New Jersey, or anywhere else, if you work with any merchants in New York State the legal stakes have never been higher. If you saw even half the commentary and feedback that deBanked has reviewed over the last two months about what’s taking place, you’d understand why you really can’t afford to miss this segment at Broker Fair this coming Monday in NYC. You’re not the only one with questions.

Don’t be that person that reaches out after it’s too late to say you wish you had known something ahead of time. Hear it from qualified attorneys that are both on the panel and in attendance at the event on May 20th in NYC. Already have a lawyer that advises you on all this? Great! Send them to this too. You only get one shot to do it right in this business. Register Here

Shopify Capital MCA, Loan Origination Growth Appears to Slow Down

Shopify Capital, the funding arm of Shopify that provides merchant cash advances and loans to merchants on its platform, experienced no increase in these related receivables in Q1 compared to Q4 2023. The company typically records significant growth in this figure each quarter. Shopify used to broadcast its origination figures far and wide in each quarterly earnings report and call but has since gotten shy about this segment of its business and no longer discloses originations. Instead, its balance sheet line item for “Loans and merchant cash advances” is virtually all there is to go by now and they were listed at $815M in Q1 vs $816M the prior quarter. This, of course, only reflects anything they’ve kept on balance sheet and could be a misleading indicator if those receivables are being sold off or taken on by a third party.

Shopify’s major rival, Amazon, never disclosed origination figures for its Amazon lending program, and in March announced that it was discontinuing its in-house lending program altogether after a 12-year run.

Shopify is still among the largest online small business lenders in the US.

“MCA Debt Settlement” Company Sued

A firm that offers to “restructure corporate debt primarily MCA or Merchant Cash Advance debt” was sued last month by a small business owner for fraudulent inducement, consumer fraud, unjust enrichment, breach of fiduciary duties, and for a declaratory judgment. Corporate defendants include MCA Resolve LLC and Coastal Debt Resolve (ABSM LLC) in addition to several individuals.

The alleged scheme, as laid out by plaintiff, asks business owners to pay huge fees to the debt settlement firm all while being forced to default on their business financing agreements on the hope that they might eventually get a proposal to settle for far less than the amount agreed. In this case, plaintiff explained that the result was that they actually ended up owing more because of how much defendants were charging. The case was filed in the Superior Court of Arizona and can be viewed here.

Notably, MCA Resolve LLC is currently being sued by two unrelated MCA funding companies in the New York Supreme Court.