Subsequent Event

Four loans amounted $11,700 which is supposed to be transfer to AHL’s main corporate account at
Bank of America (BofA) were about to be funded. On October 1, 2002, Wilbur personally collected the
four check himself and deposited them into Bofa. After depositing it, Wilbur immediately wrote a check
to himself and Letitia for the entire amount of the fund but the check bounced. Al noticed Wilbur act
through the internet and immediately called him for an explanation which Wilbur said to pay the
employees but Al did not believed him. Al then faxed Wilbur and Letitia not to write check anymore and
make sure the fund is sufficient to cover the check they wrote but they already $1533.09 overdrawn
because of returned check charge. Al called BofA to stop the payment and transfer the four check to
general checking side payroll account which Wilbur has no access but Wilbur failed Al plans and
transferred the money back to the general account. This event infuriated Al and decided not to trust
Wilbur anymore. On October 9, 2002, Al asked friend of him to be agent for him to fire all the
employees. However, the employee refused to go and Al called the police. But the police did not do
anything and just leave because Wilbur claimed himself as the owner. On October 14, 2002, Al sent a
letter to 100+ AHL client they had to drop their applications which the key phrase is “we are no longer
going to able to service your application. The next day, Wilbur knew the Citizens Bank & Trust (CBT)’s
manager personally and opened up account there. Wilbur wired the AHL’s fund to the account. Al
discovered the second bank account and outraged because they did not required any corporate
documents, then Al immediately called CBT and informed Wilbur has opened fraudulent account but
CBT refused any action. As a last resort, Al called a police of Atlanta and the FB but they not interested
with the case because involved a small amount of money. On the day he open the fraudulent account,
Wilbur also filed a warrant to arrest Al claimed that was the one take the fund from the closing attorney.
Al defended himself and the case is dismissed but he incurred over $7,500 dealing with the lawsuits.
After that, AHL operated as usual under Wilbur and Al suspected that Wilbur persuaded and mislead the
employees about him. The last money he received is amounted $5,000 from the licensing fee in
September which he realized he has lost at least $15,000 or more for it. Al admitted defeat which has
cost him, his company and house in February 2003.

SMA Question (Atlanta Home Loan-Case Study)

In the summer of 2003, Al had still not decided what he should do. Should he fight to regain control over
AHL? But what was left of it? Perhaps only about $25,000 worth of equipment. Or should he give up. Let
these crooks get away with it, and try to rebuild somewhere else? Al also pondered how he had gotten
into this disaster from happening?