|Filing: Former NTG chief's debts top $1M||
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NTG Press Coverage Summary
By Larry Rulison, BBJ Staff
Former Network Technologies Group Inc. CEO Michele A. Tobin filed for Chapter 7 bankruptcy protection in Colorado last month in an attempt to save much of her property from creditors.
The filing — made last month in U.S. bankruptcy Court in Denver — offers a behind-the-scenes look into Tobin's meteoric rise and fall as a member of Baltimore's glittering new class of technology entrepreneurs.
As chief executive of the now-defunct Fells Point telecommunications firm, Tobin attracted millions of dollars in investments from venture capitalists and high-profile clients like BGE and Comcast Corp. On the personal side, she drew a hefty salary, drove a Mercedes Benz and bought a vacation home in Colorado ski country.
But her fortunes changed shortly after she resigned from the company in June. New management uncovered accounting irregularities that forced the company's closure and sent its lead creditor, Mercantile-Safe Deposit & Trust Co., scrambling to recoup more than $3.5 million in outstanding loans.
Interim CEO John M. Collard, hired by NTG's board of directors after Tobin left, was able to repay the bank approximately $1 million after liquidating the company's assets. But the bank has also gone after Tobin, who personally guaranteed the loans with her own assets.
In July, Tobin held a garage sale, put her house in Baltimore County's Stoneleigh neighborhood on the market and left Baltimore for Colorado. She also got rid of the Mercedes. The house sold for $430,000 in August, and the $82,000 profit Tobin made on the sale is sitting in an escrow account the bank has claimed as part of a $713,000 judgment it filed against Tobin in Baltimore County Circuit Court shortly after she resigned from NTG. The bank refuses to comment on the case.
Tobin is now living in an $890,000 home in Avon, Colo., near the posh resort town of Vail. To pay her bills, including a monthly mortgage payment of $3,450, Tobin is working as a consultant for a Pennsylvania company and as a hostess at a local hotel, earning approximately $75,000 a year before taxes, according to bankruptcy court filings.
As NTG's chief executive, Tobin was paid $125,988 in 2001 and $227,004 in 2000, according to her bankruptcy filing.
Tobin is currently working as a consultant for Stoltenberg Consulting Inc., a health consulting firm south of Pittsburgh, according to her bankruptcy filing. A call left on her voice mail there was not returned. Her home phone number is not published, and she could not be reached at the Park Hyatt Beaver Creek Resort and Spa in Avon, where she says she has a second job.
Tobin's debts total more than $1 million. Her assets, most of which she is claiming as exempt from bankruptcy liquidation, total more than $1 million as well, including the Avon house, several 401k plans valued at more than $70,000, and a 2000 Jeep Laredo valued at $20,000.
Tobin's debts include an $840,000 construction loan, a $20,000 loan from one of her 401k plans and more than $50,000 in credit card debt — including $3,800 she owes on a Nordstrom card.
NTG's collapse occurred at the height of the corporate accounting mess that pushed Wall Street into the worst bear market since World War II.
After only a week on the job as the company's interim CEO, Collard said he discovered that the company had inflated its net worth in an attempt to secure financing from Mercantile and several venture capital firms, including the Abell Venture Fund of Baltimore and Smith Whiley & Co. of Hartford, Conn. Both venture firms lost millions in investments when NTG collapsed.
On July 12, Collard announced he discovered the accounting irregularities at NTG and laid off all 125 workers that morning. Within a month, he liquidated the company's assets at auction.
Although no criminal charges have been filed, Collard has said federal law enforcement authorities are investigating the case, and that he has given records to the FBI. The FBI declined to comment on the case. Officials at the U.S. Attorney's Office in Baltimore could not be reached for comment.
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