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Individual Surety Files for Bankruptcy

Thursday, August 7, 2014  
For a number of years, Edmund C. Scarborough aggressively promoted bonds on which he was an individual surety. The bonds allegedly were backed by actual assets, and most recently the alleged assets were coal on property in either West Virginia or Kentucky. On July 17 Mr. Scarborough and his wife, Yvonne K. Scarborough, filed for bankruptcy in the United States Bankruptcy Court for the Middle District of Florida, Case No. 8:14-bk-8222. In his Voluntary Petition, Mr. Scarborough listed assets of $4,546,300.51, including a house in Virginia valued at $3,243,100.00, and liabilities of $16,228,175.16. He valued his real property in West Virginia at $120,000. In Tip Top Construction, Inc. v. United States, 563 F.3d 1338 (Fed.Cir. 2009), the Court stated, “In the Certificate of Pledged Assets, Mr. Scarborough identified the proffered asset as an ‘allocated portion of $191,350,000.00 of previously mined, extracted, stockpiled and marketable coal, located on the property of E.C. Scarborough in West Virginia.’”

Two of Mr. Scarborough’s corporations, IBCS Mining, Inc. and IBCS Mining, Inc., Kentucky Division, also recently filed for bankruptcy in the Western District of Virginia, Case Nos. 14-bk-61215 and 14-bk-61216.

See an in-depth story from ENR and input from SFAA President Lynn Schubert here: http://enr.construction.com/business_management/finance/2014/0805-outspoken-individual-surety-files-for-bankruptcy-protection.asp

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