A Houston-based tax advisory firm filed for bankruptcy Sunday, a little more than one day before it was scheduled in court to defend itself against fraud accusations. Best known for a national advertising campaign that made company’s bearded, red-haired founder Patrick Cox a recognizable figure, the company spent about $14 million in national advertising in 2009.

Questions:

1. According to the article, what amounts of assets did the company have as compared to debt in the Chapter 11 filing? According to the article, what does the timing of the bankruptcy have to do with the lawsuits filed?
2. What states are suing TaxMasters? What is the company charged with?
3. Instead of speaking to highly qualified tax consultants, who do TaxMasters customers alledgedly speak with?

Source: Video: Oberg, T. (2012). TaxMasters Files Chapter 11 Bankruptcy., ABCNews.com, March 19 (Retrievable online at http://abclocal.go.com/ktrk/story?section=news/local&id=8586594)

Mosk, M. (2012). TaxMasters Files for Bankruptcy, ABCNews.com, March 19 (Retrievable online at http://abcnews.go.com/Blotter/taxmasters-files-bankruptcy/story?id=15932628)

Bathon, M. (2012) TaxMasters Files for Bankruptcy, Dogged by Fraud Suits. Bloomberg.com, March 19 (Retrievable online at http://www.bloomberg.com/news/2012-03-19/taxmasters-files-for-bankruptcy-dogged-by-fraud-suits-1-.html)