**FlexShopper Inc. Files for Bankruptcy Amid Fraud Investigation**
FlexShopper Inc., a publicly traded company specializing in lease-to-own financing for consumer products such as appliances and electronics, has filed for bankruptcy just months after the dismissal of its CEO due to an internal investigation into fraudulent loan documentation. The Boca Raton, Florida-based firm sought court protection in Delaware, revealing plans to sell its business to an affiliate of Snap Finance, another lease-to-own provider. This sale is structured as a stalking horse bid, allowing for potentially higher offers during a future bankruptcy auction.
In its Chapter 11 filing, FlexShopper reported assets exceeding $50 million and liabilities surpassing $100 million. The bankruptcy follows the termination of former CEO Russell Heiser in August, who was accused of providing forged documents to the company’s auditor to support loan receivables and revenues. Additionally, Heiser allegedly pledged non-existent collateral that did not meet the eligibility criteria of one of the company’s lending facilities, as stated by FlexShopper’s Chief Restructuring Officer, Matthew Doheny.
The company’s findings stem from an internal investigation initiated after concerns were raised by a member of FlexShopper’s finance department to the board of directors. In July, FlexShopper announced that its previously issued financial statements should no longer be considered reliable. Attempts to reach Heiser for comment were unsuccessful.
FlexShopper offers lease-to-own financing options for a variety of consumer goods, including refrigerators, furniture, televisions, and tablets. The company claims to have a proprietary process that allows customers to receive payment terms and spending limits within minutes.
The case is registered as FlexShopper Inc., number 25-12254, in the US Bankruptcy Court for the District of Delaware.
**FAQ**
**What led to FlexShopper’s bankruptcy filing?**
FlexShopper filed for bankruptcy following the termination of its CEO due to allegations of fraud involving forged loan documents and misrepresentation of collateral.
