FlexShopper, Inc. and seven affiliated debtors are well into the wind-down of their Delaware Chapter 11 cases, advancing toward a combined disclosure-statement and plan-confirmation hearing after the debtors cancelled the June 23, 2026 omnibus calendar and adjourned its matters — including interim approval of the combined disclosure statement and plan and former chief executive Harold Russell Heiser, Jr.'s motion to compel arbitration — to July 22, 2026 (notice cancelling the June 23, 2026 hearingDkt. 491).
The filing was precipitated by internal fraud. Per the first-day declaration of Chief Restructuring Officer Matthew A. DohenyDkt. 16, a May 2025 whistleblower report triggered an Alvarez & Marsal investigation concluding that then-CEO and CFO Russell Heiser manufactured fraudulent loan documents to inflate the lease-and-loan portfolio's fair value, generating overborrowing in excess of $140 million under the roughly $200 million first-lien 2024 Warehouse Facility agented by Powerscourt Investments 50, LP — the spine of an approximately $209 million prepetition capital stack that also included an unperfected $9 million subordinated NRNS Note. Heiser was terminated for cause on August 6, 2025, and the resulting liquidity shortfall left the debtors unable to cover investigative, legal, and advisory costs, prompting the December 22, 2025 Chapter 11 petitionsDkt. 1.
Inside the cases, the debtors moved quickly to monetize the platform: an $8 million delayed-draw DIP term loan from ReadySett LLC was authorized on an interim basis on December 31, 2025 (initial $2 million draw) and finally on January 21, 2026, and the § 363 sale of substantially all assets to ReadySett closed on March 3, 2026. With the operating business divested, the estates pivoted to a liquidating resolution through a combined disclosure statement and Chapter 11 plan of liquidation filed April 30, 2026, which remains unconfirmed, with recovery percentages for the roughly $166.5 million, 31-claim unsecured creditor body still carried as placeholders.
The immediate fulcrum is the July 22, 2026 hearing, where interim disclosure-statement approval and the Heiser arbitration dispute are both teed up, while the compensation cycle continues through the second interim fee application of administrative advisor Epiq Corporate RestructuringDkt. 486 (objection deadline July 6) and the combined monthly application of UCC financial advisor Sonoran Capital AdvisorsDkt. 489 (objection deadline July 1).
