FlexShopper, Creditors Object to Ex-CEO’s Push for Arbitration

Bankrupt lease-to-own financier FlexShopper Inc. and its creditors moved to stop its former CEO, Harold Russell Heiser Jr., from trying to force a quick arbitration of his breach of contract claims relating to his termination.

Allowing arbitration with Heiser now would violate Flexshopper’s automatic bankruptcy litigation stay protections, drain the estate’s limited resources, and distract from the company’s reorganization plan, the company told Judge Laurie Selber Silverstein of the US Bankruptcy Court for the District of Delaware on Tuesday. An unsecured creditors group joined FlexShopper’s objection.

Heiser’s fraudulent activities, including forging loan documents and misrepresenting assets, caused FlexShopper’s bankruptcy and ...