Melissa Bailey File Photo
Michael J. Daly took over the keys to the Lehman Brothers in December 2008.
When the government appointed Michael J. Daly to take over a legendary printing press that had fallen into bankruptcy court, he used the position to pocket over $11,000 from the folded company.
Daly, 54, of West Simsbury, pleaded guilty to that offense Tuesday before Judge Alvin W. Thompson in U.S. District Court in Hartford. He waived his right to indictment and pleaded to to one count of embezzlement by a court officer, according to U.S. Attorney spokesman Tom Carson.
Lehman Brothers, a New Haven institution at 191 Foster St., closed its doors on Dec. 5, 2008, when it converted from Chapter 11 to Chapter 7 bankruptcy. Plans are now under way to convert it into housing.
Daly, who was appointed trustee of the estate, knocked on the door of the plant on Dec. 9, 2008 and announced to workers that the plant must close. Then he oversaw the liquidation of all the equipment inside, and began the process of putting the property out to bid. The case was later taken over by trustee Richard Coan.
As trustee, Daly was responsible for closing the company’s “Debtor-in-Possession” account, or “DIP.” That account was supposed to be closed, but Daly left it open until June 29, 2009, according to Carson.
In that six-month period, “the account was credited with 10 customer deposits for completed print jobs, for a total of $11,584.31. In January and February 2009, DALY made four unauthorized withdrawals from the DIP account in the total amount of $11,100,” Carson wrote in a press release.
Daly withdrew the money in the form of a bank check, the deposited it into his own business account or converted it into cash. The money ended up in his personal bank accounts for personal use, Carson said.
As a condition of his guilty plea, Daly agreed to “surrender his license to practice law.”
His sentencing is set for September 28, 2011. Daly faces up to 10 years in prison and a fine of up to $250,000.
Past stories on the Lehman Brothers closure:
• Factory Zone Change OK’d
• How About Some Coffee With Those Condos?
• Art Teachers Feast At Shuttered-Factory Sale
• Surprise Bidder Snags A Piece Of History
• Shuttered Lehman Bros. Plant Has A Future
• Rescue Effort Blocked
• White Knight Proposes Lehman Bros. Rescue
• State Steps In To Help Laid-Off Workers
• Booted Workers Seek $180G In Unpaid Benefits
• New Haven’s Lehman Bros., Too, Goes Belly Up
"Swindling" Lehman Brothers?? Isn't that an oxymoron?