When Marketing Specialists, a subsidiary of Mary Kay, filed bankruptcy, it came as a shock to the 5500 people employed by one of the largest food brokers in the country. With more than $400 million in annual revenues, the company appeared to be sound and experiencing significant growth. In reality, the company had grown at an irresponsible rate and had been grossly mismanaged by officers and directors who had significant conflicts of interest. That mismanagement resulted in bankruptcy.
Officers, directors, and executives are fiduciaries who must always place the interests of the company and its employees above their personal interests. But the Marketing Specialists officers, directors and executives instead acted for their own financial gain. Once Marketing Specialists was in financial trouble, the fiduciaries did not act responsibly in an effort to save the company. Instead, certain officers and directors looted the company's assets by taking their former clients to Marketing Specialists' competitors and failing to safeguard the assets of the estate.. Others allowed this illegal conduct to occur by turning their heads and ignoring their duty to protect Marketing Specialists and its creditors.
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