Bankrupt Duralite's owner ordered to repay bad checks

October 23, 1990|By Raymond L. Sanchez | Raymond L. Sanchez,Evening Sun Staff

The owner of bankrupt Duralite Truck Body & Container Co. has pleaded guilty to charges of writing bad checks and has been ordered to pay more than $11,000 in restitution to workers left holding bounced paychecks and unpaid medical bills.

The plea agreement gives John F. Smith 18 months of unsupervised probation. Smith will have no criminal record if he successfully completes the terms of his probation.

Smith, 52, of the 900 block of Rolandvue Ave., Towson, entered his plea before Baltimore Circuit Judge Kenneth Lavon Johnson yesterday, as nearly 40 former employees of the southeast Baltimore plant packed the courtroom and protested the sentence as a wrist slap.

One worker shouted, "Lock him up!" Another blurted a profanity when defense lawyer Stephen Goldberg blamed Duralite's demise on an "economic downturn."

Charged with 22 counts of writing bad checks and three counts of felony theft, Smith faced a potential prison sentence of at least 45 years. As part of the agreement, the theft charges were dropped.

Earlier yesterday, Smith was ready to plead guilty to bad-check charges and pay $7,903 in restitution when the judge refused to accept the deal. Johnson demanded that the restitution include premiums for the workers' health and life insurance. "You can't do it that way," the judge said.

Lawyers for both sides returned hours later and said they had agreed that Smith would pay $11,060 in restitution. But the workers gathered in court yesterday, represented by the United Electrical Workers Union Local 122, lashed out at prosecutors and called the amount of the restitution inadequate.

"I want him put in jail," union organizer Peter French told prosecutors as they left court. "You guys are supposed to be representing us."

The criminal charges against Smith stemmed from the last three months of Duralite history -- October through November of 1989 -- when paychecks bounced and premiums to the CareFirst health maintenance organization and Liberty Mutual Insurance went unpaid even though deductions were made from workers' wages.

After 42 years in business, the small firm that manufactured truck bodies filed for protection from its creditors under the federal bankruptcy laws on Jan. 16.

Goldberg said in a statement that Duralite was dependent on its lenders for financing. The bank cut the ailing company's credit during a "recessionary economic climate," he said, resulting in the bounced checks.

"Jack Smith was simply trying to pursue the American dream of running his own business," Goldberg said, "but difficult economic times and tightened credit destroyed his dream."

Some of the workers who came to court yesterday also spoke about shattered dreams.

John Johnson, for instance, told of the auto accident he had in November 1989. He mistakenly thought his medical insurance would take care of the $30,000 hospital bill for some broken ribs and a punctured lung.

"Smith hurt a lot of families who nearly got thrown out of their homes and got their gas and electricity shut off," said Robert Simpson, president of Local 122. "It's ridiculous how the system works. There are two sets of laws in this country: one for the wealthy and one for the poor."

Union officials said they are planning a civil suit against Smith.

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