Court: Owner can’t recover loans to company

A partner in an Illinois trucking firm who used company funds for his own purposes can’t recover loans he made to the hauler, the U.S. Court of Appeals for the Seventh Circuit declared March 1.

Because an Illinois state court already had decided that Hal Hicks owed Midwest Transit more than $500,000 on balance, he was barred from seeking recovery in a separate complaint of loans to the company he had made totaling more than $2.5 million.

According to the federal appeals court, the state court had found “largely uncontradicted evidence of fraud and oppressive activity” on the part of Hicks and had placed Midwest in receivership.

Among Hicks’ activities, the court had found, were spending corporate assets on car racing and keeping the prize money for himself.