Creditors want Gainey off payroll

GRAND RAPIDS, Mich. (WOOD) - Creditors don't want Gainey Corporation owner Harvey Gainey to receive a paycheck. They are asking the court to take the CEO off the payroll.

The creditors, a group of 30 lenders who are trying to get their money back from Gainey Corporation, don't like the way Harvey Gainey is operating his business. Gainey is in Chapter 11 bankruptcy, attempting to restructure six of his companies.

Shortly before filing for bankruptcy, Harvey Gainey paid an employee $217,000 -- $55,000 of it the day before going bankrupt.

24 Hour News 8 discovered this in a document filed late Wednesday in bankruptcy court in Grand Rapids.

That employee, disbarred attorney Carl Oosterhouse, has since been promoted to chief operating officer.

Creditors who are owed $238 million from Gainey Corporation and five of its subsidiaries are objecting to owner Harvey Gainey drawing any salary.

After looking at his financial records last week, they are also questioning Gainey's business practices, saying his "actions do not appear to be supported by reasonable business judgment."

Gainey, who was paid $1.3 million last year is asking the bankruptcy judge to allow him to draw $676,000 and his No. 2 man, Oosterhouse, $650,000.

The creditors, led by Wachovia Bank, think that is excessive, and they object to Gainey's son drawing more than $170,000 a year.

They want the court to preserve the company's assets for the creditors and contend Gainey is depleting the assets by employing friends and family and paying them too much.

Last week, the bankruptcy judge allowed Gainey and Oosterhouse to receive an interim salary of less than $175,000 a year.

A hearing on a final salary decision is scheduled for Nov. 25.

24 Hour News 8 attempted to contact Gainey and Oosterhouse for comment, but was unable to reach them.