Hair pulling.(Whispers)

Last week, the United States' trustee handling the Chapter 11 bankruptcy of J.M. Products Inc. of Little Rock asked the bankruptcy judge to dismiss the case or convert it to a Chapter 7 liquidation.

And if that doesn't happen, the trustee wants another trustee to come in and run what is one of the largest manufacturers of ethnic hair care products in the world.

The motion filed by trustee Nancy J. Gargula, through her trial attorney, Patricia Stanley, said that J.M. Products' filing contains several missing documents and discrepancies involving financial reports.

The "deficiencies and inconsistencies demonstrate an inability to keep competent financial records," the motion said. "In addition, the failure raises concerns about the ability of current management to administer the financial affairs and operations of the debtor and to act as fiduciaries of the corporation."

To make matters worse, one of the company's bankruptcy attorneys, James E. Smith Jr. of Little Rock, asked last week to withdraw from the case.

"Differences have arisen between" J.M. Products and Smith "which render it impossible for Counsel to effectively advise the Debtor in its Chapter 11 case," Smith's motion said. U.S. Bankruptcy Court Judge James Mixon allowed Smith to walk away.

The motion on the status of Chapter 11 is pending.

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