Click here for the previous post on the Core/Chelsea/Braafhart title insurance scandal.
The hearing set for June 14th was postponed and the Court's previous Order (June 1, 2012) has been allowed to continue in effect with certain modifications. On June 13, 2012, the parties entered into a Stipulation placing limitations on the Defendants' ability to write checks on two accounts (Defendants' other accounts remain completely frozen by the Court's June 1 Order). The title company [Stewart] that brought this action against Core and Jami Braafhart will now have certain veto power over Core's and Ms. Braafhart's daily spending. The Stipulation provides the following rules for check approval:
The procedures to process and clear checks drawn on those two accounts shall be as follows. When a check drawn on either account is presented for payment before honoring or dishonoring that check Mid Penn Bank shall first email or fax a copy of the check to Plaintiff's [Stewart Guaranty Title Company] representative . . . . .
After reviewing the copy of the check [Stewart] in [its] sole discretion shall promptly determine whether a check shall be honored or dishonored. [Stewart] shall then promptly notify Mid Penn Bank in writing (if Mid Penn Bank shall require the notice to be in writing) that a particular check shall be dishonored or honored. If [Stewart] determines that a check shall be honored Mid Penn Bank shall honor and pay the check so long as there are sufficient funds in the account to cover the amount of the check If [Stewart] determines that a check shall be dishonored Mid Penn Bank shall dishonor and refuse to pay the check . . . .
Braafhart shall be permitted to write checks drawn on the Mid Penn Personal Account to fund personal expenses (e.g. mortgage payments cell phone bills utilities automobile payments food purchases house repairs and maintenance etc.) Any check drawn on that account in excess of $ 3,000.00 shall require Plaintiff's prior written approval.The Court docket number is 12-3471. The full Stipulation is available at that docket number. All Orders and pleadings are available online. The Stipulation does not say whether there is a procedure in place to alert, in advance, vendors or individuals that do business with these Defendants that certain checks might later be disapproved by Stewart. Investigation and litigation remain ongoing.