PROCTORVILLE — A federal bankruptcy court judge heard arguments today on why there should be an expedited hearing on an injunction sought against the couple who recently filed for bankruptcy protection for their Proctorville retail business.

Last week GLC Limited filed an adversary complaint against Greg and Linda Crabtree, who formed GLC Limited, the West Virginia-based corporation as a holding company for Global Liquidation, a Proctorville business that sold items purchased from other retailers.

On Feb. 28, GLC Limited filed Chapter 11 bankruptcy listing 574 creditors including Tri-State residents, businesses and government agencies as well as out of state creditors. The bankruptcy papers stated that between $26 and $29 million was owed to investors.

Besides Global Liquidation, GLC Limited operated liquidation stores in Milan, Ind., Pigeon Forge and Newport, Tenn., and Nitro, Lesage and Huntington, W.Va. GLC has also done business under the names of Dan’s Sporting Goods in Huntington, Trustworthy Hardware Store in Proctorville, Lailah’s Mini Mart and DJs Mini Market.

According to the adversary complaint, the Crabtrees, needing funds, to buy inventory solicited investors for the business.

“One or more of the very first investors in GLC invested amounts in excess of $5,400,000 in GLC at interest rates exceeding 50 percent,” the complaint said.

Those investors were asked to find more investors and were paid a commission of 15 to 20 percent of the investment they brought in. About 100 investors were found that way.

“Based upon preliminary financial analysis for the years 2007 and 2010, a disparity exists between amounts invested in GLC by the investors and the actual inventory purchases by GLC,” the complaint alleges.

In 2007 $799,000 was received from outside investors with $775,000 worth of goods purchased. In 2008, more than $12 million was invested with $2.1 million worth of inventory bought. In 2009 $33 million was invested with $5.2 million worth of inventory purchased and in 2010 $35 million was invested with $3.6 million worth of goods bought.

“Investors generally agreed to invest in GLC funds for 6 months to 1 year at interest rates ranging from 50-70 percent annum. Principal and interest were generally paid upon maturity of the note,” the complaint alleges. “As initial notes became due, GLC was required to secure ever-increasing investments from new investors. …Defendants’ investment scheme relied upon the continuous influx of additional investors prepared to offer increasing investments. The inevitable, of course, happened. While Defendants’ investment scheme rendered GLC insolvent soon after it was commenced, that insolvency deepened as GLC was required to solicit ever-increasing investments from an ever-increasing number of investors.

“Defendants’ investment scheme allowed Defendants to make substantial personal profits at the expense of GLC and its individual investors,” the complaint alleges.

The complaint seeks an order stopping the Crabtrees from liquidating or transferring their interest in the property and assets; judgment against the Crabtrees for costs, punitive damages and attorney fees; and a jury trial.

A message left at the Crabtrees’ Proctorville phone listing was not returned by press time. A man who answered the phone at Dan’s Sporting Goods said the Crabtrees no longer owned that business and he did not know how to reach them. According to court documents the Crabtrees are representing themselves.