HENRY COUNTY— Jack’s Donuts of Indiana Commissary LLC has filed for Chapter 11 bankruptcy, according to documents filed October 29 in the U.S. Bankruptcy Court for the Southern District of Indiana.
WRTV Investigates has been telling you about civil lawsuits and judgments against Jack’s Donuts CEO Lee Marcum and businesses connected to him.
In October 2023, Jack’s Donuts opened a production and distribution center in New Castle called the commissary.
A website for Jack’s Donuts is no longer working, but WRTV Investigates reported earlier this year that the company had 24 locations and 14 franchisees.
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Chapter 11 is a type of bankruptcy that allows a business to reorganize its finances under court supervision, rather than liquidating assets entirely.
“Typically, there will be an effort to make the business more effective,” said Nicholas Georgakopoulos, a business law professor at IU McKinney Law School in Indianapolis. “So there will also be a reorganization of the business. Reorganization should be thought of mostly as a reorganization of ownership and debt. It might be that only the obligations and the ownership change.”
WRTV Investigates has reached out to Marcum and his bankruptcy attorney for comment on the filing and what this means for the company. We are still waiting to hear back.
The bankruptcy filing says Jack’s Donuts of Indiana Commissary has more than 100 creditors and $14.2 million in liabilities.
It says Jack’s Donuts of Indiana Commissary LLC has more than $1.4 million in total personal property assets.
The creditors include businesses that have existing judgments, including trucking company Carter Logistics which filed a lawsuit alleging they were not paid for donut deliveries.
The filing also listed a $3.5 million judgment in favor of Old National Bank.
Angi Bone, a former franchisee, is also listed as a creditor with a claim of $40,000.
WRTV Investigates spoke with Bone earlier this year when she operated the Fishers and Gas City locations for Jack’s Donuts.
Bone has since renamed her business Boomtown Donuts.
Marcum Industries, another business connected to Marcum, also filed for Chapter 11 bankruptcy on October 29.
As WRTV has reported, the Indiana Secretary of State’s Securities Commissioner issued a cease and desist order to Marcum aimed at preventing him from offering and selling securities to investors.
Financial securities typically refer to an investment such as a stock, bond or note.
“A financial security is an instrument that provides investors claims on future cash flows,” Steven Sibley, an associate chair of finance graduate programs at the IU Kelley School of Business said.
The cease and desist order, effective May 5, alleges Lee Marcum and three of his businesses violated the Indiana Uniform Securities Act (IUSA).
It outlines two alleged violations:
- Count 1: In June 2024, Marcum and his businesses unlawfully offered an unregistered security to Investor MD
- Count 1: In September 2024, Marcum and his businesses unlawfully offered and sold an unregistered security to Investor AB.
The law requires securities to be registered with the Indiana Secretary of State unless they qualify for an exemption.
“Registration of securities in Indiana is necessary for the protection of Indiana investors,” according to the Indiana Secretary of State’s website. “Proper registration of securities offerings allows investors to have access to any and all information necessary to make informed investment decisions. The registration of securities offerings is also necessary to prevent deceit, misrepresentations, and other fraud in the sale of securities.”
The Secretary of State’s cease and desist order, which is posted in the state’s administrative action portal, was the first public document indicating the government is investigating Marcum’s business practices.
“An investigation is ongoing,” said Lindsey Eaton, Communications Director at the Indiana Secretary of State, in an email to WRTV.
The document orders Marcum and his businesses to immediately cease and desist from engaging in any act that violates the Indiana Uniform Securities Act and the Commissioner’s Administrative Orders, including the further offer or sale of securities in Indiana either directly or indirectly, through intermediaries, broker-dealers, third parties, or other persons.
“This is a very substantial development,” said Steven Sibley, an associate chair of finance graduate programs at the IU Kelley School of Business. “It would be very uncommon for companies to even try to issue unregistered securities.”
The cease and desist order named Marcum, Jack’s Donuts of Indiana Commissary LLC, Marcum Industries LLC and KCL Group Inc.
“This order is largely about protecting the public,” said Sibley. “Any member of the public is a potential investor, so it’s about protecting investors first and foremost and anybody who could buy or be sold financial securities.”
The cease and desist says the order “is in the public interest and is necessary for the protection of Indiana investors.”
Marcum has declined WRTV Investigates’ repeated requests for an interview; however, he has provided written statements.
“The stress and disruption caused by this news investigation, led by Kara Kenney, have placed an undue burden on our franchisees, employees, their families, and our investors—at a time when stability is critical to our organization,” said Marcum in an emailed statement on June 3. “We want to be clear: our leadership team is fully engaged in managing our company. Engaging with the media on this matter is not something we are prioritizing at this time, nor is it a distraction we can afford. We will not be providing any comment on internal matters.”
WRTV’s offer to interview Marcum still stands.
