Chapter 7 - Claire Discovers Ethan’s Company Is Insolvent
An independent accountant reviewed Morgan Development.
The company was not technically insolvent yet.
But it was close.
Accounts receivable looked healthy on paper.
Several customers were months late.
A large project had cost overruns.
Tax payments were current, but supplier balances were stretched.
The home-equity money had bought time.
Without new financing, Morgan Development might breach covenants within
weeks.
Ethan asked Claire to keep her guarantees in place.
She refused to answer immediately.
Her lawyers explained that terminating guarantees could have serious
consequences.
Employees depended on the company.
Suppliers were owed money.
Claire did not want revenge to become collateral damage.
She proposed a temporary standstill.
Her guarantees would remain for sixty days while the company pursued
refinancing and a restructuring plan.
In exchange, Morgan Development would appoint an independent financial
officer, freeze related-party payments, and provide full reporting.
Ethan agreed because he had few alternatives.
Margaret accused Claire of taking over.
Claire corrected her.
“I’m limiting my exposure.”
The distinction became a recurring theme.
For years, Claire quietly protected Ethan.
Now every boundary looked to him like aggression.
The new financial officer discovered something else.
Morgan Development had paid $96,000 over two years to a consulting
company called MRC Advisory.
The address belonged to Margaret.
Ethan claimed those were legitimate consulting fees.
Claire asked what Margaret consulted on.
He could not produce a contract.
Margaret said she introduced clients.
Maybe she had.
But the records were incomplete.
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The deeper they looked, the more Claire realized Margaret had been
treating Ethan’s company as a family wallet.
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