So Where’s Checkmate?
By SHERRI CRUZ
Orange-based Checkmate Staffing Inc., once one of Orange County’s biggest Hispanic-owned businesses, is no more.
Santa Barbara-based Select Personnel Services recently bought most of Checkmate after state investigators raided the company and it filed for bankruptcy reorganization last year.
Checkmate founder and former boss Luis “Lou” Perez is keeping a low profile. Sources say he may have started a new staffing business.
Checkmate specialized in light industrial and warehouse workers. It counted Staples Inc. and Home Depot Inc. as customers.
Select Personnel was the only bidder for Checkmate’s assets. It paid $5.5 million for them, though that wasn’t enough to pay off Checkmate’s debt.
Checkmate still owes about $30 million in back taxes, said bankruptcy attorney Marc Winthrop of Winthrop Couchot Professional Corp. in Newport Beach, which represented Checkmate.
The company’s problems began when the state Insurance Department and San Bernardino County Sheriff’s Department raided Checkmate’s Orange headquarters in November for alleged workers’ compensation fraud.
Checkmate settled for $7 million in back workers’ compensation insurance premiums owed to the State Compensation Insurance Fund. Part of it was paid with proceeds from the sale of Perez’s eight homes, according to Winthrop.
Winthrop said he doesn’t know where Perez is but heard he started a new staffing company.
“What typically happens in cases like this is people tend to do business in a manner that nothing is in their name again,” he said.
Stephanie Schaefer, corporate counsel for Select Personnel Services, said she’s also heard Perez has started another staffing business.
“There’s been talk,” she said.
None of the clients Select picked up in the Checkmate buy has left, Schaefer said.
“Most of them have been really grateful to have another staffing company,” she said.
During the bankruptcy, Checkmate hired turnaround consultant Crossroads LLC of Irvine, which now goes by XRoads Solutions Group. XRoads then hired Winthrop to handle the bankruptcy. Perez resigned by that time, Winthrop said.
Perez lived a lavish lifestyle. But the company owned much of what he had, Winthrop said. His Bentleys and Ferrari were leased through Checkmate. He was said to have at least nine exotic cars.
Checkmate’s workers’ compensation situation was sticky, according to Winthrop. The company couldn’t get insurance through State Compensation Insurance Fund, an insurer of last resort. So it went through a “professional employment organization,” which took on Checkmate’s workers as its own.
When a turnaround didn’t realize, Checkmate resorted to a sale, Winthrop said.
Select Personnel picked up Checkmate’s Montebello, Monrovia and Walnut offices and combined 11 others into its own. Select also gained several thousand customers, Schaefer said.
Checkmate had been one of Select’s competitors for years, she said.
“We looked at it as a good business opportunity,” Schaefer said.
