HAMPTON -- Creditors of Foss Manufacturing are asking a bankruptcy judge for permission to investigate allegations of fraud committed by former president and CEO Stephen Foss.

The official committee of unsecured creditors not only wants to investigate Foss but his daughter, wife, and other former officers of the company who may have been a part of any wrong-doing.

The committee recently filed a motion to conduct the investigation, or what is referred to as a 2004 examination, in U.S. Bankruptcy Court in New Hampshire.

In support of the motion, the committee stated the company already admitted to financial fraud when it filed for bankruptcy in September and has a right to investigate to discover assets and unearth frauds.

The company filed for bankruptcy after its chief lender CapitalSource cut off credit, alleging Foss Manufacturing had fraudulently borrowed millions to benefit itself and the company insiders.

Stephen Foss resigned in August after allegations of fraud within the company came to light while Chief Financial Officer Kevin Sexton resigned last April.

Both Foss and Sexton allegedly signed off on borrowing base certificates.

The committee stated in court documents it already conducted a preliminary investigation where it found evidence that suggests Foss was using money from the company like a "personal piggy bank" and as a result a full investigation should take place.

Some of the transactions and transfers in question that were already uncovered by the committee include:

According to the company's Statement of Financial Affairs, from January 2001 to the bankruptcy filing Stephen Foss received approximately $1 million in payments above his salary while Sexton received $945,000. Creditors said they also found suspect salary increases of Foss and Sexton.

Company money was being spent for home improvements to the private homes of Stephen Foss and his daughter Jenifer Foss Smyth. The committee claims $180,000 was paid for improvements to the home owned by Smyth from April 2002 through June 2003 and at least $6,000 paid for improvements at Foss's home from February through April 2003.

Company money was used for club memberships and personal expenses. For example, in the period from February 2005 through June 2005, Foss Manufacturing paid membership fees for Stephen and Patricia Foss in the amount $20,585 for membership dues in New Hampshire, Florida and Bermuda clubs and resorts. It also said the company's private jet was used for personal use.

The company purchased property that was later sold to Foss Family LLC. Creditors said some of these transfers do not appear to have been made for fair market value. They also said they believe a property still being leased by the company houses an individual known as the Foss family housekeeper.

The committee is questioning the company repaying a $300,000 loan to Stephen Foss and preferred stock dividend payments to Foss family members.

A hearing on whether the creditors will be allowed to conduct the investigation will be held on Thursday.

CapitalSource Finance, which holds a $30 million claim against the company, was already granted permission to conduct an investigation at the end of December.

The Hampton-based company with 375 employees manufactures non-woven fabrics and synthetic fibers.

Currently, the trustee hired to run Foss Manufacturing during its bankruptcy is looking for potential buyers of the company.

The board of directors requested a trustee to run the company because of friction between the board and CapitalSource.