HAMPTON - Creditors of the bankrupt Foss Manufacturing are asking a bankruptcy judge to give them permission to prosecute claims on behalf of the estate. Gaining permission would allow the committee of creditors to file lawsuits against former Foss officials who it alleges committed fraud related to company finances.

Creditors are requesting judge Michael Deasy approve an agreement signed between the committee and the trustee overseeing the company on March 8.

The agreement states the committee shall be empowered to prosecute certain claims on behalf of the estate.

Details on the claims, including who may face potential lawsuits, were not made public, but they arose during the investigation into fraud committed by certain former officers.

A hearing on the matter is scheduled on Thursday.

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

Creditors stated in a court document that they think "Foss was experiencing financial distress dating back many years."

And they think the company "may have engaged in a pattern of questionable financial transactions."

Creditors claim a preliminary investigation shows Stephen Foss was using company money as his "personal piggy bank." They said company money was used to pay for home improvements, club memberships and use of the company's private jet.

They allege $180,000 in company funds was used for improvements to the home of Foss' daughter, Jenifer Smith. In the year before bankruptcy, the company also made more than $150,000 in payments on American Express cards to Foss' daughter and former chief financial officer Kevin Sexton, they said.

Foss resigned from the company in August after allegations of fraud came to light.

According to court documents, Foss denied any wrongdoing and said his name would be cleared if a suit were filed against him.

In its recent motion, the committee stated it has made significant progress in its ongoing investigation and is preparing to expand the investigation.

"To the extent the committee uncovers valid cause of action, it believes that it should be prepared to bring suit in an expeditious manner," stated lawyers for the creditors on why they wanted the judge to approve the agreement.

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

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