FlexShopper Inc., a publicly traded provider specializing in lease-to-own financing for various consumer products such as appliances, electronics, and furniture, has filed for Chapter 11 bankruptcy protection in Delaware. This significant development comes months after the Boca Raton, Florida-based firm terminated its chief executive officer following an extensive internal investigation that uncovered fraudulent activities within the company.

According to court papers filed on Monday, FlexShopper has disclosed assets totaling at least $50 million and liabilities exceeding $100 million. The company is currently considering an offer to sell its business to an affiliate of Snap Finance, another prominent lease-to-own provider. This offer is structured as a "stalking horse" bid, meaning it sets a baseline for the sale and remains subject to potential better offers at a future bankruptcy auction.

The bankruptcy filing directly follows the termination of former CEO Russell Heiser in August. An internal investigation, initiated after a member of FlexShopper’s finance department raised concerns with the company's board of directors, concluded that Heiser had allegedly provided the company’s auditor with forged documents to support loan receivables and revenues. Furthermore, FlexShopper’s Chief Restructuring Officer Matthew Doheny stated in court filings that Heiser was also accused of "pledging collateral that did not exist or meet the eligibility requirements" under one of the company’s lending facilities.

As a direct result of these findings, FlexShopper announced in July that its previously issued financial statements could no longer be relied upon. The company, known for its proprietary process that quickly provides customers with payment terms and spending limits for a range of consumer items, now faces a challenging path forward through the bankruptcy process. The case is officially listed as FlexShopper Inc., number 25-12254, in the US Bankruptcy Court for the District of Delaware.