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Kern Services goes to court Jan. 13

Company wants OK on planned sales of Medford, Grants Pass funeral homes

Kern Family Services has a Jan. 13 date in U.S. Bankruptcy Court, the next step in the death-services company's effort to reorganize and settle questions about millions missing from a trust fund.

The initial report from a mediator confirmed that $4 to $5 million is missing from a pre-paid funeral services trust fund administered by Kern Family Services, a company spokesman said Monday.

Kern Family Services, which filed its Chapter 11 reorganization plan last month, runs the Perl group of funeral and burial services and similar businesses in Grants Pass.

The company, which is managed by Foresight Analysts of Phoenix, Ariz., plans to sell all of its Rogue Valley death businesses to cover the missing funds.

The 3,600 pre-paid customers who contributed to the trust fund were mailed a copy of the initial reorganization plan and should be receiving an updated version soon, Foresight President Dan Isard said.

There are offers in place to buy both the Medford and Grants Pass businesses, but court approval is needed for both sales -- something Isard hopes will come at the Jan. 13 trial.

Stewart Enterprise, which is based in Louisiana, is set to buy the Medford companies: Perl Funeral Services, Perl with Siskiyou Funeral Home and Siskiyou Memorial Park.

But the historic Edgar Hafer House in downtown Medford won't be part of the deal, Isard said. The company wants to sell the stately building at 426 W. Sixth Street separately -- a desire dependent on the court's approval.

Kern auctioned off some equipment and furniture from the Hafer House earlier this month.

Service Corporation International, the former owner of the Perl group, is set to purchase Kern's Grants Pass companies: Hull & Hull Funeral Home, Hawthorne Memorial Gardens and Southern Oregon Cremation Services.

Foresight officials are negotiating with SCI over how much of the missing money SCI owes and how much Kern does, according to Isard. He contends that SCI failed to turn over some money that should have gone into the trust fund.

Kern Family Services is bound by court order to repay the missing money. The sales are expected to more than cover the money needed to replenish the fund.

Questions about where the missing money went and whether David Kern, who headed Kern Family Services before Isard's firm took over, misappropriated it remain unresolved.

The Oregon attorney general's office is looking into the matter but isn't expected to conclude its investigation until after the business matters are settled.