September 23, 2025
Lighting Execs Accused of Fraud and Embezzlement
Company’s own board of directors issues serious accusations amid bankruptcy filing
In a court filing on September 20, Midstream Lighting Inc., the U.S. arm of the British sports lighting maker, began the legal process of liquidation. The Chapter 7 bankruptcy petition, entered in federal court in Ohio, marks a complete wind-down of the company’s operations. It also marks an inflection point of a much more complicated story.
The filing itself lists virtually no cash, no equipment, no ongoing projects. What it does contain is a series of rare, pointed allegations made not by angry customers or outside creditors — but by the company's own Board of Directors. In a resolution attached to the bankruptcy documents, the board accuses three former executives of serious misconduct: unauthorized financial transfers, misuse of company credentials, and the creation of an exclusive distributor that acted as a competing firm while still in charge of Midstream Lighting’s day-to-day operations.
That exclusive distributor, Athletic Lighting Solutions, is now a central figure in both the customer lawsuits and the bankruptcy allegations, with court filings on two fronts claiming it served as the improper destination for Midstream funds, projects, and customers.
These claims remain allegations. They have not been proven in court. No criminal charges have been filed. But the board's decision to publicly include them in a federal bankruptcy proceeding is a dramatic move. And an unusual one.
When Inside Lighting contacted James McCarty, one of the three former executives named, for comment on Monday, he offered a blanket denial:
“I categorically deny any allegations of wrongdoing. The claims rely on a false timeline and mischaracterize conduct during my tenure. These are the debtor’s unproven assertions in a bankruptcy filing, not court findings, and I will address them through the legal process.”
— James McCarty, former President, Midstream Lighting, Inc.
Since being contacted by us, McCarty has updated his LinkedIn profile, removing his last name (now listed simply as “James M”) and deleting references to both Midstream Lighting and Athletic Lighting Solutions from his work history.
Gail McNulty, who is currently representing herself in one of the lawsuits brought by one of the company’s former customers, did not respond. McNulty’s professional history traces a 17-year path through many corners of the U.S. sports lighting industry. Her work profile cites past roles at industry heavyweights — Musco Lighting, Ephesus (part of Cooper Lighting), Qualite, NGU Sports Lighting — before joining Midstream Lighting
We were unable to reach Don Schoen, an alleged investor and executive tied to Athletic Lighting Solutions, accused of wrongdoing and named in the bankruptcy filing.
Customer Lawsuits Began Surfacing Before the Bankruptcy
Public warnings about Midstream Lighting first appeared in court filings last month.
Above: Court exhibit shows Midstream Lighting quotation for Ellet H.S. Project
On August 20, Fargo Baseball LLC, owner of the minor league Fargo-Moorhead RedHawks, filed a federal lawsuit in North Dakota, alleging it had been misled by Midstream Lighting Inc. and Athletic Lighting Solutions. The suit claims a $235,305 deposit for stadium lighting was routed to a different bank account than expected, controlled by Athletic Lighting Solutions, and that the team was never informed it was dealing with a new entity. The RedHawks are now seeking $237,905 in repayment.
Six days later, a second lawsuit emerged in Ohio. STG Electric Services, an electrical contractor, filed suit over a project at Ellet High School in Akron, alleging it was left with more than $55,000 in unpaid invoices after equipment it ordered for Midstream was delivered instead under the Athletic Lighting Solutions name. The complaint describes the transaction as a “calculated diversion” that left the school district confused and STG uncompensated.
Internal Allegations Extend the Pattern
While the lawsuits focused on two specific jobs, the Midstream Board of Directors’ bankruptcy resolution describes a broader pattern of alleged misconduct involving additional projects and larger sums.
According to the filing:
- In Findlay, Ohio, a $49,500 customer payment was allegedly diverted to Athletic Lighting Solutions with no order ever placed — an action the board claims misrepresented the company's solvency.
- In Lincoln, Nebraska, more than $424,000 in receipts tied to a project for the Lincoln Salt Dogs baseball team were allegedly funneled to Athletic Lighting Solutions, leaving a $127,000 shortfall, unpaid vendors, and improperly pledged receivables.
None of these board-level allegations have been tested in court. But together with the lawsuits, they point to a disputed timeline in which Midstream Lighting’s U.S. operation appeared to be operating publicly — while its assets, customers, and cash flow were allegedly shifting quietly elsewhere.
Chapter 7. And the Allegations Within
The bankruptcy filing itself leaves little ambiguity about the company’s trajectory. Midstream Lighting Inc. is not seeking to reorganize. Chapter 7 means liquidation: an orderly dismantling of whatever remains.
That, too, appears limited. The bankruptcy schedules show:
- $0 in cash or cash equivalents
- No listed inventory
- No real estate
- Estimated liabilities between $1 million and $10 million
The only notable “assets” are potential litigation claims against:
- James McCarty
- Gail McNulty
- Don Schoen
- Another former employee
- Athletic Lighting Solutions Inc.
The board’s statement accuses the former executives of fraud, embezzlement, and other misconduct — from diverting funds and misusing company credentials to building a rival venture on Midstream’s dime. What remains of the company, they argue, is little more than a shell. Its main assets are potential lawsuits to claw value back.
The Parent in the Background, the Market in the Dark
Midstream Lighting Inc. operated as the U.S. entity of a larger UK-based parent, Midstream Lighting Ltd. That company is listed in the bankruptcy schedules as a creditor, owed $708,746. In April 2025 — months before the U.S. filing — the UK firm entered into a sweeping “all asset” security agreement with a British lender, UK Working Capital Limited. The charge covers receivables, intellectual property, and other core business assets.
To date, there are no public allegations against Midstream Lighting Ltd.
Meanwhile, Athletic Lighting Solutions Inc. remains legally active. Whether it is still operating in the market, bidding projects, or engaging with customers under its own name (or Midstream’s) remains unclear.
Looking Ahead
For a company once positioned as a growing player in U.S. sports lighting, Midstream Lighting Inc. now appears poised to leave behind little more than legal filings and unanswered questions. The lawsuits may multiply. The bankruptcy estate may pursue claims. But in the meantime, vendors, customers, and partners are left sifting through overlapping identities, unpaid invoices, and disappearing guarantees.
At its peak, Midstream touted its work in stadiums and its relationships with professional leagues. But the past few months weren’t a ninth-inning rally — they were seemingly a late-inning collapse. Now, its future rests with trustees, attorneys, and judges, as the legal and reputational fallout drags into extra innings.
