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The meeting Thursday was a standard part of the bankruptcy process. It was intended to help Sparkman better understand Castleton's finances, assets and liabilities so that he can repay some creditors.

But the Castleton case is far from typical.

It is complicated by the type of services that Castleton performed and by a blurry line between Castleton, Clifton and another Raleigh company she founded, Executive Staffing Group.

"It's like spilling water, and it keeps running," Sparkman said. "I can't tell where Castleton ends and these other entities begin."

Executive Staffing, for example, pays for a 2007 Mercedes convertible that Clifton drives. Money moved between Castleton and the staffing company.

Financial documents filed earlier by Castleton in the bankruptcy proceeding showed that Executive Staffing owed Castleton $331,415 when it filed for bankruptcy and that Clifton owed Castleton $323,003. Clifton disputed those figures Thursday. She said Castleton owed Executive Staffing about $80,000 and that Castleton owed her $2.5 million.

William E. Brewer Jr., Castleton's bankruptcy attorney, conceded that some numbers were likely flawed in the bankruptcy filings. Access to financial records has been limited because of the grand jury investigation, complicating the process.

One matter, though, became a bit clearer Thursday: Why Castleton likely skipped paying payroll taxes. Health-care costs exceeded premiums that Castleton received from clients, and that prompted a juggling act of payments, Sparkman said, citing internal communications.

Clifton said McLamb knew of that problem but that she did not.

Former clients and employees were allowed to ask questions of Clifton, who was under oath, before the session adjourned.

Robin Kegerise, a former employee, was the last. She wanted to know why Clifton had told employees that Castleton was solvent.

"I wanted it to be," Clifton said. "We were trying to be business as usual. ... I did not intentionally do something that I thought was going to bring some harm to anyone."

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