RECEIVER’S STATUS REPORT FOR THE FIRST QUARTER OF 2015
Here are a few of the high points, you can see the full Report here:
The Receiver currently maintains six bank accounts on behalf of the Receivership Estate for holding Receivership Assets: the “Affiliate Account,” the “Seized Asset Account,” the “Pre-Filing Account,” the “Settlement Account,” the “Withholding Account,” and the “Holdback Account.”
Excluding earned interest and transfers between accounts, the Receiver made the following deposits into these accounts during the first quarter of 2015:
- $1,577,043.06 into the Settlement Account from settlements with non-affiliate third parties;
- $520,250.00 into the Affiliate Account from payments from various financial institutions relating to previously dishonored cashier’s checks, teller’s checks, official checks, and bank money orders.
As of March 31, 2015, the Receivership Estate held approximately $91.3 million in the Affiliate Account, approximately $89.3 million in the Seized Asset Account, approximately $293,000 in the Pre-Filing Account, approximately $6.3 million in the Settlement Account, $0 in the Withholding Account, and approximately $1.1 million in the Holdback Account.
The Receiver Team is awaiting a ruling on its Motion for an Order Directing NxSystems to Turn Over Receivership Assets and/or Find them in Contempt of the Court’s Order Freezing Receivership Assets regarding the approximately $9 million outstanding.
During the first quarter, the Receiver Team continued litigation against Preferred Merchants and Jaymes Meyer to recover the approximately $4.8 million they improperly transferred and failed to return in violation of the Freeze Order.
One property in the Turks & Caicos Islands has been frozen, and the Court has issued an order directing that it be transferred to the Receiver. The estimated value of this property is believed to be over $2 million. In addition, Mr. Meyer agreed to a lis pendens upon California real property that he purchased with Receivership Assets for over $400,000.
With respect to Solid Trust Pay, the Receiver Team has issued a demand to Solid Trust Pay for approximately $1.6 million in outstanding Receivership Assets and is awaiting additional information from Solid Trust Pay to evaluate its response to the Receiver’s Demand.
Litigation in the SEC Enforcement Action
The Receiver Team litigated the following matters in the SEC Action:
- The Receiver Team filed a response brief in the Fourth Circuit Court of Appeals regarding the Belsome movants’ appeal of the striking of attorney charging liens.
- The Receiver Team continued litigation seeking the return of Receivership Assets from NxSystems.
- The Receiver’s conflicts counsel filed a Motion for Order to Show Cause or Turn Over Receivership Assets Against Compass Bank.
- The Receiver team continued litigation to recover Receivership Assets from James Meyer and Preferred Merchants Solutions, LLC.
To date, almost 121,000 Affiliate claimants have accepted their claim determinations and have been or will be issued a distribution in the near term. The next distribution date for claimants who have not already received a distribution is April 30, 2015. . However, in excess of 50,000 Affiliate claimants have failed to respond to their claim determinations. Each claimant is required to act further if they would like to receive a distribution from the Receivership Estate. Failure to act further may eventually cause a claimant to forfeit the distribution.
The Receiver contacted each of the Affiliate claimants who failed to respond to their claim determination to request that such claimants respond to the claim determination by April 15, 2015 and notified them that, pursuant to authority granted by court order, they would be deemed to have accepted their claim determination if they failed to respond by that date.
Approximately 1,800 Affiliates have objected to the claim determination issued by the Receiver Team. The Receiver Team is continuing to address these objections in an effort to resolve such objections before intervention by the Special Master or the Court would be needed. The Receiver Team has been successful in resolving the majority of these objections to date.
Along with the Status Report are 2 Exhibits detailing financial information. Exhibit A and Exhibit B