Zeek Rewards News: Receiver’s Zeek Liquidation Plan by Phillip Young What It Means For You “Zeek Victim” or “Zeek Winner”

Phillip Young, is an attorney with a strong background in working with receivers, and fully understand the system. You can learn more about Phillip Young and his law firm by clicking here. 

Attention: Do Not Contact Phillip Young unless you have received a Voluntary Subpoena Packet from Kenneth Bell, Zeek Rewards Receiver. 

Phillip G. Young Attorney At Law

On October 8, the Zeek receiver filed what he called a “Preliminary Liquidation Plan.” In reality, it was more like an analysis of the company and a status update rather than a liquidation plan. Nevertheless, there were several interesting tidbits buried in the 26-page pleading:

• There were approximately 2.2 million users in the ZeekRewards system, 1 million of which paid money into the program.

• The receiver has recovered $293.7 million in cash for the Zeek receivership estate, plus he has seized two commercial properties in North Carolina which Zeek owned free-an-clear. The value of this real estate is unknown.

• The receiver indicates that there is at least one foreign bank account holding an unknown amount that has not been seized.

• The receiver has disbursed approximately $56,000 for ordinary operating expenses (such as payroll, utilities, taxes, etc.) and he anticipates distributing another $922,000 for operating expenses incurred by Zeek prior to the receivership. This does not include the expenses of the receiver or his legal counsel, which will be very significant.

• Since the receivership began, the receiver has attempted to deposit over 60,000 payments from Zeek investors, totaling approximately $100 million. Almost 20% of those attempted deposits were dishonored by the banks, primarily because the check makers issued a stop payment on them. The receiver reports in his update that, with court authority, he is re-presenting these checks for payment and expects all banks to honor those checks.

• The receiver made clear in his update that he will aggressively pursue legal claims against third parties, including officers, employees, participants, professionals and others who benefitted from this ponzi scheme.

• The receiver goes into some detail about his pursuit of clawback claims, against “net winners” (i.e. those Zeek participants who received more in returns than they paid into Zeek). It is clear that these clawback claims are receiving much immediate attention. (For a more complete discussion of the clawback claims, see “What does this mean for net winners” below).
The receiver’s recent update gives us some idea as to the size of the receivership, assures us that there should be assets available for distribution to creditors, and allows us a glimpse into what the receiver views as his most pressing duties. As far as what this update means, it means different things to different classes of Zeek participants.

WHAT DOES THIS MEAN FOR NET WINNERS?

A “net winner” is someone who received more money from Zeek in returns than he/she originally invested. For example, if you invested $10,000 into Zeek and received distributions of $12,000, you are a net winner on your investment. The receiver’s “Preliminary Liquidation Plan” is all bad news for the net winner.

The receiver clearly considers any positive returns on a Zeek investment to be a fraudulent transfer, and his pleading indicates that he plans to immediately pursue the return of those funds. In fact, as of the writing of this article, we believe that over 1200 demands have been sent out to net winners, with accompanying subpoenas. If you are a net winner, you should expect to receive a demand letter from the receiver with a threat of litigation.

While I have not seen the demand letter, it is likely that the receiver is demanding the immediate return of all or a substantial portion of the “return on investment” received by a net winner. Having represented receivers and bankruptcy trustees frequently, it is my experience that a receiver will begin with a very aggressive demand accompanied by a threat of litigation in hopes that he can scare a large portion of potential defendants into an immediate settlement. Often, the receiver will negotiate down from that aggressive demand.

If you receive a demand letter from the trustee, you should carefully consider your options. Should you immediately pay the trustee’s demand and avoid future litigation expenses, or should you refuse and hope to negotiate a more favorable settlement as the process unfolds? These are options you should discuss with your legal counsel, especially if you receive a demand for a significant sum of money.

WHAT DOES THIS MEAN FOR NET LOSERS?

A “net loser,” as I will use that term in this article, means someone who invested more money into Zeek than he/she received in return. For example, if you invested $10,000 into Zeek but only received distributions of $5,000 in return, you are a net loser on your investment. The receiver’s “Preliminary Liquidation Plan” provides good news / bad news for the net loser. First the bad news: If you sent a payment to Zeek which you later attempted to freeze or stop payment, chances are that your bank is going to honor that check. The receiver asked for (and was granted) approval from the court to force banks to honor dishonored checks, as many of us anticipated. If you attempted to stop an uncashed check, you should contact your bank to determine whether it has been, or will be, honored.

Now for the good news: it seems very likely that there will be significant assets available for distribution to Zeek creditors, including net losers. There is no indication that creditors will be paid in full, but the receiver has already collected nearly $300 million before what seems to be rather aggressive litigation (which could result in more assets). While the claim process has yet to be established by the receiver, net losers should begin collecting bank records, credit card records, Zeek statements, and any other documents that will assist them in proving the amount of loss they have suffered as a result of Zeek investments. After all, it will be the creditor’s duty to prove the losses he/she has suffered. If a net loser’s losses are significant, he/she might want to consider retaining legal counsel to assist in preparing the proof of claim and its supporting documentation. The receiver has offered little guidance on how or when he plans to conduct the claims process.

Source: ZeekRecovery.info

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10 thoughts on “Zeek Rewards News: Receiver’s Zeek Liquidation Plan by Phillip Young What It Means For You “Zeek Victim” or “Zeek Winner””

  1. @Andy,

    If you go to the front of the site and click on Zeek, that will take you to the documents page where we also have a couple of videos and audios. In January the Receiver will present the court with the claims process. By the end of January your brother should be able to put in his claim. Right now it looks like about 50% on the dollar. A second round of claims will come down the road after the clawback lawsuits are final.

  2. Mr. Troy

    My old brother is a net loser, he joined this Zeek program because his friend convinced him that Zeek was a “good investment” 2 months before Zeek closed down.

    He was so interested in this Zeek program because he needed money so bad to pay his children’s tuition in next year so he decided to mortgage his house at bank and used most of the money to Zeek Rewards. He thought that he could get the money back in 6 or 7 months and pay the mortgage.

    When Zeek was closed down, he was so shocked and panicked about the money but he didnt know how to take it back. He cant speak and read English. Even like that he still didnt want to tell us, his family, because he didnt wanna make us worried. But now he can’t hide it anymore because the bank give him a notice about the house.

    So Troy, what i want to know is, can my brother get his money back?

    We are not US citizen, we are from Indonesia. Do we get priority if the US government want to give the victim’s money back? And how to do it? And how long we can get the money back?

    I would appreciate if u could give us some guides, becaue we have no experience in something like this before.

    And i’m sorry if my English not too good, cause myself only know a little English.

    Thanks before,
    Best regard
    Andy Cahyono

  3. @Marla, if the cash you gave your upline was recorded in your Zeek a/c (before Zeek was shutdown), that’s is your proof you’re a net loser.

    If your upline did not send any money to Zeek on your behalf, it sounds like fraud.

  4. Thanks Troy for your quick response, yes I did pay him cash as this is how he suggested we do it to get me signed up sooner than later, and he said it would be just like a he was taking a pay out!!! Guess I’ve been had by my upline, and I know I’m not he only one he signed that way, and also his upline was doing this also!!! It just keeps getting worse, was hoping for something good to come back from all this! I signed 2 friends from work, in which there money orders were cashed a few weeks after the shut down, but I’ve have since returned their monies (out of my pocket)has I could not sleep nights knowing I got them into something that simply turned out to be nothing other than throwing away money, and for my upline that made alot of money from Zeek can tell me to bad, is very hurtful, as he was a friend also!! Thanks Troy

  5. @Marla,

    Thank you for stopping by.

    When you say there is no record. How did you pay him… cash? If you paid him in any other method than cash, then you should have a record.

    Not sure you can get any money back, but you can sure seek small claim court and see.

  6. @Kathy,

    Lord knows I fully understand that frustration. However, it is not the Receiver who just makes these decisions. There are Federal Laws he also is governed by.

    In researching this very issue, I have found that once person decides to send a check, money order, cash, certified funds etc., to purchase a product and/or service, then those financial instruments become the property of the company who will be providing those funds. If you do not receive the products and/or services you have the right to stop payment or your check, but as for certified funds, you are up a creek. If you use a credit card you can charge back the amount.

    Now, based on what the Receiver has stated, if you never made any money you may get all of your money back, that was sent in.

    Personally, I think this law is the most ridiculousness law I have ever heard of. I am not an attorney, but it seems to me, that if the company was shut down, then any un-deposited funds in the possession of the company, were in their possession under fraudulent means (based on the SEC complaint) and should have been destroyed, not cashed.

    I really do hope enough funds are recovered to pay back this class of “victim” 100%.

  7. My question is this- I “bought” if you will, VIP points from my upline, as to get earning vip points sooner than waiting for a check to go thru the mail, so in asking him if he will repay me for the vip points he sold me, his reply was…..NO, now I have no records of paying him, it was just like a pay out for him, I’ve recieved NO monies from Zeek as I joined weeks before they were shut down. Does anyone else have this problem and how will you handle it?

  8. I cannot believe that there would be any reason for the receivership to cash the Checks from “Victims” to help save “Victims” If their check wasn’t cashed than that is easy –no claim that needs filled and they were saved from this mess. We live in a crazy world when the government is going to force us to be a victim and in turn save us at the same time. Troy am I the only one who thinks this is absurd???

  9. @Gregster,

    I have been hearing this same train of thought for the last three days. I fully understand where you are coming from.

  10. I’m a net winner. I personally think it’s immoral to fight to hold onto fraudulently obtained funds, and I’m not sure how you can sleep at night fighting to keep someone else’s funds. This isn’t legitimate “investing” or the outcome of legitimate capitalism. People are still deluding themselves that somehow it’s the government that stopped Zeek. Read the facts, it’s classic ponzi through and through. So fighting to hold on to it is only a step above criminal.

    Further, of course attorneys are going to encourage us to seek legal counsel, this is ripe with opportunity for them. But the fact is the is fraudulently obtained money and no one should profit. The right thing to do is to voluntarily return the funds even if it hurts. You reap what you sow. I received a subpoena and it’s painful, but once I return the funds and settle this mess, I can have peace. I’m not judging anyone who chooses to fight, but there are many implications to that decision to consider. Everything has a price.

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