Last night’s public call where Rex Venture Group LLC., receiver Kenneth Bell answered the hard questions sent in by former Zeek Rewards affiliates (net losers and net winners), clarified the myths from the facts in the case. Instead of recreating what others have already written, I have included three different sources from the call.
UPDATE 5:18 p.m. A claims form for victims should be ready by the end of January, Bell said. It’s doubtful that victims can be made 100 percent whole.
UPDATE 5:21 p.m. There are some sad, Zeek-related stories of loss out there. Bell said he had emails from people who’d lost anywhere from $49 to $10,000.
UPDATE 5:25 p.m. Bell said some people have questioned whether he is dragging out the receivership to drive up legal fees. He asked listeners to trust him, and he denied foot-dragging. His “goal is to be the most cost-effective receivership in history,” Bell said.
UPDATE 5:33 p.m. Bell said he did not know if other people will be charged by authorities in connection with Zeek. (Zeek/Rex operator Paul R. Burks is the only person charged to date — civilly by the SEC.)
He added that he’ll be prepared to prove Zeek was a Ponzi scheme as he pursues winners in clawback litigation. A motion by Zeek winners to appoint attorney Michael Quilling examiner was “absurd,” he said. He did not reference Quilling by name.
UPDATED 5:44 p.m. Zeek’s database “is a real mess,” Bell said. He is studying a means by which victims could gain access to their back offices to gain access to information, but such a capability could be cost-prohibitive.
Read Patrick Pretty’s Full Editorial Here!
- a proposed claim form will be submitted to the Court the end of January; people should begin accumulating their records for the upcoming claims process
- Mr. Bell said he would like to have a Preliminary dispersal of funds as soon as the claims process begins and determinations can be made regarding records file vs money requested; this will have to be approved by the Court
- He mentioned getting affiliates access to their back offices, the database is a mess and will have to be restructured; he is trying to get this done but with accurate information available; Zeek/Rex Ventures didn’t keep very good records
- Clawbacks are coming soon; also mentioned several affiliates are cooperating and returning money to the Receiver
- he thinks the Motion to appoint Examiner is absurd, conflict of interests since he represents 100′s of net winners
- Briefly mentioned the motion filed to Dissolve the receivership, hopes the Judge doesn’t allow it
- Someone asked about bids purchased but not used; Also said that Zeek is not coming back, ever! Read Don Ryan’s Full Editorial Here!
One of the most popular topics was the establishment of a claims process in which investors could eventually be permitted to receive distributions based on their loss amounts. Mr. Bell stressed that he is working strenuously to institute a claims process, which would first require the submission of a proposed claim form and procedure to United States District Judge Graham Mullen. According to Mr. Bell, he has set an internal deadline of submitting this information to Judge Mullen by January 31, 2013. Once the claims form and procedure receives court approval, the claims form will likely be posted to the website and distributed to victims, who will have until a court-imposed deadline by which to submit relevant requested information. The claim form will also specify what proof is required to substantiate claims. Upon the approval of claim forms and submission by victims, Mr. Bell also indicated his preference to proceed with an ‘interim’ distribution rather than waiting to make one final distribution at the end of the Receivership.
Another popular topic was the issue of “clawbacks” against those ‘net winners’ that were fortunate enough to profit off their investment by withdrawing funds in excess of their investment. The Receiver sent out a first wave of 1,200 subpoenas to those ‘net winners’ that were deemed to have profited most off Zeek. According to Mr. Bell, “scores” of investors responded in a cooperative manner seeking to pay back their false profits. However, a “whole lot” of recipients have fought back against the requests for information. If the Receiver is not able to reach an amicable resolution with each clawback target, he will likely proceed with the filing of a lawsuit. The Receiver took steps last week to ensure that he may properly bring clawback lawsuits in various federal districts around the United States by filing a copy of the SEC Complaint and the Order Appointing Receiver in districts where clawback suits are likely under 28 U.S.C. 754.
Mr. Bell also addressed the various recent filings that have sought to both contest his authority as receiver and challenge the SEC’s decision to shut down Zeek in the first place. This included the filing by Fun Club USA of a motion seeking the appointment of an examiner, as well as a filing by several clawback targets seeking to dissolve the Receivership. Mr. Bell saved his harshest words for these efforts, calling them “absurd” and disputing their accuracy. As to the motion for appointment of examiner, Mr. Bell pointed out (as Ponzitracker did here) the inherent conflict of interest that would present itself since the nominee for examiner currently represents “several hundred net winners,” as well as the implications of paying such an examiner our of receivership funds. Mr. Bell also indicated he will oppose the motion seeking the dissolution of the receivership, saying that the “receivership is here to stay,” and represented the only and best way to make victims whole. Read Jordan Maglich’s Full Editorial Here
Kenneth Bell’s team before & during the call filed the following Court Documents…
Consent MOTION for Extension of Time to File Final Liquidation Plan by Receiver for Rex Ventures Group, LLC.Responses due by 1/7/2013 (Attachments: # 1 Proposed Order)(Bell, Kenneth) (Entered: 12/17/2012)
RESPONSE in Opposition re 77 MOTION to Appoint Attorney ad Litem /Examiner for Affiliates by Receiver for Rex Ventures Group, LLC. Replies due by 1/2/2013 (Attachments: # 1 Affidavit of Kenneth D. Bell and attachments, # 2 Exhibit B through E)(Bell, Kenneth) (Entered: 12/17/2012)
Securities & Exchange Commission filed today December 19th, 2012…
RESPONSE in Opposition re 77 MOTION to Appoint Attorney ad Litem /Examiner for Affiliates by Securities and Exchange Commission. Replies due by 1/2/2013 (Bowers, John) (Entered: 12/17/2012)