Details of Matt Lloyd’s MOBE settlement + updates
Following “lengthy negotiations” between Matt Lloyd McPhee and the MOBE Receiver, a settlement was reached a few months back.
In a September 6th court filing, the Receiver has now revealed details of the proposed settlement.
As per the settlement, Lloyd (right) will surrender a number of offshore assets tied to MOBE to the Receiver.
First Apartment in Kuala Lumpur, Malaysia
Matt Lloyd owns a number of apartments in Malaysia through his company CAIF Hong Kong.
Lloyd is currently under contract to sell the first apartment to a third party.
Under the terms of the settlement, ownership of the first apartment will be transferred to the Receiver.
The sale will go ahead for no less than 620,550 MYR (~$148,000 USD). All expenses in relation to the sale are to be covered by McPhee or the buyer.
If the apartment sells for more than the amount above, 40% of the additional amount will be kept by the Receiver.
The rest will go towards MOBE’s Malaysian tax liabilities and/or its accountants.
Of the amount ultimately paid to the Receiver as a result of the sale, $35,000 will be paid to Lloyd’s US attorney.
Lloyd will have 45 days upon order of his settlement to complete the sale. This period can be extended by the Receiver at his discretion.
If the sale falls through and no extension is sought, the Receiver is free to sell the first apartment and retail the full sale amount.
Second Apartment in Malaysia
Matt Lloyd’s second apartment in Malaysia is also owned through CAIF Hong Kong.
The settlement identifies the apartment as Lloyd’s primary residence.
Under the terms of the settlement, the second Kuala Lumpur apartment will be turned over to the Receiver.
Lloyd retains exclusive rights to purchase back the apartment for 70% of the amount he originally paid for it ($136,930.50).
This amount is locked in for 120 days from the date settlement is approved.
After which, the buyback price of the apartment increases as follows:
- $146,711.25 if bought back between 121 to 165 days;
- $156,492 if bought back between 166 to 210 days;
- $166,272.75 if bought back between 211 to 255 days;
- $176,053.50 if bought back between 256 to 270 days.
If McPhee fails to buy back the apartment within 270 days and no extension is sought, the Receiver is free to put the apartment up for sale.
The Fiji Resort
Matt Lloyd has a partial ownership interest in the Serenity Island Resort Hotel.
The hotel is located on Serenity Island, Fiji.
The hotel is on leased land owned by another company. The lease has been mortgaged to secure a loan.
The loan amount is currently $6.6 million FJD (~$3 million USD).
Through a series of shell companies, the lease is ultimately held by a company owned by Lloyd and former MOBE employee Athat Rashan.
Serenity Island Resort Hotel was purchased to hold MOBE events at.
After the FTC shut MOBE down,
the business model for the Fiji resort hotel was not viable because the resort was no longer used to host MOBE live events.
Instead, (the resort) has attempted to operate as a conventional resort hotel, but with only 23 operational villas its income-generating potential is limited.
Moreover, McPhee has reported that its former General Manager, Brad Hall, and the accounting staff for the hotel, embezzled money from the hotel, leaving it in poor shape financially.
Under the terms of the settlement Lloyd will transfer his interest in the resort to the Receiver.
Lloyd reserves the right to purchase the his interest in the resort back from the Receiver for 270 days.
The amount Lloyd will pay is contingent on how soon he opts to buy back pending settlement approval.
- $400,000 is bought back within 150 days or
- $450,000 if bought back between 151 to 270 days.
During the 270 day period Lloyd is responsible for upkeep of the resort.
He’ll also have to file written reports with the Receiver regarding the status of the resort every two weeks.
If Lloyd fails to buy back the resort within 270 days, the Receiver retains the right to put it up on the market.
The Costa Rica Resort
Matt Lloyd owns a 49 percent interest in Sunset del Mar Investments S.R.L., which in turn owns Mar y Tierra del Oeste M.T.O, S.A – both shell corporations in Costa Rica.
Mar y Tierra owns a lease, or concession, of beachfront property, located in the “Maritime Zone,” or a 200 meter strip starting from the average high tide line, on the Pacific Ocean on which is located the Sunset del Mar resort hotel.
Like the Serenity Island resort in Fiji, the Costa Rica Resort Hotel was used by MOBE to host live seminars, and like Serenity Island it suffered a marked decline in revenues when the Receiver shut down MOBE’s operations.
The resort is located in a remote area and thus is difficult to access.
The Costa Rica Resort Hotel’s financial records show that it is losing money and not being operated prudently, due to a lack of funds.
Under the terms of the settlement, Lloyd will transfer his ownership stake in Sunset del Mar Investments.
Upon settlement approval, Lloyd will be able to buy back his stake for $250,000 within 270 days.
If Lloyd buy back within 180 days, the buyback price is reduced to $225,000.
During the 270 day buyback period, Lloyd is responsible for management and upkeep of the resort.
As with the Fiji resort, he’ll also have to provide the Receiver with written reports every two weeks.
If Lloyd doesn’t buy back the resort within 270 days, the Receiver is free to list it on the market.
MOBE is currently owed ~$145,000 and ~$11,000 in tax returns from the Malaysian and Australian governments respectively.
Under the terms of the settlement $140,000 from the Malaysian refund will be paid to the Receiver.
Lloyd will keep the next $10,000. Any amount over that will be split 60/40 in favor of the Receiver.
A global cap of $50,000 will be applied to the amount Lloyd can receive.
The full amount received from the Australian tax return will be paid to the Receiver, $1500 of which will be paid to accountants.
Matt Lloyd’s settlement proposal was filed on September 6th and awaits approval.
For the benefit of the court, one question addressed in the proposed settlement is whether Lloyd will be able to execute any of the buyback options.
One concern, of course, is that if McPhee is surrendering all of his assets derived from the proceeds of MOBE’s operations, as is required under the Preliminary Injunction, he will be in no position to exercise the purchase options granted to him under the proposed settlement.
McPhee, however, believes that he can obtain financing or outside investment to help him fund these purchases.
I can understand why Lloyd would want to buy back his primary residence in Malaysia, but the other assets?
MOBE is over so what’s the point of setting up resorts that have no benefit outside of the now shutdown opportunity?
As the Receiver notes in a separate update report;
Both of the resort hotels were intended to serve the MOBE empire.
Both were used to host seminars, at which MOBE presenters furthered the MOBE scheme by trying to “upsell” the various memberships, plus other add-ons, to consumers.
For that reason, the market for customers for the resorts was MOBE affiliates, and the resorts never seriously tried to attract
other customers who were not MOBE affiliates.
When I shut MOBE down, the resort hotels’ source of customers dried up entirely.
This is evident from the financial records I have reviewed,
which show that both of the resort hotels are losing money.
Attracting new customers would require a new marketing program.
Moreover, to make the resort hotels profitable would require capital infusions.
Serenity Island, for example, is obligated to construct 205 villas on the beach by 2023, or else it could lose its lease of the land on which the resort sits.
Presently, Serenity Island has 23 operational villas.
If the additional villas are not completed timely, the underlying lease of the property could be terminated, which means that the entire resort would be lost.
While the receivership estate has approximately $17 million, I am not prepared to use it to construct hotel rooms in Fiji.
Also, it is not clear to me that the resort hotels have any significant value.
Both are losing money and, in my opinion, will continue to lose money until significant money is invested in them to improve them and market them properly.
The Receiver also discloses in the report that he is unaware of any criminal proceeds against Steven Bransfield.
A few weeks back Bransfield, a former top MOBE earner, disclosed in bankruptcy filings that he was the subject of an FTC investigation.
According to Bransfield’s filings, the FTC are going after him for $9.4 million dollars.
Also noted in the filings is $450,000 in declared assets, that are currently frozen as part of the FTC’s MOBE lawsuit.
Regarding the $450,000, the Receiver writes;
(The $450,000) pertains to funds that were in the possession of a company called Wealth Building Technologies, LLC, which was created and operated by Russell Whitney, Jr. (Mr. Bransfield claims to be a one-third owner of Wealth Building Technologies).
The $450,000 he references was money in a bank account that Russell Whitney agreed was related to the MOBE scam, and that therefore was properly part of the receivership estate.
I have those funds.
It is not clear whether Mr. Bransfield intends to try to cause me to pay anything to him; what is certain is that I will not do so voluntarily.
Pending approval of Matt Lloyd’s Receiver settlement, stay tuned…
Update 26th November 2019 – Brad Hall has been in touch to challenge Matt Lloyd’s assertion that he embezzled funds from Lloyd’s hotel.
I’m writing you this letter to bring it your kind attention that there has been an error and non factual interpretation of matters sited in your document related to MOBE and Mr Mathew Lloyd McPhee.
I noted my name being mentioned as a responsible party engaged in embezzlement during my time consulting to Kadavulailai Development in Fiji at Serenity Island Resort.
I would like this matter corrected as it has further reaching impact on my profession as a hotelier.
I was contracted by both Sunset Del Mar and Serenity Island Resort as a consultant to assist in setting up the hospitality requirements for both resorts.
The facts of the embezzlement case can be confirmed by the company attorney firm in Fiji Nadi.
Serenity Island Resort (Kadavulailai Development) was pursuing an investigate investigation involving miss appropriation of funds against an individual in the Serenity Island Resort accounts department, who had been employed at the company for sometime and prior to my engagement and arrival at the resort (April 2018).
The internal matter required legal consultation as the amount under investigation amounted to around FJD 214000,00 in food invoices, construction items that had never arrived at the island but had been procured by the individual.
I was the lead on the internal investigation at the time and left the resort after being pressured from Mr Athar Roshan into lying to creditors on the financial health of the resort.
The documentation, notes and detail on the investigation can be obtained via the attorney I was consulting with on behalf of Kadavulailai Development : Cecille Sanchez – (contact details removed)
I was no longer prepared to consult to the business under the strained conditions both financially and morally. .
In the month of May 2019 matters with ITLTB and other creditors had deteriorated.
I was being asked to lie about funds to the contractor (Fletchers ) and to various other on board consultants and operational creditors about funding and payments due.
I was also called in by BSP the banking institution (who old the loan to verify if funds were in fact available to service the loan).
In various communication with Mr Roshan, I made it abundantly clear that the resort would never be profitable unless more units were developed.
I notified both Mr Mcphee and Mr Roshan in writing, that I would serve only 1 month further, issued to both in May 2019 and after the month I left the resort in early June 2019 as I could no longer tolerate the tension that had developed between myself and with Mr Roshan around required to manage the resort operations to keep the business alive daily and honour guests requirements and forward bookings.
I have been professional involved in hotels,resorts and tourism developments for over 23 years… I know my skill and I know hospitality as a business, both products were badly structured businesses and with out considerable capital would never be financially viable.
We’ve recommended Hall contact the Receiver if he wishes to pursue the matter further.
Update 9th January 2020 – Matt Lloyd’s settlement with the Receiver was approved on December 19th.