Joele Frank Wilkinson Brimmer Katcher settle with TelexFree Trustee
Joele Frank Wilkinson Brimmer Katcher (Joele Frank), a public relations firm based out of New York, has settled with the TelexFree Trustee.
Joele Frank was sued back in April as part of the Trustee’s clawback rampage.
According to the filing, Joele Frank was paid an $85,000 “non-refundable advance” by TelexFree two days before its bankruptcy filing.
Between April 11th and April 29th, 2014, Joele Frank provided $129,592 worth of services to TelexFree. About $80,000 in services was performed before TelexFree filed for bankruptcy.
In response to the Trustee’s clawback lawsuit, Joele Frank claimed
it provided its services under significant time pressure, that it had no knowledge of the existence of TelexFree’s Ponzi scheme and that it did not participate in the scheme.
Subsequent discussions between the two parties have been held, with a proposed settlement agreement reached on May 23rd.
According to the proposed agreement, Joele Frank will pay back $20,000 to the Trustee and waive a claim ‘that could amount to as much as $60,000‘.
The idea seems to be the unpaid services after the Ponzi scheme was shut down, plus $20,000 repayment roughly equates to what Joele Frank was paid minus their post-Ponzi services.
While the Trustee has raised reservations as to the value that TelexFree derived from Joele Frank’s services, Joele Frank was a third party vendor not directly involved in the Ponzi scheme and does not appear to have knowledge o the scheme.
As above, that Joele Frank didn’t participate in the TelexFree Ponzi scheme, knowingly or otherwise, is also a factor.
On June 22nd, 2016, Judge Hoffman filed an endorsed order approving the Trustee’s proposed settlement agreement with Joele Frank.
A hearing on the matter has been scheduled for July 27th, after which its expected the settlement agreement will receive final approval and be executed.
Update 28th July 2016 – The proposed settlement agreement was approved on July 27th.