Labriola: TelexFree bankruptcy “the most awesome thing”
In the wake of TelexFree’s emergency filing for Chapter 11 bankruptcy over the weekend, Steve Labriola was once again abandoned by TelexFree’s owners and left to face the company’s affiliates alone.
Appearing telephonically on a hastily announced call and sounding more spectator than corporate management, Labriola tried to appease TelexFree affiliates with what little information he had.
There are tons of questions out there I know, and I don’t have all of the documentation back from our lawyers on the things that I can and can’t say.
All I can tell you is that the Chapter 11 we filed was to help us reboot, rebuild and reformat our company, so we can move forward and build.
This is what we want as a team. This is what we want as a corporation and this is what all of you will see will be the best thing going forward.
TelexFree’s CEO in hiding Stuart Macmillan was absent from the call, with Labriola stating this was conveniently due to his being “on a plane, heading down to meet with the new platform company”.
Meanwhile in an attempt to tell affiliates how they should feel about TelexFree having no money to pay them with, Labriola (right) offered up the following little anecdote:
We were on a call with senior management and even our IT guy Jay. We got on a call with him late this afternoon today. And when we got on that call, he was all concerned, “well what is this all about?”
When we told him what we were doing, his comment: “That is the best news I have ever heard. The most awesome thing for this company right now to move forward.”
So it is the right move and the right step.
What isn’t known of course is, like many of TelexFree’s affiliates have done, whether Jay the IT guy invested thousands of dollars with the scheme and is now facing the reality of losing it all.
Labriola promised to schedule another call tomorrow to “go through at least ten or twelve questions and answers that are out there that I know are prevailing. I can’t go through them until I get the ok on things I need to say.
For certain one of those questions will be the big one every TelexFree affiliate is currently asking themselves, “what happens to our money?”
Labriola has promised “daily updates” from tomorrow, so we’ll have to wait and see if he delivers any further actual answers.
Meanwhile Labriola’s Brazilian clown in crime counter-part, Carlos Costa, appeared in a video earlier to rage some more against the Brazilian government.
Costa declared that, despite the US being “a country with severe laws”, TelexFree’s bankruptcy was granted, whereas in Brazil it was twice denied.
How up to date Costa is with the situation in the US I can’t say, but I can say that he’s wrong about TelexFree’s bankruptcy proposal being granted.
On the 14th of April the Nevada Bankruptcy Court issued a notice to TelexFree informing them that their proposal had been rejected due to it being “incomplete and/or deficient”.
The court noted TelexFree had failed to provide no less than thirteen required declarations. One or two I could perhaps understand as an oversight, but thirteen?
I don’t know how much TelexFree are paying their legal team but it seems they’re on par with TelexFree’s Brazilian representation, who have lost twenty something appeals in Brazilian courts. In one such case, TelexFree’s appeal was rejected because the legal team forgot to pay the $100 or so filing fee.
Note that TelexFree have until April 28th to file the missing declarations. With one of them being a declaration that the bankruptcy filing was made under penalty of purjury though, whether TelexFree actually file anything further remains to be seen.
The other point of interest in Costa’s video is the assertion that TelexFree had to file for bankruptcy in the US, due to assets being frozen in Brazil since June 2013.
If I may shed some further light on the matter, according to TelexFree’s 2013 profit and loss statement that was recently made public, TelexFree walked away with a net income of $36 million USD.
In the same year, TelexFree also had to pay $29 million USD in Brazilian tax fines (they either didn’t pay any tax or failed to declare their actual net revenue).
Costa even went so far as to make a video about the fine, emphasising the speed and efficiency with which TelexFree paid the fine. He declared it “wonderful”.
TelexFree’s Brazilian assets are all tied up due to an ongoing regulatory case against them there, so where do you think the money came from?
Perhaps the fines are not so wonderful in light of the fact they are likely to be behind the reason TelexFree US has run out of money.
Jozelia Sangali, Costa’s wife, withdrawing $1.34 million dollars (a week?) from TelexFree probably didn’t help either.
Of course neither Carlos Costa or Steve Labriola would ever tell affiliates that openly, as that would mean actually shedding some truth on the current situation. Better to pump smoke and mirrors up everybody’s ass with promises of business restarts and legitimacy.
One final note, at the time of publication there’s been no public move by the SEC on TelexFree’s bankruptcy application. I’m still tipping we might see something by the end of the week but of course nothing is certain when it comes to US regulators.
That’s all for now but as always, stay tuned…