TelexFree disputed victim claims resolution approved
Back in October the TelexFree Trustee filed a proposal to resolve some 19,530 disallowed victim claims.
Concerned that they might be potentially held accountable for more than they stole, net-winners objected to the Trustee’s proposal.
The Trustee responded to these objections, asserting that net-winners had no say or standing in the victim claims process.
On December 26th the Trustee’s proposals were signed off on, paving the way for claim resolution.
As per the order, the Trustee is now
authorized to send Participants who filed claims through the Portal established by the Trustee (the “Participant Claimants”) a Proposed Claim Allowance.
This means that sometime in early 2018, TelexFree affiliates with disputed claims will receive notification of a proposed claim allowance (how much they are entitled to).
Claimants have thirty days to respond to the determination. Responses are to be sent to the Trustee, not the court.
Affiliates who don’t respond within thirty days will be sent a Notice of Claim Allowance. A response detailing why no response was filed to the original determination is required to be filed within fourteen days.
Claim responses are categorized as disputes, which the Trustee will work toward resolving.
If the amount remains disputed,
the Trustee may file with the Court an Affidavit of Claim Allowance … which shall establish the allowed amount of the Participant Claim without further notice or order.
Basically as I understand it, you can argue with the Trustee as to how much you can claim but ultimately the Trustee (based on TelexFree’s financial records), has final say.
Omnibus claim objections proposed by the Trustee have remained intact, with omnibus reasons including:
- Multiple Participant Claimants (affiliates with multiple accounts) claimed ownership of one or more of the same User Accounts;
- Participant Claimants deleted User Accounts associated with them by the Debtors’ records without adequate explanation or documentation; (caught trying to cover their tracks)
- Participant Claimants added User Accounts that were not associated with them by the Debtors’ records without adequate explanation or documentation; (typically used by scammers trying to scam the system with credits)
- Participant Claimants added or deleted a transaction or adjusted a transaction amount in a User Account without adequate explanation or documentation; (TelexFree affiliates cooking the books, so to speak)
- Participant Claimants adjusted the amount of their claim based on transactions not consistent with the Net Equity formula, without adequate explanation or documentation; (usually affiliates trying to claim promised ROIs that don’t actually exist)
- Participant Claimants asserted claims in foreign currencies or asserted punitive claims or other claims that do not qualify for allowance under the Net Equity formulation approved by the Court; and
- The claims are objectionable under Sections 502(d) of the Bankruptcy Code.
The Trustee is able to group 250 claims under each omnibus objection.
Responses to the objections can be filed with the court and must be served on the Trustee’s counsel.
I assume the court will then deal with the disputes.
Seeing as the court hasn’t objected to anything the Trustee has proposed, I don’t see it ruling in favor of affiliates on any disputes.
That obviously isn’t for certain however, with unusual mitigating circumstances possibly resulting in a claim determination being overturned.
Highly doubtful though, given the Trustee will already have tried to resolve the issue with the claimant affiliate.
No word yet on when Proposed Claim Allowances will be sent out. Stay tuned…