Boreyko wants to inject $500,000 into Vemma
The current state of Vemma’s financial affairs is unknown. However if a recent filing by owner BK Boreyko is anything to go by, things might be looking tight.
AZPACK Properties, LLC is an entity in Arizona which owns real estate. Arizona state records list a filing date for AZPACK Properties in 2013, with four manager/member individuals having a stake in the company.
Boreyko is one of the individuals listed, with a filing on November 24th revealing he has a 25% stake in the company.
AZPack Properties LLC as an entity have agreed to purchase Boreyko’s stake for an agreed sale price of $500,000.
Whether or not the sale of Boreyko’s stake in AZPACK Properties violates the current Vemma preliminary injunction is unclear.
As per the Vemma preliminary injunction, Boreyko is prohibited from
assigning, concealing, converting, disbursing, dissipating, encumbering, liquidating, loaning, pledging, selling, spending, transferring, or otherwise alienating any real estate asset.
Boreyko’s share in AZPACK Properties itself isn’t tied to a specific real-estate offering, nor would the sale of it see AZPACK Properties sell any properties the company currently owns.
Citing an “abundance of caution”, Boreyko sought clarification from the FTC on the matter. The regulator however ‘declined to stipulate to the transaction‘.
Whether or not the FTC opposes Boreyko’s motion remains to be seen, with a decision ultimately in the hands of Judge Tuchi.
Personally I’d be surprised to see the sale approved, as the whole point of the injunction is to prevent Boreyko’s dissipating known assets.
This was ordered in the event of Vemma losing the FTC case, in which case assets and funds recovered from Boreyko and Vemma would be marshaled to be pay out victims.
A key consideration might be whether or not Boreyko’s 25% stake in real estate AZPACK Properties owns, is substantially lower or higher than the $500,000 agreed sale price of Boreyko’s share.
Another is even if the sale is granted, whether Boreyko is free to do as he pleases with the funds – considering the sole purpose of AZPACK Properties appears to be real estate acquisition.
The proceeds from this sale will be utilized by Boreyko to make a capital infusion to fund ongoing company operations and expenses.
Meanwhile, how badly does Vemma need this $500,000 cash injection?
Judge Tuchi’s decision will no doubt be interesting. Stay tuned…
Footnote: Our thanks to Don@ASDUpdates for providing a copy of BK Boreyko’s November 24th “Motion To Approve Sale Of 25% Interest In Limited Liability Company“.
Update 15th December 2015 – On December 11th the FTC filed an opposition to Boreyko’s proposal.
The FTC’s opposition was filed with the court clerk, pending a decision on whether or not it should be sealed from the public.
Update 16th January 2016 – Equating the sale of Boreyko’s share in AZPACK to the selling of real-estate, today Judge Tuchi denied Boreyko’s proposed sale.