wcm777-logoDespite the WCM777 victim claims portal opening up a few months ago in September, the Receiver has revealed that investor response has thus far been “tepid”.

Reasons cited by the Receiver for the lack of victim claims include:

  • the lack of a complete or trustworthy company database
  • the location of many investors outside the United States
  • the fact that a significant number of investors gave their money to other individuals who pooled the funds with those of other investors before investing and
  • the issuance and trading of (Ponzi) “points”

All of which prompted the Receiver to seek an extension to the claim deadline, which is currently December 24th, 2015.

Following a number of actions by the Receiver to increase the amount of claims filed, ‘as of November 27, 2015, approximately 11,900 claims had been received‘.

According to the Receiver’s Seventh Interim Report, some $20.6 million dollars have thus far been recovered.

Most of the Receiver’s report is information we’ve previously reported on, with the exception of ongoing settlement negotiations with Phil Ming Xu’s family.

As previously reported, the Receiver has sought and attained asset freezes on three single-family homes purchased with funds transferred from ToPacific to Defendant Ming Xu’s sister, Sue Wang, their mother, Xiaomei Deng, and several interrelated persons and entities.

Sue Wang, Xioamei Deng, MaNa Fashion, and Saza Investment (“Wang Defendants”), all of whom are represented by the same counsel, have failed to (a) provide initial disclosures, (b) file a Rule 26(f) report, (c) respond to the Receiver’s discovery requests, and (d) respond in any way to either of two separate motions to compel.

Accordingly, on November 9, 2015, Magistrate Judge Wilner issued a report and recommendation that terminating sanctions be entered against the Wang Defendants.

Despite their complete lack of participation in the litigation, the Wang Defendants have participated in settlement discussions.

However, after many months, they still have not taken steps necessary to complete the settlement, including returning title to the two rental properties to Sue Wang so that a deed of trust securing the proposed settlement payment can be placed on them.

If a settlement can be reached with the Wang Parties, the Receiver will seek Court approval thereof.

Despite the plight of Phil Xu’s family being an obviously lost cause, it seems they’re determined to hold onto Xu’s Ponzi gifts for as long as possible.

Another interesting tidbit is Aeon Operating Inc, the operator of oil and gas leases Xu sunk $3.1 million dollars of stolen investor funds into, filed for bankruptcy on September 16th.

The Receiver and her counsel have been in communication with Aeon and its counsel, as well as industry consultants, to gather information about the leases and operations and evaluate options for disposing of the leases and maximizing the recovery therefrom.

Through this investigation, the Receiver has determined the leases have very limited value.

The wells on the Cameron Parish lease in Louisiana, into which WCMR put approximately $1.8 million, generated very disappointing results when they were operating and there is a large amount (hundreds of thousands) of unpaid bills to contractors and other creditors (and lienholders) on the project, which is currently dormant.

The Davis Lease in Callahan County, Texas, into which WCMR put approximately $1.2 million, has not generated any return to date and the operator, Merkaz Drilling, claims that Aeon Exploration /WCMR owes approximately $391,000 for unpaid bills on the project, plus large contractual penalties.

The leases located in Limestone County, Texas, into which WCMR put approximately $100,000, have no activity on them and were simply acquired in the hope that drilling would come to the area and the leases would be sold at a profit.

The leases generally expire in November 2016, with an option to extend them to November 2018.

Sounds like a whole bunch of people got screwed over by Aeon.

The Receiver is attempting to recover some value from the Cameron Parish and Davis leases by assigning them to others involved in the projects.

Although the recoveries will be small, the assignments will also eliminate potential vendor claims against the receivership estate for unpaid bills relating to the projects.

The Receiver anticipates having these deals documented soon and will present them to the Court for approval.

Barring any unexpected events, it’s expected the first distribution payment to WCM777 victims will take place early next year.

Stay tuned…