WCM777 Receiver’s 10th Interim Report (2nd quarter, 2016)

As per her duties as court-appointed Receiver of WCM777, Krista Freitag filed her tenth Interim Report on August 19th, 2016.

The tenth Interim Report spans the second quarter of 2016 and provides updates on recovery of funds, PMX Jewel’s flawed diamonds, the settlement with Phil Ming Xu’s family and the investor claims process.

In no particular order, highlights from the Freitag’s report are detailed below.

Recovery of funds

In the second quarter of 2016, the WCM777 Receivership recovered

• $50,000 as per the James Dantona Governmental Impact settlement agreement
• $1,000,002 from the sale of FrequencyNetworks stock
• $1,490,155 from the sale of an El Monte warehouse and
• $3,995,290 from the sale of the Glen Ivy golf course

PMX Jewels and PMX Holdings diamonds

Last we checked in back in April, a master gemologist appraiser in Los Angeles was going to assist with marketing and selling of Phil Ming Xu’s flawed diamonds.

The Receiver is advised that the Los Angeles diamond cutter received the special wheels ordered from Israel; however, such wheels were not strong enough to complete the polishing and cutting of the stones.

Unfortunately it was then discovered that the ordered wheels were not fit for purpose.

The Receiver is advised that the Los Angeles diamond cutter received the special wheels ordered from Israel; however, such wheels were not strong enough to complete the polishing and cutting of the stones.

The problem now is that further pursuit of appropriate tools to cut the diamond will likely outweigh proceeds raised by their sale.

To finish the cutting and polishing of the stones, it is estimated the estate would incur approximately $12,000 of additional costs – $10,000
of labor and $2,000 to purchase a set of stronger wheels from Belgium.

However, it is not believed, given the softening of the diamond market and the lack of quality in the stones, that they would obtain $12,000 on the open market upon completion (of course, assuming the stronger wheels are effective at completing the cutting and polishing).

A “small offering” has been made by an individual to purchase the diamonds as-is, which the Receiver looks likely to accept (pending approval from the court).

Phil Ming Xu’s family

As per a settlement agreement reached earlier this year, Sue Wang (Xu’s sister) and XiaoMei Deng (Xu’s mother) made a payment of $1,075,000.

This was on top of a previous $50,000 payment, which combined now sees the terms of the settlement fulfilled.

Investor Claims

As disclosed in an earlier filing, the processing of WCM777 victim claims is taking longer than anticipated.

While the Receivership continues to process victim claims, an extension will be sought on or before October 14th, 2016.