Class Certification of Zeek’s net-winner thieves granted
As part of our continued coverage of Zeek Reward’s top thieves being steamrolled in court and having their legal arguments demolished, today we bring you news that the Receiver’s request for Class Certification has been granted.
Before we get into what that means, let’s take a look at the request itself.
At the heart of the matter is the allegation from the Receiver that
because ZeekRewards’ Net Winners “won” money in an unlawful combined Ponzi and pyramid scheme, the Net Winners are not permitted to keep their winnings and must return the fraudulently transferred winnings to the Receiver for distribution to ZeekRewards’ victims.
Naturally the net-winners, those who profited the most from the Ponzi scheme, disagree. And to that end we’ve seen a mountain of litigation filed and all sorts of attempts to delay proceedings to that effect.
Regardless, we’re slowly getting there and this request for Class Certification brings us one step closer to seeing net-winners forced to pay back the funds they stole.
The pros of Class Certification being awarded are that it’s much simpler than individually litigating against the 9400 investors in the US who stole more than $1000 from Zeek’s victims.
As per the Federal Rules of Civil Procedure, the 9400 net-winner investors in Zeek (the clawback litigation ignores those who made less than $1000), ‘meets the numerosity requirement‘ required for Class Certification.
Arguments have been raised against Class Certification by Zeek’s top net-winners however.
Zeek’s net-winners argue a lack of commonality between themselves and the rest of Zeek’s net-winners, and also that they ‘simply cannot afford to represent the Net Winner Class‘.
The issues at play here relate to the designation of Zeek’s top net-winners as Class Representatives, representing the rest of the 9400 net-winner defendants in the clawback litigation.
Primary factors that have to be met are that there is a commonality between the Class Representatives and the rest of the net-winners, both in situation and in their ultimate objectives. There also can be no conflict of interest between the Representatives and the rest of the net-winner class.
On the broad topic of commonality, the court found that:
The “commonality” factor examines whether there are “questions of law or fact common to the class.”
Here, the common questions are whether ZeekRewards operated as a Ponzi and/or pyramid scheme and whether net winnings received by the Defendants should be returned to the Receiver.
The proposed class members in this action are likewise linked by a common set of facts, which includes whether ZeeksRewards’ operation was a Ponzi and/or pyramid scheme.
All class members had or controlled usernames and accounts with ZeekRewards through which they received funds from RVG. Further, each class member received more money from RVG than they paid into RVG (their “net winnings”) during the course of their participation as affiliates in the ZeekRewards program.
There is also a common question of law, that is: whether the payments from ZeekRewards to class members are fraudulent transfers that must be disgorged and repaid.
Basically, all net-winners received funds from Zeek – and based on whether or not Zeek Rewards was a Ponzi and/or pyramid scheme, they all now face the common prospect of having to return those funds.
The argument against that?
Despite these undisputed key common issues of law and fact, Defendants argue that the commonality requirement is not met because there may be differences in the Defendants’ relationships with RVG insiders, differing counterclaims,2 differing defenses such as reliance on counsel’s advice, potential third-party claims, and other issues related to the details of each Defendant’s participation in ZeekRewards.
Get your popcorn ready…
Any potential dissimilarities among the members of the proposed class do not impair the ability to reach a common resolution to the core issues of law and fact in this case.
Moreover, Defendants’ claim that individual circumstances impact the commonality requirement ignore the nature of this fraudulent transfer case, which simply looks at whether there was a fraudulent transfer to all the Net Winners that must be repaid, without regard to the individual circumstances of participation in the scheme.
How, why or who you spoke to during the course of stealing funds from Zeek victims doesn’t matter. That Zeek’s top net-winners and the rest of the net-winner class stole the funds is grounds for commonality enough.
With the issue of commonality resolved, next up was establishing whether there any insurmountable conflict of interest arose from naming the top net-winners as Class Representatives.
The typicality requirement addresses whether the “the claims or defenses of the representative parties are typical of the claims or defenses of the class.”
Obviously if the top net-winners were not deemed “typical” of the 9400 lesser net-winners, than certifying them Class Representatives is folly.
The Receiver has proposed that one or more of the following named Defendants serve as Class Representatives: Trudy Gilmond and Trudy Gilmond, LLC; Jerry Napier; Darren Miller; Rhonda Gates; Innovation Marketing, LLC; Aaron Andrews; Shara Andrews; Global Internet Formula, Inc.; T. LeMont Silver; Karen Silver; and Durant Brockett.
The typicality requirement does not mandate that the defenses of the representative parties and the class be completely identical or perfectly coextensive.
Rather, it is sufficient if the defenses are substantially similar and “there is a nexus between class representatives/claims or defenses and common questions of fact or law which unite the class.”
So, are the defenses of the top net-winners and rest of the net-winner class likely to be substantially similar?
Here, the proposed Class Representatives and the class each participated in the same event and course of conduct that has given rise to the Defendant class; that is, they all participated in and received at least $1000 in profits from the ZeekRewards scheme.
Because the Class Representatives participated in the same ZeekRewards scheme, they inevitably share the same defenses against liability for repayment of the alleged fraudulent transfers made to the class, which does not depend on the personal circumstances of particular affiliates.
You bet. All net-winners named in clawback litigation thus far stole $1000 or more from Zeek Rewards’ victims. That makes the top net-winners defenses equally applicable to each of the lesser 9400 net-winner defendants.
Finally the last issue is whether or not the Class Representatives and their attorneys will be able to ‘fairly and adequately represent the interests of the defendant class‘.
In determining whether a named representative in a class action is “a fair and adequate representative,” some courts have applied a two-pronged test:
1) the representative must be able to conduct the litigation; and 2) the representative’s interests must not be
antagonistic to those of the class members.Courts also examine the extent of the named representatives’ financial interest in the class action.
This one was easy to determine, with the court summing up its findings in a few short paragraphs:
Here, the proposed Class Representatives’ interests are not antagonistic to, but rather aligned with, the interests of the unnamed class members because they share the common objective to defend against having to return funds received from ZeekRewards as demanded by the Receiver.
Thus, there is no conflict which would defeat adequacy of representation.
Further, the named Class Representatives were among the largest Net Winners of the ZeekRewards scheme. Each received over $900,000 from RVG (either individually or together with another family member or through their shell corporation).
The proposed Class Representatives are not likely to abandon or return these substantial sums without obtaining experienced counsel and mounting a vigorous defense.
Already, the proposed Class Representatives have retained competent counsel who have filed extensive answers and motions to dismiss.
Who better to raise every conceivable argument against paying back stolen Ponzi funds than those who stole the most?
Finally, it is undisputed that counsel retained by the proposed Class Representatives are experienced and qualified attorneys, fully capable of protecting the interests of their clients and consequently the class.
Perhaps the most amusing defense to be trotted out by Zeek’s top pimps, was the claim that they simple couldn’t afford to represent everyone.
This too was addressed in the courts findings…
The Named Defendants argue that they simply cannot afford to represent the Net Winner Class.
However, their protestations of poverty ring hollow in light of the fact that together they won over $11 million in profits from ZeekRewards.
Wrecked!
the Court finds that Defendants and their counsel can and will adequately represent the class and there is no basis to deny class certification over the issue of what amount of truly necessary class legal expenses (as distinguished from the Defendants’ own legal costs) are paid by the Receivership.
That any of the victim’s funds should be put towards funding representation of Zeek’s net-winners is a bit of a farce, but if it’s not too much and it means this is done with all the quicker, so be it I guess.
Additionally concluding that failure to establish Class Certification might result in conflicting rulings across 9400 individual lawsuits (creating a legal mess), the court ruled:
A Defendant class action is fair to the Defendants, particularly relatively small Net Winners.
The efficiency of one action in which all parties can argue their case and assert their rights will benefit both the Receiver and small winners.
While the Court is mindful of due process concerns as well as other problems specific to defendant class actions, the Court is firmly convinced a class action is the only means to reasonably and efficiently resolve the Receiver’s claims against 9,400 Net Winners.
It is therefore ordered that the Receiver’s Motion for Class Certification is hereby granted.
So with that now out of the way, it’s expected that the Receivership will at some point in the near future file Class Certification litigation against all 9400 net-winners. This includes the top net-winners who have not already had default judgment rendered against them.
After some more pro-Ponzi legal arguments are destroyed in court, I predict that ultimately we’re going to see all 9400 net-winners pay back a sizable portion of the funds they stole.
Bring it on…
Footnote: Our thanks to Don@ASDUpdates for providing a copy of Judge Mullen’s February 10th order, granting Class Certification.
Thanks for the excellent write up Oz.
Based on a reading of the Order it seems the lead defendant(s) are permitted to negotiate settlement terms on behalf of the entire class.
Cheers.
I read it to mean that the Class Representatives will get to argue why they shouldn’t pay back their funds, they’ll lose and then all 9400 net-winners will have to pony up.
The terms have already been defined by the Receiver, in that he wants all of the funds paid out.
Obviously that might not be practical in individual cases, which is where the Reciever will have to negotiate with the parties. But as to settlement, the already requested terms seemed absolute.
yes, footnote 4 of the order [beautiful clear simple order!], says:
so the door for a ‘class settlement’, is still open. i think bell has been settling with other net winners at 50-60%?
Your logic there wasn’t very sound. The financial transparency from a few individuals can’t be applied to a whole class.
when there are approx 9500 people involved in a Class, i think ‘exactness and finesse’ gets chucked, for ‘efficiency and acceptable ideas’. ‘go for the middle’, type of thinking.
when plaintiffs file class actions [herbalife etc], and the class representatives, make a settlement with the company, can we say it will be equally fair to everybody, or that everybody will be satisfied?
here, in zeek, the court has forced the ‘class’ on the defendants, if any of those 9500 people don’t like it , they can come to the district court NC, and ask to be excluded from the class, and engage in a private settlement with bell. BUT no one is coming forward, which means they have to accept their class status, and lump any agreement gilmond et all, may make with bell.
that’s the thing with ‘class actions’ – [sing!] they’re all in it together, for the Fun Of It !!
That was my first impression but after a second and third reading, I think the “financial transparency” mentioned is expected to “aid in any settlement discussions” between the class representative and Bell concerning the estate’s contribution to the class legal costs. The scope is limited to that.
As to whether the class representative can negotiate and settle on a clawback percentage for the whole class…it seems reasonable to assume he/she could… providing Bell is willing.
What I find inconcievable is Norway’s notion that each and every 9400 class members would be entitled to present financial statements and enter settlement discussions individually.
The Receiver will need to contact each and everyone of the unnamed defendants.
read again carefully. if the court meant that financial transparency would help in ‘settling’ the estates contribution to the class costs, then instead of ‘but’ the court would have said ‘and’.
‘but’ divides the sentence into two parts, it means transparency can achieve ‘the’ desired result, ‘but’, can also help achieve some other result also.
‘two birds with one stone’ kind of allegory:
By law, Bell must make a sum certain money demand before obtaining a money judgment against the individual members of the class.
Therefore each and every affiliate must be notified of the demand and how they can contest the amount.
Almost certainly the court will pre determine what can be contested and what can not. Record keeping errors will doubtlessly be considered (so long as the affiliate has some documentation,) while setoffs for unpaid commissions, unpaid ROIs and other ponzi “entitlements” will not.
If FTI has done a good job with its forensic accounting, the number of disputes over the calculation of net winnings should be modest and its a dead certainty that not all 9400 net winners will dispute the calculation even though they must be given the opportunity to do so.
That is why the Receiver “needs to contact each and everyone of the unnamed defendants.” This is a demand/reconciliation process designed to determine the exact amount a net winner owes. It has nothing to do with the “financial transparency” that is being required from the Class Representatives.
Like I said, I feel like class representative can negotiate a CLASS settlement under the law but I don’t think the passage we are looking at confirms or denies that.
In my view “financial transparency” will aid the judge if he has to determine the amount but it can also aid in settlement discussions between the parties.
Judge’s of course like to see settlement and compromise and I would particularly think in this case since the amount the estate should contribute is so subjective.
My comment wasn’t about that either, but about the class settlements suggested in posts #3 and #5.
That sentence has 2 different elements, one about to what extent the Receiver shall be required to fund the defense of the class, one about settlement discussions.
The financial transparency will only be relevant for the individual settlement. The Court can’t use Trudy Gilmond’s financial situation as a measurement for the whole class.
Of course not, which is why I maintain that the court’s expectation of financial transparency from the named plaintiffs (all of whom are proposed as the potential class representative) has everything to do with the amount the estate will be required to contribute to the class defense and nothing to do with individual settlements.
There is no way on Earth that I can believe Trudy Gilmond or anyone else in this group or among the 9400 is is going to sign an individual settlement. Its a class action now. Signed, sealed and Certified.
The common factor among the class members was the fraudulent transfers.
Then we have one point specifically about the named defendants.
Then we have a common factor.
Then we have 2 points about the unnamed defendants, quoted in post #7.
Then we have prejudgment interests etc.
Each of the named defendants will get individual judgments for the amount. Some have already received default judgments (Disner, Sorrells, Van Leeuwen). At least one has already settled (Lori Jean Weber), if I have interpreted it correctly.
Well believe me, the reciever will not “need to contact each and everyone of the unnamed defendants” and AGAIN offer them the chance to settle. We’ve been down that road.
Any contact from this point forward will be to make the money demand and explain how to contest it, along with whatever other recitations and notifications that may be required.
I am not saying the named defendants can’t settle, but the submission of financial disclosure statements and the requirement to be available for deposition is an extraordinary condition that applies only to the “one or more” proposed class representatives and not to all named defendants and certainly not to the 9400 unnamed class members.
The purpose of this extraordinary condition is to give the judge guidance in determining the proposed class representative’s ability to fund their own litigation, or conversely how much the Recievership shall contribute to the cost of defending the class.
The 9400 + other net winners are not going to be invited or required to do this and now that the class has been certified I can not imagine that Bell is going to putz around with individual financial statements and settlement discussions.
This is requirment for financial transparency is not a mechanism to foster settlement but to determine how much the estate will contribute to the class’ legal defense.
Anyone wonder why Todd Disner isn’t listed as a possible “representative”?
Could it be the Default? Or maybe that he is a dufus?
As I understand it the Class Representatives have to be able to represent the those in the Class Certification. The default judgement disqualifies Disner.
Definitely because he’s a dufus, but having defaulted, he is now proscribed from answering the complaint.
He can still file a motion to vacate the default for cause but that’s about all.
Correction: the submission of financial disclosure statements and the requirement to be available for deposition applies to all named defendants, not just the proposed class reps so peradventure settlements are being promoted.
Darren Miller previously a proposed class rep just dropped Terpening as his attorney. Maybe he settled?
That comment tried to tell you that my posts #4 and #7 were replies to Anjali’s posts #3 and #5.
The logic goes like this:
You probably had a discussion with Anjali in post #6 and #10, but post #9 wasn’t very understandable. So I gave you this answer in post #11:
The problem?
You started a discussion with Anjali, a couple of posts from both of you. Then you suddenly tried to continue the same discussion with a different person (me). I simply tried to tell you that I didn’t participate in the discussion you had with Anjali.
I haven’t claimed that either. I quoted points #4 and #5 in Prayer For Relief (from the Complaint against the net winners), in post #7. The 4 other points were cited in post #13.
Defendants can normally settle a claim. Since the class action have point #1 (findings of fraudulent transfers) common for all defendants, a settlement will probably require the defendant to admit that as part of a settlement. A settlement will also require approval by the court.
The Receiver will need to send notice to all the unnamed defendants about the proposed amount.
Source in support of that argument:
the ‘financial transparency’ of the ‘named’ defendants will help decide the amount the receivership has to pay towards class litigation.
the financial condition of the ‘named’ defendants is therefore acceptable to the court, as an ‘indicator’ of the defendant class’es ability to pay.
example: gilmond may have dissipated 50% of her winnings. on the other hand there may be many in the 9500 class, who invested most of their winnings in real estate.
but, the court does not have the reach to investigate the financial status of the whole class, and is using the ‘named’ defendants as a general thermometer.
similarly , if at all class settlement discussions are initiated, the fiscal condition of the ‘named’ defendants can again be utilized, as a general thermometer, to come to a settlement agreement. besides the financial transparency data of named defendants, what other basis can be there to negotiate a settlement, there is no other data ?
also, the door is still open for both individual settlements and class settlements. up until the civil trial court order, defendants are free to negotiate with the prosecution.
Logically you’re right, but is it true? Not only is the sample size miniscule but the named defendants are peak winners and thus atypical of the class.
The judge has to hang his hat on something in order to approve a settlement but this sampling would be an unsuitable hat rack.
I submit that there is no useable metric to decide if settlement terms are fair to the class and the estate and settlement, if it occurs, will be based solely on the parties assessment of trial risk and what they can “live with.”
it’s a logical solution, it’s not ‘true’. there cannot be one ‘true’ financial capability of a class of 9500 people, only indicators of it.
how the peak winners, have spent their zeek earnings, may not be entirely atypical, spending habits of people are not that far different. check this graph of 2012 about US spending, to get an idea:
npr.org/blogs/money/2012/08/01/157664524/how-the-poor-the-middle-class-and-the-rich-spend-their-money
when it comes to negotiating a settlement with bell, this peak calss , in fact, is the best negotiator, in the interest of the class, because they have the most to lose.
of course, parties assessment of trial risk, will also be a factor in considering settlement.
i don’t know what you mean by ‘what they can live with’, because there is nothing to measure this against. the peak winners ‘current financials’ would be a much better metric to use for negotiation, because it is ‘tangible’.
You have argued well in light of the small sample size and the atypicality of the named defendants, but let me ask you this… Would the named defendants negotiate more vigorously or better if they could afford to pay the money back or if they couldn’t?
I suspect they would negotiate or contest just as earnestly either way. Accordingly I don’t believe the relevance of this required “financial transparency” extends beyond the determination of the estate’s contribution of legal fees.
What I meant was how much pain losing would bring. That is a very individual assessment and you are right there is nothing to measure it against so its a matter of “what ” the class representative and his attorney can “live with” if they lose at trial.
At the root, negotiation is an emotional issue that current financials do not, and can not measure. An arbitrator or mediator might try to use the metrics you suggest but the small sample and for other reasons I have outlined tell us next to nothing about what is fair for the class.
Therefore, any settlement will be based on fear, not the named defendants bank balances.
stop right there. a class settlement negotiation between the representatives and their lawyers, and the receivership, will be as hard nosed a business deal, as you will ever see.
nobody will be needing any kerchiefs or tissues.
when you negotiate you have to start SOMEWHERE. the current financial status of the named defendants is a good place to start.
i don’t think bell and gilmond will start talking about their pain and fear, and what they can live with, or without. this is a legal environment, lets not confuse it with a psychiatrist visit.
Lets not confuse it with science either.
If there is a settlement it will be because the cards are falling against somebody in the trial, not because of the bank balances… and that equates to fear of loss, not accounting. If a settlement comes out of this it will be because somebody blinked.
If its as “hard nosed” as you think, then Bell will not give an inch and the entire lot of these net winners will be looking at 150% payback.
Tell me about your bank balance. Pfft. Who cares.
negotiation is an ‘art’ not a ‘science’.
no. negotiation occurs, because it creates a win-win situation for BOTH parties. if one party has strong interest in the negotiation NOT happening, there will be no negotiation.
in this case, the defendant class can beat the ‘outcome’ of a civil trial by settling.
in this case, the prosecution can avoid the cost and delays of a civil trial, by settling. there’s a LOT of work involved in going to trial, and with the ‘sheer size’ of cases like zeek, it’s a pain in the ass. better to settle.
bell is blinking in continuum, he’s happy to settle cases at 50-60% in the interests of speed and efficiency.
50% settlement and distribution of the zeek estate, to net losers makes more practical sense, then incredible amounts of ‘discovery’ and the trial, which will be appealed, and then default judgements appealed, and so on and so forth.
don’t be going around Pfft-ing me.
i am the Boss of Pfft-ing 🙂
That idea didn’t make much sense. For something to act as an indicator, it will need to be something typical or average for the whole group, and it will need to be very few differences between each member of that group.
That method won’t produce any meaningful results. It will be like looking at a random mammal (e.g. an elephant) and assume that is an indicator for all mammals (weight, size, habitat, etc.).
If Bell could achieve 50-60 I think he would take it. Why? Because he has shown his willingness to do so already. But again this number has zippo dot nothing to do with the bank balances of the named defendants. Its just a number that Bell plucked from thin air.
EVEN IF the bank balances were a starting point for negotiations, one side or the other could balk within the first session and conclude, as I have done,that the sample is too thin to be used as a proxy for the entire class. The balances have no utility except in determining how much the estate will contribute to “one or more” proposed class representatives legal fees.
As if!
You’re the Boss of Win-win (a worn out catchphrase first used in the late Jurassic Period to take advantage of distressed property owners. If any one pitches you with “its a win win.” Run. Run.
Or you could decide to utilize a more modern version of the win/win concept.
Rather then the traditional three possibilities, it has four:
* win / win
* win / lose
* lose / lose
* Go away, I’m not playing your silly game
Surely, and they will be begging for a settlement before this is over because any settlement is better than a complete loss. Unfortunately, for them the chance to “win” was when they could have walked away unscathed by settling at a 50 +/- discount (with repayment plan options) before the Complaint was filed.
The chance passed and they rebuffed Bell’s reasonable offer to treat.
Why Bell would settle is unknown. It appears he has the cards to take the whole pot.
Pain in the ass? Its how lawyers earn their living! This is bread and butter to the lawfirms and Bell is the Rainmaker.
The law firms would be more than willing to litigate this for the next century if decorum and the judge allowed. The interest accrual alone is enlargening the estate’s claim even as lawfirm’s file their compensation claims.
This is the best racket in town.
There is no “prosecutor” here, and no governmental sub-agency that needs to avoid costs because it is budget constrained.
Here, virtually the entire present and future value of the Zeek estate is available to fund the litigation. Thus, the question is not “do we have the budget to “prosecute” but “will the estate net more if we take this to a decision?
you are stretching the diversity argument too far.
human beings, and their habits [including spending] have, through times immemorial, been studied as a group, on the basis of a small sample size. if the results were not mirroring the truth, this kind of study would have been rejected.
take the case of amway/herbalife. both have established their ‘sales patterns’ on the basis of studying small sample sizes, and courts have accepted it.
remember, that as far as the ‘financial transparency’ of the peak winners is concerned, it’s not about how much money they earned, but how they dissipated that income.
the motives of the lawfirms, bell hires to do the grunt work, are not of importance.
bells motives are important. he is an officer of the court, appointed to deliver results, for the RGV estate and work in public interest.
long drawn out litigation, eating into the estate, and delaying creditor payment, will not be seen as a meritorious solution by a court or receiver. courts like efficiency and expediency, they’ve got their dockets full.
why is bell settling with anyone then? if he has all the cards, he can just get default judgments against everybody and go for the full amount. settling is easier, and saves time and effort, that’s why.
I’m not familiar with Amway’s research, but Herbalife’s research was plain BS, and we both know that. So what exactly was your point? 🙂
Herbalife’s research was about something different, e.g. most of the questions were “yes/no” questions like “Have you heard about Herbalife?”, “Have you bought some Herbalife products in the last 12 months?”, “Were you satisfied with the quality of the product?”.
It also showed that some people clearly differed from the rest of the group, i.e. the method couldn’t have been used in a settlement (it would have produced more than 10% unfair results).
norway, i can Assure you that the ‘herbalife study’ will not be used in the settlement negotiations of zeek defendants/RGV 🙂
the herbalife example was to show you that such sample studies are acceptable to courts as a ‘general overview’. courts don’t go around saying — but but but, this is an elephant and this is a rat, and let’s spam the court with nit picking and irrelevant details!! 🙂
read footnote 4, repeatedly, till you Get it, and Be Done !!
So you’re not sure about the “Amway study”? 🙂
I think I have got it. It says something about “not so sound logic”.
Bell is not going to pursue a suit that he doesn’t believe he will win, the percentage of estate assets allocated to this will be a relatively small percentage of the total so continuing the litigation is an appropriate allocation of the estate’s capital.
What you characterize as a “cost” is actually a prudent investment of time and money that carries with it, an expectation of a superior return.
Wha? How is Bell supposed to get default judgments against “everybody” when “one or more” of the named defendants will be designated as the class rep(s) and answer the Complaint on behalf of the whole class.
I’m sorry if your confused but really, do you even understand how a default comes about?
You don’t understand why Bell offered to settle prior to filing the Complaint? And you don’t understand why he would settle with a named defendant if they volunteered to do so even now.
++++++++++++++++++++++++++++++++++++
Bell can not/should not assume that all the participants knew Zeek was a ponzi.
Accordingly its reasonable to inform these individuals of the SEC action and then offer them a way to settle. Most did not accept the carrot.
Any named defendant that settles now has apparently… finally come to their senses and understands how losing at trial is going to affect them.
Bell is not vindictive so if someone wants to voluntarily settle (particularly if it involves a cash payment ….why not?
The cost of collection, whether its to recover a settlement amount or the full clawback + interest is going to “cost” the estate far more than obtaining the judgment in the first place so voluntary arrangements are welcome…. and cash talks.
The question is not whether sampling works but whether it works in the context you have presented.
Your proposition is dubious to say the least. If you want to know how people spend their money you already know (you put up the link) How 13 prople or 9400 people or the general population of the US spend their money is not the issue.
The issue is and only is, how much money the named defendants can access to pay their own legal fees.
Why not instead choose the lowest 15 net winners as the sample. By that “indicator” the entire mass of Zeek winners would be virtually dead broke. Do you think that’s any more or less accurate than taking the top 15?
let bell believe he will win the suit. let bell win. then what happens ? it will be appealed. after that, the process of recovery and distribution of funds will begin. can you calculate the timeline on that?
on top of that judge mullen himself acknowledges, that defendants must have dissipated funds. so Total Recovery of winnings is not expected, as it is.
in such circumstances it is practical and prudent to settle, with the defendants, in public interest.
I think Bell will argue that there should be no stay pending appeal and Mullen will agree. Then Bell will find a stalking horse bidder, hold an auction and sell the judgments for cash. Collection will not be handled by the estate.
Bell’s job is to obtain the largest money judgment possible so that he can obtain the highest price possible when he sells the judgments. Timeline? There should be an auction within two months of judgment being rendered.
Nobody EVER expects total recovery of debt which is why Bell will need to discount the judgments when he sells them.
The dissipation comment by Mullen concerned funds available to pay the class reps attorney fees.
The defendants were crying poor…. but are they really? That’s why he demanded financial transparency from them.
What’s their net worth? What assets do they have to pay their own legal fees. They may have dissipated all of their Zeek winnings but if they still have a significant net worth they will pay a larger portion of the legal fees.
Its not only about what they have spent, but also and even more what they have available from any and all sources.
This is not a public interest matter. The estate is not a public entity, nor are the creditors and defendants.
If any public policy issue is at play it is the American people’s desire to send a message to all get rich quick players that that clawbacks are real and they are enforceable.
1] because they are not before the court.
2] because judge mullen don’t smoke crack.
3] because since the ‘peak winners’ earned the most, their earnings will possibly be least dissipated, which favors a settlement, leaning towards the ‘net losers’ than the ‘net winners’.
4] because judge mullen, being the nice guy he is, is sympathizing with the net winners, but will not be laying out any red carpets for them.
Sure they are.
How do you know?
A peak winner is INFINITELY more likely to have dissipated less in percentage terms but vastly more in absolute terms than a $1,000 net winner. So what.
Who has been whispering these secrets in your ear? Sorkin?
So much for that idea….
See [Proposed] NOTICE OF CERTIFICATION OF DEFENDANT CLASS ACTION
“RVG’s records show that you are a member of the Net Winner Class. Your membership in the Net Winner Class depends solely on the amount of your net winnings. It does not depend on….. whether you still have the money you received.
yes, if the case goes through the trial, and the defendants lose, their clawback judgments will be based on how much they earned, and not how much they have left.
but, if the case takes a class settlement route, then questions of the current financial status of defendants, may be addressed, to arrive at agreeable settlement amounts.
The judge must find a proposed settlement to be “fair, reasonable, and adequate.”
Not sure if it’s of any major significance, but Gilmond just dropped her legal representation.
Might be the end of the *winkwinknudgenudge* defense they keep putting up?
Time to roll over!
link oz!! be sharing!
3:12-cv-00519-GCM Bell vs. Disner et al.
Doc 105.
It doesn’t say much, just that Gilmond fired her lawyers and they’re no longer representing her in the matter. The court granted the request.
Maybe Gilmond thinks if she fires her expensive lawyers that she can contest being classified a Class Representative (“woe is me, I have no moneys for representation!”).
She might have taken the Judge ridiculing her (and her fellow net-winners) in the class-certification order a bit too literally.
I don’t know for certain but it may only indicate that Terpening’s lawfirm is no longer representing her as an individual.
I’m not sure how they do this but eventually the designated class reps (one or more) need to be paired with a lead law firm. Its seems likely that they must reconfigure the existing representations to do this.
So only one firm can represent the Representatives?
Another lawyer was dropped last week from memory so I guess that makes sense. Guess they’ve decided who the best pro-Ponzi lawyers are then.
thanks, but doc 105, not uploaded yet on asdupdates.
someone else may receive a ‘you’re fired!’ letter too, soon!
It seems possible that two or more firms could provide joint representation for the class (or the class rep(s))
on feb 10th judge mullen ordered the ‘class certification’ of zeek net winners.
on feb 20th, the receiver bell, has filed a proposed ‘NOTICE OF CERTIFICATION OF DEFENDANT CLASS ACTION’, which will be emailed to all the 9000 class members.
some interesting points from this notice:
1] Your membership in the Net Winner Class depends solely on the amount of your net winnings. It does not depend on whether or not you believed ZeekRewards was lawful, your level of knowledge concerning the program or whether you still have the money you received.
2] The Court has not yet ruled on the merits of the claims in this lawsuit; however, when it does so, its orders will be legally binding upon you and all other members of the Net Winner Class.
The Court has noted that the common questions related to the Net Winner Class are “whether ZeekRewards operated as a Ponzi and/or pyramid scheme and whether net winnings received by the Defendants should be returned to the Receiver.”
3] You are not required to and there should be no need for you to participate in the legal proceedings related to answering the common questions for the Net Winner Class.
4] You will, however, have an opportunity to participate in the process if the Net Winner Class is found to be required to repay their net winnings….the Receiver intends to seek a process that will notify you of the amount of your net winnings according to the RVG records, allow you a reasonable opportunity to provide a response and then either reach an agreement on the amount or have the amount determined by a judicial process.
5] Net Winners are still permitted to discuss a potential settlement of the Receiver’s claims against them even though they have become members of the Net Winner Class.
If you desire to discuss a settlement of the Receiver’s claims against you, please communicate with the Receiver..
6] PLEASE DO NOT CONTACT THE RECEIVER, THE COURT OR COUNSEL FOR THE NAMED DEFENDANTS WITH GENERAL QUESTIONS ABOUT THE NET WINNER CLASS OR YOUR PARTICULAR SITUATION OTHER THAN IF YOU WANT TO DISCUSS A POTENTIAL SETTLEMENT WITH THE RECEIVER AS DESCRIBED ABOVE.
hoss, i was right. bell is being very gracious. he will settle with anyone right upto the last minute, even after net winners lose the case.
ha! hoss, bell is sending this mail to each one of the 9000 netwinners and he’s so not done with offering to settle!