NxPay ordered to surrender $9 million to Zeek Receiver
Following the breakdown of negotiations that would see some $9 million in stolen Ponzi funds recovered, last December the Zeek Rewards Receiver took the matter to court.
In response to the Receiver’s filing, NxPay continued to dispute the funds belong to the Receiver, arguing that
a summary proceeding under the Agreed Order is not the appropriate way to make this determination.
NxPay would have the Receiver file a separate action against NxPay such that NxPay would have a full and fair opportunity to present their claims and defenses.
Yesterday saw a Judge acknowledge those concerns, but ordered the payment processor to surrender the $9 million in question anyway.
In his ruling, Judge Mullen stipulated that ‘a separate action would be costly and inefficient‘.
The Court finds it appropriate to freeze and safeguard these assets until a final disposition can be made.
Accordingly, NxPay is directed to pay the amount of $9,069,446.52 to the Receiver within five days of the date of this Order to be held in a segregated account.
Now that doesn’t mean they can’t press ahead with their challenge, only that it will come under existing litigation.
The parties are directed to appear for a status conference before the Court on June 24, 2015, at 10:30 a.m. in Courtroom 2-2 of the United States District Court in Charlotte.
The parties should be prepared to discuss the scheduling of the contempt hearing and whether any discovery is necessary prior to the hearing.
Given that the amount in question are undoubtedly stolen Ponzi funds, it’s unlikely that NxPay are going to win this.
Judge Mullen ordering the processor to surrender the funds brings up a question of trust, with a clear concern as to whether or not the funds might “disappear” if NxPay ultimately lose in court.
Everybody else has had to pay back their ill-gotten gains, now it’s your turn boys.
We’ll keep you posted after the June 24th hearing.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of Judge Mullen’s June 1st Order.
Update 9th June 2015 – In a Motion for Reconsideration filed on June 8th, NxPay now claim they don’t have $9 million dollars to surrender.