Zeek Receivership updates for first quarter 2017
On May 1st the Zeek Receiver filed his first quarter Status Report for 2017.
The report covers settlements received, US and foreign net-winner clawback litigation, various insider lawsuits and the aggregate amount paid out to Zeek affiliates thus far.
During the first quarter of 2017 the Zeek Receivership received $289,736 ‘from settlements with various third parties who were holding Receivership Assets or against whom the Receiver asserted claims‘.
US Net-winner Clawbacks
To date 226 out of the 9000 Net Winner Class have filed a response in agreement with the Receiver’s calculation of how much they stole. 152 net-winners disagreed with the Receiver’s calculations.
186 out of the 226 affiliates who agreed with the calculations have requested a settlement negotiation.
With respect to the named top net-winners;
The Receiver Team also continued collection efforts against the named net winners against whom the Receiver had previously obtained default judgment.
Further, the Receiver’s counsel engaged in discussions with third parties regarding the collection and/or sale of potential future judgments against
U.S. net winners, including the Net Winner class.
Sounds like the more difficult net-winner collections might be sold off to debt agencies.
Foreign Net-winner Clawbacks
The Receiver continued litigation in the U.S. lawsuits against foreign-based net winners.
The Receiver prepared and filed motions for summary judgment against the remaining defendants based in Canada, British Virgin Islands, France, Israel, and Sweden.
As of the end of the first quarter, the Court had granted the Receiver summary judgment in three of the five actions, with the motions in the Canadian and Swedish defendant lawsuits still pending resolution.
In addition, the Receiver Team continued to pursue fraudulently transferred assets from foreign net winners against whom the Receiver has already obtained judgments.
Payza, PaymentWorld & VictoriaBank
Attempts to recover $13.1 million dollars in stolen investor funds continues. Unfortunately most of the recent filings in the case have been sealed, so I haven’t been able to report anything concrete.
Looking forward however, VictoriaBank’s Motion to Dismiss will be decided at a hearing on May 3rd.
To recap, the Receiver is attempting to recover $13.1 million from Payza, PaymentWorld and/or VictoriaBank.
I’m expecting the Judge’s decision will provide some clarity as to where the case is currently at.
Note that the decision might not be available on May 3rd itself but I will publish an update when it’s available.
Dawn Wright-Olivares’ House
As part of her settlement with the Receiver, Dawn Wright-Olivares’ family home was surrender.
There’s currently a lien on the property which the Receiver is working to remove, after which it will be sold off.
Sam Adlerman and S.T. Eagle, Inc.
Sam Adlerman and S.T. Eagle Inc. were named defendants in the Gary Bessoni Peak Leads USA litigation.
Bessoni has since settled for $175,000 with Sam Adlerman opting to defend the matter in court.
The lawsuit was still in the discovery phase during the first quarter of 2017.
In addition to engaging in discovery, the Receiver Team evaluated the next steps in proceeding toward the close of discovery in the case.
Tax attorney Howard Kaplan was sued by the Zeek Receiver back in 2014.
Kaplan doesn’t think he is obligated to return stolen funds he received in exchange for giving Zeek Rewards “bad legal advice“.
The matter is slowly playing out in court, with settlement negotiations to take place over the next few months.
In a subsequent Order dated February 23, 2017, the Court directed the parties to confer and devise more narrowly focused search terms than originally requested by Kaplan for searching the database of the Receiver.
In addition, the Court ordered the parties to proceed to mediation within 60 days, by April 24, 2017.
SHBB and owners James Moore, Oscar Brown and Robert Mecham, assisted in the promotion of Zeek Rewards at a corporate level.
The Receiver sued them for $750,000 in June of 2015.
In the lawsuit against USHBB and its principals, the Receiver evaluated the next steps in proceeding toward the close of discovery.
Money In and Out
To date the Zeek Receivership has recovered approximately $363 million of stolen investor funds, $320.3 million of which have been disbursed to victims.
The Receivership returned $47.2 million dollars to Zeek Rewards victims during the first quarter.
Remaining funds yet to be distributed stand at about $43.5 million.
As of March 31, 2017, the Receivership Estate held approximately $42 million in the Affiliate Payments Account and approximately $1.5 million in the Holdback Account.
A copy of the Zeek Receiver’s “Quarterly Status Report Q1 2017” and accompanying exhibits are available from the Zeek Receivership website.
Update 4th May 2017 – A hearing on VictoriaBank’s Motion to Dismiss was held as scheduled on May 3rd. The matter has been taken under advisement.
Update 24th May 2017 – Howard Kaplan and the Receiver held a Mediated Settlement Conference on April 24th, the outcome of which was an “impasse”.
Pending a settlement later on, looks like Kaplan wants to take the matter to trial.
The latest on the case docket is an amended answer to the Receiver’s initial complaint filed by Kaplan on May 18th.
Update 7th June 2017 – Howard Kaplan’s case continues toward trial.
An order made on June 2nd has set discovery due January 2nd, 2018, motions due January 30, 2018 and a trial to be scheduled sometime after February 28th, 2018.