Frequently Asked Questions

What is a Receiver?
A Receiver is an individual appointed by the United States District Court as a neutral party to assume control over assets that are the subject of a dispute. As in this case, the District Court provides instructions in the form of a court order concerning the receiver’s various responsibilities, duties and tasks.  Here, Mr. Stapleton was appointed as the Receiver.  Mr. Stapleton was given the task of identifying all assets of the Receivership Entities. The Preliminary Injunction Order (see Case Documents page) calls for the Receiver to marshal and preserve assets and to clarify the financial affairs of the Receivership Entities.  The Receiver makes periodic reports to the Court.

Will I be receiving distributions?
The Receiver understands that certain investors had been receiving periodic distributions from the Receivership Entities. At present, the Receiver has determined that no further distributions will be made. The Receiver has no estimate as to when or if there will be funds available to make distributions to investors in the future. Such distributions will depend upon, among other things, the outcome of the underlying lawsuit by the Securities and Exchange Commission and the amount of money recovered by the Receiver.

Do you have an estimate of what percent of our original investment may be returned to us in the form of a distribution?
It is simply too early to make such an estimate.  The Receiver will provide updates on potential recovery as the case evolves.

Can I write off my investment loss?
The Receiver cannot give tax or other legal advice. You might want to give a copy of the SEC Complaint and Preliminary Injunction (see Case Documents page) to your accountant or tax advisor and seek their advice.

How do I file a claim?
If and when assets are recovered and there are funds in the receivership estate which are available for distribution, a claims process will be established and you will be given notice of how to file a claim.  As a first step in this process, investors will receive a proof of claim form. Please do not file a claim or otherwise notify the Receiver of your interest until you receive a formal notice from the Receiver.

How do I contact the Receiver?
If you have questions or concerns, you should write the Receiver at the following address: 514 Via de la Valle, Suite 210, Solana Beach, CA  92075, USA.  You may also communicate via email through this website.  Due to the large volume of calls, and to keep down the cost of the receivership, it may not be possible for the Receiver to return investor calls.  Therefore, please try to refrain from calling the Receiver.  The website will be the primary source for case information and will be updated to reflect significant receivership events.

Can we get more real time updates on your website?

The Receiver will file periodic reports with the court and the reports will be uploaded to the website.  The website will also be updated whenever there is something substantive to report.  Website visitors may request an email when the website is updated by submitting their email address in the “Newsletter” field at the top of this page.

Who does the Receiver work for?

The Receiver is an agent of the Court and therefore works for the appointing Judge.  The beneficiaries of the Receiver’s work are all of you, the investors and creditors.  Some investors have expressed the mistaken notion that the Receiver is adversarial to them.  This is absolutely not so.  It is just the opposite of that.

Is the Receiver under any time constraints by the Court and the SEC?
There are no specific time frames specified by the Court.  In addition, investors are advised that the receivership is part of Securities and Exchange Commission lawsuit enforcement litigation.  Litigation by its very nature takes time.  Notwithstanding the foregoing, the Receiver intends to move as quickly as possible, given the circumstances, but respectfully requests investors to be patient.

Will unsecured creditors and investors be treated equally?

We don’t have the answer to this yet.  In some receiverships, where the majority of funds that came into a business are derived from investors, courts have approved distribution plans that treat investors more favorably than creditors.  In other receiverships, where there was a business being conducted and funds that came into the business were not derived mostly or solely from investors, distributions plans have been approved that treat investors and creditors equally.   The Receiver is doing a forensic accounting that will help guide his recommendation for a distribution plan, but it will be some time before any recommendation is formulated and presented to the Court for consideration.