FAQS THE PURPOSE OF THIS SECTION IS TO PROVIDE VERY GENERAL ANSWERS TO QUESTIONS
MORE FREQUENTLY ASKED AND SHOULD NOT BE RELIED UPON AS PROFESSIONAL ADVICE. THE
CREDITOR AGENT AND HIS COUNSEL CANNOT GIVE LEGAL ADVICE AND ALL READERS SHOULD OBTAIN
INDEPENDENT ADVICE FROM THEIR OWN LEGAL COUNSEL.
How can I find out what is happening in the bankruptcy case?
The Creditor Agent has established this website which will be frequently updated as new developments
occur in the case. You should also check the links provided to other websites which are posting
information relating to the cases; however, the Creditor Agent cannot attest to the completeness or
accuracy of information posted on other sites.
When can I expect a distribution?
Currently, the Creditor Agent cannot project a distribution date. This case involves a large
investor/creditor class with investments that total in the hundreds of millions of dollars.
There is a lengthy history of investment in a diverse and complex group of holdings. Moreover,
the books and records are disorganized and in many instances incomplete. All of these elements
indicate a long-term resolution that could encompass several years.
How do I contact the Creditor Agent?
Due to the large number of potential claims against the estate the Creditor Agent is unable to
immediately return inquiries via telephone. However, your concerns are very important to him.
The recommended method of communication is via email –
cladekcreditoragent@burr.com.
You may call and leave a voicemail message at 1-(866) 443-1597 or you may also send inquiries via
regular mail. Regular updates will be posted on this website and you are urged to visit this site
frequently to check for developments.
General tax matters.
The Creditor Agent
and his professionals cannot provide any advise with respect to tax matter. You
must consult with your tax advisor to determine the proper tax treatment of transactions
associated with your investment/bankruptcy claim.
How close are you to determining the net winners and net losers?
The Creditor Agent anticipates having the analysis completed within the next 60-90 days.
Can we get a list of who the net winners are?
The Creditor Agent is unable to provide this list to third parties since the list itself is covered under attorney-client privilege (work product).
What rules are you using to make this determination?
Although the Creditor Agent is permitted under the Bankruptcy Code to seek recovery of all funds received by an investor during the 4 years prior to the petition date, the Creditor Agent has chosen only to seek recovery of those funds received by investors within the 4 years prior to the petition date which exceed the principal amount of that investor (the "net winner" amount).
When do you expect to determine the number and value of shares for each creditor?
The outcome of each claim will determine the number and value of shares. Therefore, the number and value of all shares will not be fully determined until objections to claims are resolved.
Assuming this process involves the review of claims, what opportunities will creditors have to review and (as necessary) appeal any changes to the value of their claim?
If there is a basis for which an objection is to be made to a claim, counsel for the Creditor Agent will file an objection with the Bankruptcy Court. The objection will specify the amount of time a claimant has to file a response to the objection.
When will we know the total number of shares in Integrity that each account can expect?
If there is no objection to an investor's claim, the total number of shares distributed to that investor can be determined relatively quickly in accordance with the bankruptcy Plan. However, if an objection is filed to an investor's claim, the total number of shares will not be determined until after the Court rules on the objection to the investor's claim.
Do you expect it to take the whole 5 years for the distribution and (if so) is there any way to speed up the process?
TheCreditor Agent expects that distribution will be largely achieved within 2-3years.At this point, however, the Creditor Agent cannot be certain whether it will be possible to complete the distribution in less than 5 years. Full distribution will depend upon various factors, including the length of adversary proceedings in the bankruptcy case, the liquidation of assets, and collectability of judgments.
There are three areas of potential recovery: preferences, real estate and clawback.
What is the status of recovery actions?
The Creditor Agent has filed preference law suits, some of which have resulted in settlements. The Creditor Agent's efforts to pursue fraudulent transfers are on going and lawsuits will be filed against those parties who received fraudulent transfers. As for real estate, any real property which had equity was marketed and sold. Any property that showed no equity was abandoned by the creditor agent.
What approach are you taking to maximize creditor return for each of these areas?
For example, what are the rules you are using to decide whether or not to take clawback actions? What is your timetable for each?
The Creditor Agent and his professionals are minimizing the amount of administrative expenses necessary in order to maximize the return to the creditors. As stated above, the Creditor Agent has determined which real properties had equity and marketed those properties in order to maximize the return to the estate. Any real property which did not have equity was abandoned due to the lack of equity to the estate after consideration of mortgage liens, related expenses and maintenance of the property.
For the fraudulent transfer actions, the rules are dictated by the Bankruptcy Code and Florida law. As stated above, although the Creditor Agent is permitted under the Bankruptcy Code to recover all funds received by an investor during the 4 years prior to the petition date, the Creditor Agent has chosen only to recover funds received by investors to the extent they received payments on account in excess of the funds paid in to the account, without inclusion of interest (the "net winner" amount).
The Creditor Agent expects to have all adversary cases filed within 60-90 days, although the statutory deadline for filing such actions is not until April 5, 2012.
What net amounts do you reasonably expect to recover (after your costs) per $1000?
Per $1000 collected or value of claim reduced, the Creditor Agent expects to have approximately $500-$550 available for distribution directly to creditors, after payment of costs and expenses. The Creditor Agent and all of his professionals have voluntarily agreed to a percentage cap of their fees and costs in order to ensure a substantial return to Class 10 creditors.
How much might be expected in March 2012?
It is impossible to predict the exact amount that will be available at that time. As of July 15, 2011, however, the Creditor Agent has successfully collected for the creditors' benefit approximately $700,000 net after payment of fees and costs.