UPDATE - 11/03/2008

The Receiver has filed a Seventh Motion to Allow "A" Claims. See Claims Information below:

UPDATE - 10/14/2008

The approval of the proposed sale brings us one step closer to a distribution.  The focus of the Receiver will now shift to closing on the sale, and addressing the remaining objection brought by Mr. Diaz, who appears to intend to appeal the Court's ruling.  Additionally, the Receiver has been actively engaged in completing the claims process, and clearing the way for closing the case and effecting a distribution.  Although it is difficult to predict what else may arise, these are the primary matters that must be resolved before a distribution can occur.  The resolution of Mr. Diaz's objection may take some time, and depends upon how quickly the Court responds and whether Mr. Diaz seeks interlocutory review of the Court's ruling.   The Receiver also has outstanding claims against third parties that he believes should be resolved first, given that it would be logistically difficult and expensive to do an interim distribution.  He is not presently able to predict more specifically when all of these matter will be concluded, but he does not expect to do so before some time next year.  

UPDATE - 10/07/2008

The Receiver has filed a Sixth Motion to Allow "A" Claims. See Claims Information below:

SALE HEARING UPDATE - 10/6/2008

An evidentiary hearing was held on the Receiver's Motion to Sell All Insurance Policies on September 23-24, 2008, at 9:00 a.m. before U.S. Magistrate Judge Ramirez, as scheduled.  At the commencement of the hearing, an auction was conducted.  The high bidder was Settlement Group, Inc., who bid $33.5 million for the portfolio.  Testimony was thereafter presented by the Receiver and certain investors. The Receiver urged the Court to accept the bid as being in the best interest of all investors. Those investors who were present primarily objected that a final effort should be made to market the portfolio with the benefit of an updated LE analysis. The Court considered and rejected that view. The Examiner and the Taiwanese investors also presented the objections previously raised and more specifically set forth in the Examiner's Report. The Court overruled the objections, and approved the sale. A memorandum opinion and order was issued today. Click here for a copy.

SALE HEARING UPDATE - 09/16/2008

As previously reported, the Receiver's Motion to Sell All Insurance Policies is set for an evidentiary hearing on September 23-24, 2008, at 9:00 a.m. before U.S. Magistrate Judge Ramirez.

The SEC has now filed a response in support of the Receiver's Motion. Click here for a copy.

Because of the potential number of persons who have expressed an interest in the hearing, the hearing is being moved to a larger courtroom, specifically Room 1525, which is normally Judge Fitzwater's courtroom.

SALE HEARING UPDATE - 09/15/2008

As previously reported, the Receiver's Motion to Sell All Insurance Policies is set for an evidentiary hearing on September 23-24, 2008, at 9:00 a.m. in Courtroom 1566 before U.S. Magistrate Judge Ramirez. A number of questions have arisen as to the hearing, to which the following responds.

The hearing will commence with a final round of bidding. This will occur in such a way as to allow bidding by any interested party who can demonstrate to the Receiver a capacity to pay at least $50 million from liquid funds. After the bidding, there will be an evidentiary presentation. The Receiver will be seeking to show, if appropriate, that the resulting sale agreement is fair, reasonable, and in the best interest of the receivership estate.

A specific agenda for the proceedings is not available. However, the Receiver will proceed on the basis set forth in his Motion, a copy of which is available below. The Receiver will likely present witnesses and evidence in support of his Motion.

The Examiner also expects to comment on the proposed sale. The Examiner has received comments from investors favoring and opposing a sale. Click here for a copy of a Report from the Examiner that is being filed, which provides a summary of the responses received, the Examiner's own analysis, and objections that remain unresolved. For those investors who cannot appear in person, the Examiner will make an effort to present their views for the Court to consider. If you have additional objections that are not set forth in this Report, please contact us, and we will endeavor to present any additional points.

The Examiner will recommend to the Court that any interested investors who appear should be given an opportunity to be heard.  There are limits, however, on the amount of time available, and it is expected that some limits will be placed on the length of time that any particular investor is allowed to speak or to present evidence.  Preparing written questions or statements in advance is recommended.  If there are any witnesses or documentary evidence that you wish to present, it is recommended that advance notice be provided to the Examiner of your intention to do so, and of the time that you believe will be necessary to present the evidenced.

A number of investors from Taiwan have indicated an interest in attending the hearing.  Accordingly, arrangements have been made for simultaneous translation of the proceedings into Chinese.  Anyone needing a Spanish translator should contact us immediately, as presently there are no plans to have a Spanish translator available.

Ultimately, the Court is the one conducting the hearing, and the one making the final decision in this matter.  The hearing will therefore proceed according to the rules and procedures of the Federal Courts of the United States, taking into consideration that the Court is acting in equity.

The hearing will be a public hearing, and so open to anyone who chooses to attend.  No particular form of identification is necessary to gain entrance to the courtroom; a passport or domestic identification will be fine.

Recordings are not allowed.  The federal court will have a court reporter present, who will make a record of the entire proceeding.  The federal courts do not otherwise allow recording equipment in the courtroom.

Following a hearing, the Examiner intends to provide a further report.

IMPORTANT NOTICE - 08/12/2008

On July 30, 2008, the Court entered an Order setting the Receiver's Motion to Sell All Insurance Policies for an evidentiary hearing on September 23-24, 2008, at 9:00 a.m. in Courtroom 1566 before U.S. Magistrate Judge Ramirez. The Receiver anticipates that the Court will oversee the second round of auction bidding for those policies at that time and approve the final sale.

Interested parties may view a copy of the Receiver's Motion to Sell All Insurance Policies, a list of those policies (Exhibit 1), and and the proposed Purchase and Sale Agreement (Exhibit 2). Through this motion, the Receiver asks the Court (1) to set a hearing date to oversee the second round of bidding by auction and (2) to approve the final sale price at the conclusion of that auction.

Over the last several weeks, numerous Taiwanese investors have sent e-mails to the Receiver and Examiner inquiring about the procedures for this sale. In an effort to respond to those questions, the Receiver has prepared a page answering the Frequently Asked Questions about those procedures.

On August 6, 2008, the Receiver also sent a letter to all known investors explaining the procedures for this sale.

UPDATE - 8/04/2008

The receiver has filed a Fourth Motion to Allow "A" claims. See Claims Information below:

UPDATE - 7/09/2008

The Receiver has recently issued responses to frequently asked questions about the proposed sale of the portfolio. Click here to review.

UPDATE - 7/03/2008

After taking into consideration the many comments of investors and discussing the matter with the SEC and the Examiner, the Receiver has decided to move forward with the proposed sale. This sale cannot be conducted, however, without the approval of the Court. The Receiver has accordingly filed a Motion seeking approval [click here for a copy]. In the Motion, the Receiver presents his reasons for moving forward.

If you do not want the Receiver to move forward with this sale, please contact the Examiner to advise him of your objection. You are also entitled to file an objection with the Court. Conversely, if you favor a sale, please advise the Examiner.

UPDATE - 6/27/2008

In light of the fact that we are receiving the same questions from many investors, we are in the process of posting these questions and our responses on the website. As such, we will not repetitively respond to each inquirer.

Update on Sale of Policies

As you may know from the pleadings posted on this site, the Receiver received Court permission to establish a secure website for access to key portfolio documents for interested buyers. Buyers were to submit sealed bids to the Receiver on or before April 30, 2008. The Receiver asked for bids on various groupings of the policies and on the portfolio as a whole.

The plan of the Receiver was to get bids and if a high enough bid was offered, to submit that to the Court for approval. If submitted, all other interested bidders will be invited to the Court house for an auction to occur in the Court house with the expectation that those who did not have the highest bid would over-bid the offer.

The bids have come in and the highest bid was $27,100,000. Although this amount is very disappointing, the Receiver and Examiner have met and given substantial consideration to this bid by virtue of the auction, the likelihood of the bid increasing, the continuing high cost of the premiums for these policies (about a million dollars a month) and alternatives to selling the portfolio.

The alternative that has seriously been considered is whether there are some policies that can be abandoned to save costs, some sold and some held with the hope of maturity. The Receiver would only consider abandoning a policy or policies in the event the premiums are high and the life expectance is long. For instance, one policy is a $2,500,000 policy and the premiums are about 880,000 a year. A plan to abandon some, hold some and sell some has been analyzed and it was determined that it did not present a reasonable chance of a greater return than a sale of the portfolio now.

The Receiver has also been informed by at least two parties that they intend to come to the auction and over bid the high bid.

Accordingly, the Receiver is in the process of signing a contract with the high bidder and preparing the necessary motion papers for the Court to obtain approval to sell the portfolio to the highest bidder at the auction.

Claims Information

  1. FIRST MOTION TO ALLOW "A" CLAIMS (05/01/08) – On May 1, 2008, the Receiver filed a motion to seek court approval of 206 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s First Motion to Allow "A" Claims. Click here to see a copy of the court's Order Approving Receiver’s First Motion to Allow "A" Claims entered 6/03/08
  2. SECOND MOTION TO ALLOW "A" CLAIMS (06/04/08) – On June 4, 2008, the Receiver filed a motion to seek court approval of 216 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s Second Motion to Allow "A" Claims. Click here to see a copy of the courts Order Approving Receiver's Second Motion to Allow "A" Claims entered 06/09/08.
  3. THIRD MOTION TO ALLOW "A" CLAIMS (07/01/08) – On July 1, 2008, the Receiver filed a motion to seek court approval of 226 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s Third Motion to Allow "A" Claims. Click here to see a copy of the courts Order Approving Receiver's Third Motion to Allow "A" Claims entered 07/03/08.
  4. FOURTH MOTION TO ALLOW "A" CLAIMS (08/04/08) – On August 4, 2008, the Receiver filed a motion to seek court approval of 450 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s Fourth Motion to Allow "A" Claims. Click here to see a copy of the court's Order Approving Receiver's Fourth Motion To Allow "A" Claims entered 9/12/08.
  5. FIFTH MOTION TO ALLOW "A" CLAIMS (09/02/08) – On September 2, 2008, the Receiver filed a motion to seek court approval of 505 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s Fifth Motion to Allow "A" Claims. Click here to see a copy of the court's Order Approving Receiver's Fifth Motion To Allow "A" Claims entered 10/03/08.
  6. SIXTH MOTION TO ALLOW "A" CLAIMS (10/06/08) – On October 6, 2008, the Receiver filed a motion to seek court approval of 405 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s Sixth Motion to Allow "A" Claims.
  7. SEVENTH MOTION TO ALLOW "A" CLAIMS (11/03/08) – On November 3, 2008, the Receiver filed a motion to seek court approval of 507 of the investor claims submitted to the Receiver. Click here to see a copy of Receiver’s Seventh Motion to Allow "A" Claims.

There are several things you should know.
First, THESE MOTIONS DO NOT ADDRESS ALL OF THE CLAIMS. Of the thousands and thousands we have received, these are the claims that have been reviewed as of May 1, 2008, and on which the Receiver and the claimant agree. These are being submitted to the court for approval. Once they are approved, the claimant will receive notice from the Receiver that the claim has been approved by the court.

Second, if your claim number and name are not on the lists attached to these motions, that just means that at this time your claim has not been reviewed or there is some issue that the Receiver needs to address with you. IT DOES NOT MEAN THAT YOUR CLAIM HAS BEEN REJECTED. The Receiver will contact you; you do not need to contact the Receiver or the Examiner.

Third, payment of claims will not begin until all claims have been resolved. It is impossible for the Receiver to know how much to pay each claimant until all of the claims have been approved by the Court.

This is a significant step towards completing the claims process. Each month, the Receiver will file a similar motion with the additional claims that he seeks to have approved.

THE RECEIVER HAS FILED AN UNOPPOSED MOTION TO SOLICIT BIDS FOR PURCHASE OF POLICIES AND APPROVE BID PROCEDURES. THE COURT HAS GRANTED THE MOTION. A COPY OF THE MOTION IN ENGLISH IS ATTACHED AT THIS LINK. A COPY OF THE COURT'S ORDER IN ENGLISH IS ATTACHED AT THIS LINK. THE MOTION AND ORDER IN ITS ENTIRETY WILL BE TRANSLATED AND POSTED ON THE CHINESE WEBSITE AS SOON AS POSSIBLE.

If you have an interest in purchasing the portfolio or any one of the individual policy groups that are offered, please follow the instructions at this link. 

UPDATES

QUESTIONS FROM INVESTORS

The Examiner frequently gets questions from investors regarding various issues and on going operations of the Receivership. The questions, as stated, along with the Examiner's answers are accessible by this link and will be updated by adding the new questions and answers as a newly numbered addition at the end of the existing list.

Lawsuit by the SEC:

On November 26, 2006, the Securities and Exchange Commission filed a law suit against ABC Viaticals, Inc, C. Keith Lamonda and Jesse W. LaMonda, Jr. as Defendants. Generally, the complaint also asked for the seizure of property and records owned by LaMonda Management Family Limited Partnership, Structured Life Settlements, Inc., Blue Water Trust and Destiny Trust. A copy of the Complaint can be accessed by this link. The SEC's reasons for filing the suit are explained in the Complaint.

The Court also entered an Agreed Preliminary Injunction, Order Freezing Assets, Order Requiring an Accounting and Order Requiring Preservation of Documents. The text of this order can be accessed by this link. This order, directed to the Defendants and all those in concert with them, requires that no assets be spent or transferred, that the Defendants provide an accounting of the assets of ABC Viatical, Inc. and the related entities. It also orders all records preserved.

Appointment of a Receiver:

The Complaint was filed in the United States District Court for the Northern District of Texas and the Judge in the assigned court entered an immediate order appointing a Receiver over all of the defendant entities named in the case. Michael J. Quilling, Esq. was appointed as the Receiver. He has extensive experience as both a recevier for various companies and as a receiver of viatial based companies. The Receiver has very broad powers, including the authority to seize all of the property of the entity defendants and to take the necessary action to preserve and protect the assets of the entity defendants for the benefit of the investors. A copy of the Order Appointing Receiver can be accessed by this link. The order was an "agreed order" meaning that the defendants agreed to the court entering the order against them.

Appointment of an Examiner:

On November 29, 2006, the Receiver filed a motion requesting the appointment of an Examiner. On November 30, 2006, the Court entered an order appointing Steven A. Harr, Esq. as Examiner in this matter. A copy of the Motion can be accessed by this link. A copy of the Order Appointing Examiner can be accessed by this link. The Examiner has been appointed by the court to keep investors informed of the key events in the proceeding, to field investors emails and calls, to gather information and input from investors from time to time on key issues before the Recevier and the Court and to monitor and advise the Receiver on his actions with the best interests of the investors in mind. The Examiner can be accessed by email to ABCexaminer@munsch.com. If you do not have access to email, you can leave a voice mail at (214) 740-5112.

Anticipated Events over the Course of the Receivership:

At this point, the specifics of what will happen in the Receivership are not completely clear. However, there are some common events that can be explained and are fully anticipated to occur.

Marshalling of Assets: The Receiver is charged with gathering and preserving the assets of the Defendants. Of course this includes the insurance policies held in trust. There may well be other assets including real estate, personal property and claims against third parties for the return of money to the receiver. The assets will be gathered and to the extent it is wise to do so, liquidated to create cash that can be returned to the investors. No decision has been made on whether the insurance policies will be liquidated or held to maturity.

Determination of Claims: The Receiver is also charged with determining who has invested money with the Defendants, gathering proof of those investments and determining, though a court approved process, the method for fixing the amount of those claims. Investors will get specific information on this process. Investors do not need to do anything at this time.

Return of Investments: At some point in the future, the Recevier will apply to the court to take the money he has gathered from the assets and pay it to those who have an approved claim. This usually occurs near the end of the Receivership. There is no way at this time to project when that will occur or the amount of money that each investor will be paid.

PLEASE RETURN TO THIS WEBSITE REGULARLY.
IT WILL BE UPDATED AS NEW INFORMATION IS AVAILABLE.

YOU CAN CONTACT THE EXAMINER BY WRITING AN EMAIL TO
ABCexaminer@munsch.com OR BY CALLING (214) 740-5112.