Updates

Update - March 15, 2008

Litigation:

As you may recall from prior updates, the Receiver has filed suit against Erwin & Johnson LLP ("E&J") and Christopher R. Erwin ("Erwin") in their respective roles associated with being the former trustee for ABC. E&J and Erwin filed a Motion to Dismiss for Lack of Standing and a separate Motion to Dismiss the Receiver's claims. The Receiver filed responses and E&J and Erwin filed their replies. The court has now ruled on the motions, granting them in part and denying them in part as follows:

E&J and Erwin complained that the Receiver did not have standing to bring a claim for breach of contract against each of them. The court denied E&J's motion and granted Erwin's.
E&J and Erwin complained that the Receiver did not plead enough facts regarding his claims of breach of fiduciary duty and fraudulent transfer. The court denied E&J's and Erwin's motion.
E&J and Erwin complained that the Receiver did not have standing to bring claims for breach of fiduciary duty. The court denied their motions.
Erwin complained that because he was not a party to the contracts with ABC, claims could not be brought against him for fraudulent transfer, breach of fiduciary duty, negligence and professional malpractice. The court denied Erwin's motion.
E&J and Erwin complained that the Receiver did not have standing to bring claims for aiding and abetting a breach of fiduciary duty. The court granted these motions.
E&J and Erwin complained that the Receiver did not have standing to bring claims for aiding and abetting corporate waste. They further complained that a cause of action had not been properly stated against them. The court denied these motions.
E&J and Erwin complained that the Receiver did not have standing to bring negligence and professional malpractice claims and also to dismiss them for failure to state a claim. The court denied these motions.
E&J and Erwin moved to dismiss the Receiver's claims for fraudulent transfer. The court denied these motions.

As such, the Receiver has a number of claims to pursue against E&J and Erwin for damages and he will continue to do so. E&J and Erwin have recently filed Motions requesting that the court reconsider the orders outlined above and have also filed an answer to the Receiver's complaint, counterclaims against ABC Viaticals, Inc. and a cross claim for damages against Mills Potozack & Company, ABC's trustee before E&J.

Claims

The claims process continues. The Receiver expects to start filing motions to approve claims this month.

Sale of the Insurance Policies:

The Receiver has filed an Unopposed Motion to Solicit Bid and Set Sale Procedures. The Motion has been granted. Order . The procedures are set out in the motion. Interested purchasers are beginning to contact the Receiver for bidding information.

We have been told by some investors that they have knowledge of persons interested and capable of purchasing the portfolio and we ask that these investors contact these potential buyers and advise them to monitor this website for the announcement of the beginning of the sale process.

Financial Status:

All policies are paid current. No maturities have occurred although one of the spouses in a large second to die group of policies has passed away. The Receiver has obtained permission from the court to increase his line of credit to fifteen million dollars and that lending has been secured.

Bonding:

Following our update in December, we have received letters and emails from persons claiming to be associated with obtaining the Albatross bonds and the Unicredit Support Letters. We have responded asking for further information that would update our current conclusions regarding these financial instruments. Letters have been issued to Unicredit's General Counsel and CEO requesting their written advice on whether they intend to perform on the support letters as agreed should that become necessary later this year. The Receiver has also written in response to persons purporting to be Albatross management asking for financial information and an opportunity to meet face to face to discuss their future obligations with regard to policies they bonded.

A representative of Unicredit has written in response to the Receiver's inquiry advising that they never issued the letters of support and have had no business whatsoever with Albatross. They maintain that the signatory on the letter did not have authority to act for Unicredit, that the position of the person that signed the letters would not include the power to sign such a letter, and that the person that signed the letters was not employed by the bank at the date of the letters. They claim to have nothing to do with this matter.

No response has been received from Albatross at this time. We continue to believe they are a fraudulent organization that will not perform on the bonds that were paid for by ABC. This site will be updated when the responses are received.