SUBMIT YOUR CLAIM FORM!

keep-calm-and-please-hurry-upThis is likely going to be our last post / email blast regarding Zeek Rewards. It has been a little over a year since the company was shut down by the SEC. I know the company’s demise resulted in a lot of frustration, anger and pain. I’ve talked with people that literally lost their entire life savings. I’ve even talked with people that walked away with six figures in earnings and blew it all on frivolous expenses, stressing over ways to pay it back. Bottom line: it was bad for a lot of people.

But for those of you that lost money, there’s an opportunity to get most of it back. SUBMIT YOUR CLAIM! The receiver is charged with doling out the funds to the net losers in a fair and equitable fashion. He’s not able to do it unless you submit your claim. The deadline for the submissions is September 5. In his most recent letter sent two weeks ago, Ken Bell said,

If you have not completed and fully submitted a claim through the Receiver’s online Claim Portal or through alternative means expressly authorized by me in writing prior to 11:59pm prevailing Eastern Time on September 5, 2013, your claim will not be counted and you will not receive a distribution on account of any amounts that Zeekrewards may owe you.

The official website for the claims process is: http://www.zeekrewardsreceivership.com/. There’s a “FILE A CLAIM” button right in the middle of the site. Push it. Since it’s in electronic format, the submission process could not be any simpler. This firm actually considered helping participants file their claims. But the online portal is so simple, there’s just not much for us to do. Please submit your claims before the deadline. According to the receiver, hundreds of thousands of participants have not filed their claims. And when you submit your claims, try to follow the instructions as closely as possible. If you miscalculate your investments in Zeek, it may result in serious delays and / or a rejection of the claim.

Promises Made / Promises Kept

When we first created this site, we made four commitments: (1) we were going to provide the information for free; (2) we were never going to use your email address for anything other than posts from this site; (3) we were going to make it easy for you to stay informed; and (4) we were going to help with the claims process. The 4th commitment is a moot point. The online claim portal is simple. We’ve honored the other three. I want to send a special thanks to all of the contributors on this site: Walt Burton, my law partner; Jordan Maglich, Ponzi Tracker; Phillip Young, bankruptcy attorney and receivership specialist; and Len Clements, MLM consultant.

If you want to stay informed on what’s happening in the MLM industry, please provide your email address below. I’d love for us to stay in touch. If you’re getting this message via email, please click the link to subscribe to my newsletter.


Sincerely,

+Kevin Thompson

Ken Bell’s most recent update can be found below. If you’re reading this in your email inbox, it can be found here.

Zeek Receiver Seeks Approval of Claims Process, Notice Procedures, and Proof of Claim Form

The court-appointed receiver overseeing the $600 million ZeekRewards Ponzi scheme has filed a motion seeking approval of a claims process to compensate what could be nearly 1 million victims.  In a 21-page motion (the “Motion”), the receiver, Kenneth Bell, seeks court approval for the proposed procedures and manner of filing claims to be used by victims, as well as the use of an online claims submission form. Victims would be notified by email, would have 120 days from the Order approving the Motion to submit their claims, and any late-filed claims would be disallowed in their entirety.

The Proposed Claims Process

In the Motion, the Receiver estimates that while approximately 1 million affiliates paid money into Zeek, over 800,000 suffered losses, and the remainder were fortunate enough not only to recoup their principal investment but may also have profited.  Should the Court approve the Motion in its current form, the Receiver proposes that he will provide notice to all interested parties via several methods:

  1. Making the Claims Process publicly available on the Reeiver’s website at a soon-to-be-functional Claims Portal;
  2. Emailing all known affiliates through email addresses obtained from Receivership records and collected at the Receiver’s website;
  3. By U.S. Mail to trade creditors and other known, non-affiliate creditors; and
  4. Publishing the Receiver’s Notice on the Receiver’s website, certain multilevel marketing sites, certain newspapers, and sending the Notice to certain trade groups in the financial industry.

As previously alluded to in earlier articles on Ponzitracker, the Receiver cites the “great cost” of serving the over-2 million claimants by any other method and seeks court approval for the proposed notice procedures.  As a last resort, should an email be found to be no longer valid, the Receiver will attempt service of the notice by an alternative method, which includes a different email address or postcard to the last known address.

Within 14 days of court approval of the Motion and included in the court-approved notice to claimants, the Receiver proposes to have a Claims Portal active on his website, www.zeekrewardsreceivership.com.  According to the Receiver, the Portal is “designed to capture the claims of all Claimants…in the most cost effective way possible.”  Thus, all claimants, whether affiliates or non-affiliates, should files claims at the Claims Portal.  Indeed,

Failure to submit a validly completed claim on the Claim Portal (or by alternative means that are agreed to between such Claimant and the Receiver prior to the Bar Date) will preclude a Claimant from receiving a distribution from the Receivership Defendant regardless of the validity of the Claimant’s claims.

The Receiver proposes that, if a Valid Proof of Claim is not received by any claimant within 120 days from the date of the Order approving the claims process, that claim shall be forever barred and precluded from sharing in any distribution.  As the Receiver has already collected over half of what he estimates are the $500-$600 million in losses, this could be a substantial penalty for those who fail to timely follow the claims procedures.

The Claim Form will allow each claimant to upload supporting documentation, if any, for its claim that may be helpful to the Receiver and his team.  The failure to provide any documentation will not automatically cause that claim to be disallowed, but could delay approval – and payment – of the claim. Before submitting any claim, each claimant will be required to attest under penalty of perjury that the supplied information is accurate.

VIP Points Not Allowed

One issue of note is the Receiver’s proposal to omit any inclusion of “Retail Profit Points” or “VIP Points” in the calculation or determination of any claim.  Akin to interest, the VIP Points were accrued by purchasing sample or VIP bids and then re-distributing them to retail customers or back to Zeek.  The VIP Points then allowed the affiliate to participate in the daily percentage payout from Zeek, which averaged approximately 1.5%.  As is universally understood in other receiverships, victims of Ponzi schemes are entitled only to their lost principal balance, and not to any fictitious interest (or, in this case, points) that they may have accumulated.  Indeed, especially since the vast majority of Ponzi schemes are unable to accomplish a total return of victim losses, allowing interest as part of a valid claim would reward some victims at the expense of others.

A copy of the Motion is here.

See below for a copy of the proposed online Claim Form. If you’re reading this via email, click this link to see the claim form.

What is a Receivership?

Receivership statutes are very complex and are often misunderstood, even by experienced attorneys. A receivership is similar to a bankruptcy proceeding, but with a few important differences. First, unlike bankruptcies, receiverships can be filed in either state court or federal court. In a receivership, the person appointed to take control of the assets (the “receiver”) is generally bound by the powers and restrictions contained in the court’s receivership order. In Zeek’s case, the receiver is Ken Bell.

IF I AM OWED MONEY BY A COMPANY IN RECEIVERSHIP, IS IT JUST GONE?

Not necessarily. While each receivership is different, many receiverships return money (called a “distribution”) to its creditors. If you’re reading this, it’s likely that you’re a “creditor” looking for answers regarding your piece of pie. Some receiverships result in a 100% distribution; others result in little or no distribution. A receiver is charged with protecting all receivership assets, liquidating those assets, evaluating all claims filed by the receivership’s creditors, and making a distribution to all legitimate creditors. The receiver is also charge with pursuing assets from some of the “winners” in the scheme i.e. investors that pulled out significant gains. This is known as “Clawback Litigation.” The receiver may also file suit against third-party vendors that profited by supporting the scheme. The receiver ordinarily files periodic reports with the court, updating it on the value of the receivership’s assets and the amount of money spent by the receiver in carrying out his or her duties. A distribution is normally made near the conclusion of the receivership matter, which can be months or even years into the proceeding. In this case, we expect this to be a very long and complicated matter.

IF I AM A CREDITOR OF A RECEIVERSHIP, WHAT CAN I DO TO PROTECT MYSELF?

First, try to stay well-informed. Carefully read any notice or update that you receive from the court or the receiver. If other information is readily available, keep yourself updated on the status of the receivership case. Most importantly, it is vital that you complete a proof of claim form within the timeframe established by the receiver. If you are a creditor of a receivership, you should receive a claim form and instructions in the mail once the claim process has been approved by the court. It is critical that you carefully and accurately provide all of the information requested (including supporting documentation) and return it within the time allotted by the receiver. If you fail to submit a claim, if you submit incorrect or incomplete claim forms, or if you fail to submit the claim form in a timely manner, the receiver may refuse to allow your claim and you may miss out on a distribution.