Panel Discussion re. Zeek – Google Hangout

The panel discussion regarding Zeek Rewards last week was a huge success. Surprisingly, there were hardly any glitches with the technology. We got over an hour of solid content locked down in the video below. It was a great discussion with multiple lawyers and professionals familiar with the Zeek Rewards case. As many of you know, the Receiver sent out approximately 1,200 subpoenas recently requesting information from many of the “net winners.” This batch of subpoenas re-ignited a host of questions from both the winners and losers affiliated with Zeek. It’s my strong professional opinion that the needs between the winners and losers are unique and at odds with one another. The “net losers” want the receiver to recover as much money as possible so as to maximize the payout to the victims. In order to make the cash pot larger, the receiver is compelled to recover funds from the people that earned more from Zeek than they “invested” / spent into the program. In other words, the net losers want / need clawback litigation to occur. On the other hand, the people that earned more money than what they invested / spent, they’ll likely want to hold onto the cash. They’re going to argue that they earned the money, spent the money, etc. Both sides have unique issues. With lawyers positioned on both sides of the issue, we compiled a panel to answer the following questions:

Can the receiver pursue Zeek participants that reside overseas?
When does it make economic sense for a receiver to sue a net winner?
If a receiver gets a judgment against a net winner, what can he do with it?
What does the claims process look like for the net losers?
When can people expect a distribution of cash?
If an affiliate paid taxes on the income, how do they get the tax money back?
And we address a host of other question.

In the Hangout, we had the following participants

+Kevin Thompson, (MLM lawyer)
Jordan Maglich (Ponzi Tracker)
Len Clements (Market Wave)
Troy Dooly (MLM Help Desk)
Walt Burton (Commercial Real Estate attorney)
Phillip Young (Corporate Litigator / Bankruptcy Lawyer)

The information is free of charge. We hope you find the video informative. Also, as a reminder, if you’d like to unsubscribe to these updates, there’s an “Unsubscribe” button on the bottom of this email.


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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.