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.

Zeek Recovery, update 1

On Sunday, our law firm first published a form to solicit information from anyone negatively impacted by Zeek Rewards and seeking answers.  In response, over the last 5 days, you and over 15,000 other individuals submitted personal information to us regarding the details of your investment.  The stories are heartbreaking.  While some of you were aware of the risk, it appears that the vast majority of you were simply trusting friends and peers who introduced you to Zeek as an investment opportunity.  Some of you cashed in your 401(k)s, some of you invested college tuition money, and others invested their life savings in search of investment returns.

Many of you are personally devastated.  “Ok, now what?”

Before assembling this list of Zeek participants, we thought our role in this process would be to “get involved” by charging a small fee to each of you for legal representation.  After much consideration and debate, the answer has become crystal clear.  You’ve been through enough and probably don’t want to spend anymore of your hard earned money at this point.

During the last few days, we’ve consulted numerous professionals, including a renowned class action attorney, a ponzi scheme specialist, and a bankruptcy and receivership attorney, regarding development of a strategy to seek recovery of your investment in Zeek Rewards.  At this point, the consensus is that there is no clear legal course of action that will yield a more favorable result for you than cooperating with the receiver.  We will continue to monitor the receiver’s actions closely and will notify you immediately if we think a different course of action is needed.

With this in mind, we’ve created the Zeek Recovery site, which can be a trusted resource to assist you during your journey through the receivership process.  As part of this endeavor, we’ve assembled a roster of professionals, all agreeing to provide information free of charge on the site, as follows:

Our Commitments

  • We’re never going to charge for the information on this site.  Based on what you’ve endured, it’s just not fair.  We’re going to provide the information, free of charge, no strings attached;
  • We’re never going to provide your information to anyone, ever.  The information that you submitted on the form and continue to submit will remain strictly confidential.  Our firm, Thompson Burton, has possession of the list, and we’re not going to provide it to anyone without your permission;
  • We’re going to make it easy for you to stay informed.  All updates will be sent via email, unless you unsubscribe from this list.  We will provide you with consistent updates on Zeek, including information about the claims process, interpreting messages from the receiver, explaining court filings, important deadlines, etc.  While the receiver has published a website, it will likely only include court filings and occasional updates.  We intend to dive deeper and help you make sense of it all with interesting articles and useful information.  The receiver’s website can be found here; and
  • We’re going to provide resources to help you complete the Proof of Claim Forms.  This is the most important document in the process.  If there are any discrepancies between the receiver’s data and what you report, it gives the receiver an opportunity to reject your claim and you may not get paid.  If you would like assistance with this part of the process, you can retain us for a small fee to assist you on an individual basis.

We are humbled by your responses to our online form, and we sincerely appreciate the trust that you have placed in us.  We’re deeply sorry for the struggles many of you are enduring, and we hope to shed some positive light during this time.