Time flies when it’s the summer and it seems especially true in this case. Significant events have occurred and as they do occur, we try to post these occurrences in real time on the web. If you have been following these events on our web as they unfold, then you know how active this case can be.
First, Lara Coleman and Robert David Field II have been indicted along with Edward Okun. The U.S. Attorney’s office brought superseding indictments against Ed Okun and his insiders on July 10, 2008. Copies of their indictments are available on the website. Mr. Field has pleaded guilty while Ms. Coleman and Mr. Okun have pleaded “not guilty” to the charges. Tentatively the trial date for Ms. Coleman and Mr. Okun has been set for January 19th, 2009. The U.S. Attorney’s office has additionally brought criminal allegations against Mr. Richard Simring, the former Chief Legal Officer for Okun Holdings, Inc.
Meanwhile, we continue to co-operate with the U.S. Attorney’s office. We have also been diligently performing our own investigation and tracing funds that left The 1031 Tax Group debtors. We now have a database of 2 million pages of documents and much work has been done and will be needed to review and sort these to gather useful information for our litigation and case management purposes. Our discovery efforts continue and we have scheduled depositions of interested parties.
I have retained an expert, Alan M. Herbst, as an energy analyst to perform a preliminary analysis of the potential yield of natural gas from the Shreveport facility. At this point there is an element of speculation in that there have been no geological subsurface surveys completed on the property. We are still in litigation with Cordell Funding and Cordell Retirement over the facility. As previously mentioned, my ability to realize value from the Haynesville Shale is dependent upon the results of this litigation, possible settlement negotiations and/or a payoff of the Cordell mortgage on the property. In any event, we will have continued litigation against Cordell. The complaint against Cordell will be filed this week.
Unfortunately, to date, there has been no offer for the Salina Central Mall which makes economic sense to the estate; i.e., a written offer that exceeds $35,000,000, the approximate amount that is owed the lender, and other secured claimants (real estate taxes, unpaid contractors, etc.).
We will have filed the requisite Proof of Loss with the insurance companies by July 31st. After we submit the proof of loss to the insurers, we expect to discuss it with them and answer their questions. We can take no legal action on the policy until the expiration of the 120 days.
We have retained Roseline Tax Advisors, PLLC, to prepare certain tax returns for Ed Okun and his current and former spouse so as to achieve a tax refund for the estate.
We have filed motions to sell the Connecticut condos and the balance of the boats and personal watercrafts. However, to date, an objection has been posted to the sale of these “toys.” One of the wooden boats was taken from a storage facility in Indianapolis by a purported creditor of Ed Okun. We have filed an adversary proceeding in order to re-take possession so as to sell that boat.
The Court ruled on the fee applications and has allowed the agreed-to reduced expenses of the pre-trustee professionals to be paid but not their fees. The Court has permitted payment of the post-trustee fees in the amount of sixty percent (60%) of the amount of fees sought and payment of all expenses. Approximately $3.8 million in fees and expenses was paid out to professionals. I am keenly aware of your sensitivity to professionals’ fees and will monitor my professionals’ fees.
We also realize that we have a long way to go to claims reconciliation but we now have a cleaner and more accurate mailing matrix. We continue to urge everyone to follow directions posted on the web whenever there is a change in address. There was a problem in the first mailing that went out to creditors after the replacement of KCC consultants as Claims Administrator. The contractor on that mailing made appropriate credits and reduced our billings for that mailing.
Again, I thank the vast majority of you for your continued support, understanding and patience in this difficult bankruptcy process. I wish you all a great summer.
The 1031 Tax Group, LLC GerardA. McHale, Jr Gerard A. McHale, Jr., Chapter 11 Bankruptcy Trustee
