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Trustee’s July and August Newsletter
September 7, 2008
Dear Exchanger-Victims and Other Interested Parties,
I apologize for the delay in writing the newsletter. It just seems that every time I start drafting one, things are so fluid and I delay the draft in hopes I can give you a better update. I have finally decided that may not be possible so here’s the best update I can give you.
Many have inquired about our progress with the insurance matters and other litigation issues. Try as I may, I am unable to give anyone any specifics as I have been chastised by my counsel against such disclosure. Trust me when I say that it goes against my open nature and I know how frustrating it must be not to have your questions answered in detail. With respect to the crime policies, I can tell you that on July 30 we filed a very comprehensive supplemental proof of loss, containing extensive analysis. I intend to seek recovery of all losses suffered by the 1031 Debtors. We are in communication with the crime insurers, and will do our best to further your interests.
On the litigation front, we have commenced an action against JPS and other parties asserting an interest in the New Hampshire lakeside mansion seeking to get the 1031 Debtors’ $5.1 million repaid first from the sale proceeds. With respect to most of the other targets, we either have complaints ready (or nearly ready) to go, or are engaged in discussions with them. The extensive database developed by Deloitte provides an invaluable roadmap to pursuing these claims. Although, as mentioned, I am constrained in what I can say, I will tell you that, based on the current status, I believe that there will be a distribution to the creditors, although it is too early to estimate the distribution percentage.
Additionally, we continue to negotiate a sale of Salina and are still dealing with Cordell regarding Shreveport.
We have received approximately $520,000 from the sale of the Connecticut condos, approximately $100,000 for the sale of the some remaining “toys” and $550,000 for the West Oaks mall settlement.
On the criminal case front, as many of you are already aware, Richard Simring has pleaded guilty along with David Field. The trial for those who did not plead guilty, i.e., Okun and Lara Coleman, is scheduled for January 2009.
We continue to obtain and review documents, interview witnesses and take depositions to refine our claims and identify additional ones. I intend to pursue all meaningful claims and causes of action to ensure that the creditors receive the greatest distribution possible.
Thanks again for your continued support and your patience.
Best Regards,
Gerard A. McHale, Jr.
Gerard A. McHale, Jr.
Chapter 11 Trustee
The 1031 Tax Group, LLC.
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