I am sending this message to make sure that net-winners understand that there is an opportunity for settlement, but that the window for the opportunity is closing- Kenneth D. Bell, Court-appointed receiver.
The court-appointed receiver pursuing the recovery of funds for victims of the $600 million ZeekRewards Ponzi scheme has issued an ultimatum to those 'net winners' who were fortunate enough to profit from their investment: contact the Receiver by May 31, 2013 or prepare to be sued. The receiver, Kenneth D. Bell, issued a message to those net-winners today via a post on his website, www.zeekrewardsreceivership.com, that he has established as a resource for victims. Bell has previously estimated that approximately 80,000 such net winners exist, and were fortunate to have realized collective profits totaling nearly $300 million.
In the letter, Bell provided an overview of settlement efforts to date with net winners that he viewed as positive. He indicated that he would continue those settlement efforts until May 31, 2013, and would then initiate litigation against those net winners that did not initiate settlement talks. and indicated that he planned to initiate litigation against net winners if he is not contacted by May 31, 2013.
Bell disclosed that he had received a warm reception from those net-winners who have contacted him, indicating that he had reached a number of settlements ranging from approximately 40% - 80% of those individuals' net winnings. As is typical, investors that are able to present proof of financial hardship are able to reach discounted settlements. Alluding to the costs that clawback litigation would entail, Bell indicated that any potential settlement would be subject to a consideration of the legal costs associated with pursuing clawback litigation.
However, Bell cautioned that not all net winners would be offered the ability to negotiate a discounted settlement, possibly alluding to the stance he would take against those net winners who had a larger role and profile than the typical victims. Bell had previously indicated in his periodic updates that he was considering litigation against a number of third-parties, including insiders and those with significant involvement with the company. The basis for those claims would hinge on the contention that those individuals either knew - or should have known - that Zeek was a fraud, and that by lending their support and recruiting others to join Zeek, helped to perpetuate the fraud. Indeed, there exists the possibility that, under state fraudulent transfer laws, Bell could seek to recover a net winner's entire investment - including that individual's principal investment.
The letter is the latest in Bell's efforts to recover profits from net winners. In November 2012, Bell sent out approximately 1,200 subpoenas to net winners that had profited most from their investment in Zeek. Taking the same firm position as he has since his appointment, Bell promised that he was
committed to pursue the full court process necessary to obtain personal court judgments against 'winning' participants and recover all money owed to the Receivership estate."