The last post on this blog, Receiver's Incompetence Causes Judge to Cancel Trial, created record traffic to this site and an immediate flurry of activity by the Mantria Ponzi victims. The post also got the Receiver to respond (full email below), finally, and most likely because the post provided the contact information for the judge that appointed him and the co-CEOs at this firm - his bosses.
This was the first time in 93 days that the victims heard from the Receiver, though he promises monthly updates. After this amount of elapsed time since the last update and with the change to the schedule, including the cancelled trial, I am sure one would expect great nuggets of information. Well, if so, you were disappointed.
Receiver's Latest E-mail Communication
Here are the highlights from his email (full email below):
That's it. I know, I know, I am disappointed too. If you have been reading this blog you knew all of this months ago plus a lot more and I definitely do not receive $320/hour to provide these updates - actually, I receive nothing, zero, nada.
In addition to this email, the Receiver provided his latest quarterly report (see full content below). Let's see if we can find some nuggets that will help the community understand what is going on and if the Receivership should continue.
Eleventh Quarterly Report
Here are the highlights of the 5 pages, as it is still mostly copy and paste of old material from the last 10 quarterly reports:
• Rebuttal Expert Disclosures: May 24, 2013
• Discovery Cut-off: June 3, 2013
• Dispositive Motions: June 17, 2013
What did we Learn from this Communication
There are only three new pieces of information:
Has Your Opinion Changed?
My opinion has not changed. Judge Jackson "reluctantly" canceled the trial knowing that it is the trial date that is the biggest motivator for the defendants and the Receiver wants us to understand that he amended the schedule to, perhaps, give more time to the negotiations that have gone nowhere for the last 3+ months. Sorry, this is not a valid reason or strategy, in my opinion.
The only reason for the Receiver to ask for extensions of deadlines was because he was not ready, not to give more time to mediation. The trial date is the carrot to get the defendants to settle and by pushing the trial to an unknown time in the future will not help with mediation. Does one need to be a lawyer to understand this flawed strategy?
In addition, the fact that he is telling the victims he has not be in touch with the DOL for some time now, yet telling the court that he was in touch during the last quarter is puzzling. The employees had stolen from them their 401ks, benefit payroll deductions, and some still have outstanding expense reports (some are owed more than $20k! on credit cards) and the Receiver has not even attempted to get this money, or at least stay in touch with the DOL. Under ERISA, Daniel Rink (CFO) and Troy Wragg (CEO) can get jail time for this, just so you understand how serious the law is around this, yet he cannot help the employees or assist with the ERISA criminal prosecution. Did he forget to contact the DOL? Did his Microsoft Outlook reminder fail to alert him? I don't know, but this is an important detail for the employee victims.
What are your thoughts? Did your mind change? Use the comments below if you want to share.
------------------------------------------
Receiver's Email on Sunday evening, February 10, 2013
Dear Investors, Creditors, and Former Mantria Employees:
Attached is my most recent quarterly status report. Included as an exhibit to this Status Report is the ruling by the judge regarding the Defendants’ motion to dismiss on the class action lawsuit that the investors brought.
As of the date of the attached report and, to my knowledge, as of the date of this e-mail, there has been no ruling on the Defendants’ motion to dismiss the Receiver’s lawsuit against the Gatekeepers.
I and my counsel are continuing to pursue our case against the gatekeepers. Parallel to these cases, all of the parties – Defendants, the Class-action Plaintiffs, and the Receiver – have retained a mediator to try and settle those claims. As of the date of this e-mail, no settlements have been reached with any of the parties. Because of privilege issues, I cannot disclose the substance of these negotiations to you. I know that this may not much comfort to you and you are all eager for information, but I am limited in what I can discuss.
I know the Department of Justice and Department of Labor (regarding ERISA issues with employee retirement plans) were investigating the matter. However, I have not heard from them for some time now. I will contact them this week to see if I can determine what the status of their investigation is, but I should note that they have no duty to report to me regarding the status of any investigation. In fact, if there is a grand jury that is impanelled, then I will probably not be able to find much out. In any regard, I will let you know what I discover.
Sincerely yours,
John Paul Anderson, CFA, CPA
Senior Director
Alvarez & Marsal Global Forensic and Dispute Services, LLC
707 Seventeenth Street, Suite 2125 | Denver, CO 80202-3324
Direct: 303.704.4549 | Mobile: 303.803.8579 | Fax: 303.704.4229
This was the first time in 93 days that the victims heard from the Receiver, though he promises monthly updates. After this amount of elapsed time since the last update and with the change to the schedule, including the cancelled trial, I am sure one would expect great nuggets of information. Well, if so, you were disappointed.
Receiver's Latest E-mail Communication
Here are the highlights from his email (full email below):
- I and my counsel are continuing to pursue our case against the gatekeepers. Parallel to these cases, all of the parties – Defendants, the Class-action Plaintiffs, and the Receiver – have retained a mediator to try and settle those claims. As of the date of this e-mail, no settlements have been reached with any of the parties. Because of privilege issues, I cannot disclose the substance of these negotiations to you. I know that this may not much comfort to you and you are all eager for information, but I am limited in what I can discuss.
- I know the Department of Justice and Department of Labor (regarding ERISA issues with employee retirement plans) were investigating the matter. However, I have not heard from them for some time now. I will contact them this week to see if I can determine what the status of their investigation is, but I should note that they have no duty to report to me regarding the status of any investigation. In fact, if there is a grand jury that is impanelled, then I will probably not be able to find much out. In any regard, I will let you know what I discover.
That's it. I know, I know, I am disappointed too. If you have been reading this blog you knew all of this months ago plus a lot more and I definitely do not receive $320/hour to provide these updates - actually, I receive nothing, zero, nada.
In addition to this email, the Receiver provided his latest quarterly report (see full content below). Let's see if we can find some nuggets that will help the community understand what is going on and if the Receivership should continue.
Eleventh Quarterly Report
Here are the highlights of the 5 pages, as it is still mostly copy and paste of old material from the last 10 quarterly reports:
- The Receiver and the Investors’ class-action counsel participated in mediation on November 1, 2012, with the Defendants. The mediator is Judge Richard Dana of Judicial Arbiter Group, Inc. in Denver, Colorado. There was no resolution of any of the issues at the conclusion of this mediation; however, Judge Dana continues to be actively involved in mediating the issues among the parties.
- Because of time constraints, coupled with the Receiver and his counsel’s desire to avoid unnecessary legal and discovery costs while negotiations were ongoing, the Receiver’s petitioned the Court in his litigation against the Gatekeepers to amend the scheduling order. This motion was also made because it is the understanding of the Receiver that some of the Defendants have depleting insurance policies.
- On January 2, 2013, the Receiver’s counsel filed a Second Unopposed Motion to Amend the Scheduling Order. Judge Jackson approved this motion on the following day. The trial date has not been rescheduled, but the following deadlines have been established:
• Rebuttal Expert Disclosures: May 24, 2013
• Discovery Cut-off: June 3, 2013
• Dispositive Motions: June 17, 2013
- As of December 31, 2012, the Receivership Estate had approximately $618,000 in cash on hand. This is down from the $635,000 that the Receiver had on hand at September 30, 2012.
- The Receiver has been in contact with the U.S. Department of Labor (“DOL”) regarding the use of employee funds to pay investors or the failure of a certain entities governed by the Order to properly fund employees’ retirement accounts. The Receiver remains in contact with the DOL regarding these issues.
What did we Learn from this Communication
There are only three new pieces of information:
- New deadlines, again without the biggest motivator for the defendants - a trial date!!!
- We know that another $17,000 was drawn from the limited cash in the last quarter.
- We learn there is a contradiction between the Receiver's email and his quarterly report to the court regarding the Department of Labor (DOL). He wrote in his email, "I have not heard from them for some time now", but in his quarterly report he wrote that he remains in contact with the DOL. I would assume that since this is a quarterly report the reader would assume that the Receiver was in touch during the last quarter and I would not refer to last quarter as "some time now". Would you?
Has Your Opinion Changed?
My opinion has not changed. Judge Jackson "reluctantly" canceled the trial knowing that it is the trial date that is the biggest motivator for the defendants and the Receiver wants us to understand that he amended the schedule to, perhaps, give more time to the negotiations that have gone nowhere for the last 3+ months. Sorry, this is not a valid reason or strategy, in my opinion.
The only reason for the Receiver to ask for extensions of deadlines was because he was not ready, not to give more time to mediation. The trial date is the carrot to get the defendants to settle and by pushing the trial to an unknown time in the future will not help with mediation. Does one need to be a lawyer to understand this flawed strategy?
In addition, the fact that he is telling the victims he has not be in touch with the DOL for some time now, yet telling the court that he was in touch during the last quarter is puzzling. The employees had stolen from them their 401ks, benefit payroll deductions, and some still have outstanding expense reports (some are owed more than $20k! on credit cards) and the Receiver has not even attempted to get this money, or at least stay in touch with the DOL. Under ERISA, Daniel Rink (CFO) and Troy Wragg (CEO) can get jail time for this, just so you understand how serious the law is around this, yet he cannot help the employees or assist with the ERISA criminal prosecution. Did he forget to contact the DOL? Did his Microsoft Outlook reminder fail to alert him? I don't know, but this is an important detail for the employee victims.
What are your thoughts? Did your mind change? Use the comments below if you want to share.
------------------------------------------
Receiver's Email on Sunday evening, February 10, 2013
Dear Investors, Creditors, and Former Mantria Employees:
Attached is my most recent quarterly status report. Included as an exhibit to this Status Report is the ruling by the judge regarding the Defendants’ motion to dismiss on the class action lawsuit that the investors brought.
As of the date of the attached report and, to my knowledge, as of the date of this e-mail, there has been no ruling on the Defendants’ motion to dismiss the Receiver’s lawsuit against the Gatekeepers.
I and my counsel are continuing to pursue our case against the gatekeepers. Parallel to these cases, all of the parties – Defendants, the Class-action Plaintiffs, and the Receiver – have retained a mediator to try and settle those claims. As of the date of this e-mail, no settlements have been reached with any of the parties. Because of privilege issues, I cannot disclose the substance of these negotiations to you. I know that this may not much comfort to you and you are all eager for information, but I am limited in what I can discuss.
I know the Department of Justice and Department of Labor (regarding ERISA issues with employee retirement plans) were investigating the matter. However, I have not heard from them for some time now. I will contact them this week to see if I can determine what the status of their investigation is, but I should note that they have no duty to report to me regarding the status of any investigation. In fact, if there is a grand jury that is impanelled, then I will probably not be able to find much out. In any regard, I will let you know what I discover.
Sincerely yours,
John Paul Anderson, CFA, CPA
Senior Director
Alvarez & Marsal Global Forensic and Dispute Services, LLC
707 Seventeenth Street, Suite 2125 | Denver, CO 80202-3324
Direct: 303.704.4549 | Mobile: 303.803.8579 | Fax: 303.704.4229
RSS Feed