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CA Lawyer
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Category: Bankruptcy Law
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Experience:  Bankruptcy Attorney
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My family & I lost over few millions dollars on investments

Customer Question

My family & I lost over few millions dollars on investments with ABFS as they declared bankruptcy in 1/2005. There were many class suit action for the investors. Recently a settlement came in for 33 M. The Estates Trustee and platiff firm decided to split 50/50 on this settlement. Thereafter we received a month late notice stating that after 30% lawyers fees and cost what left is distributed to notes share holder on a pro-raata of 2.5 cents on a dollars. Since the deadline already passed [we did not get notice from them] we had no choice but rush our POC to them with consent on said distribution. Thereafter we wrote and ask our rights and other Senior collateral note holder rights in regard to the un equality of various notes since the senior collateral notes have twice the value of the regular notes. What would you advise us to do at this juncture?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  CA Lawyer replied 5 years ago.
Was the settlement within the bankruptcy case?

Was the settlement involving a Chapter 11 plan?

What was the claims bar date?

Did your investment have a security interest in any assets?

Customer: replied 5 years ago.

I am uncertain to answer directly-

The plaintiff class suit action handled by a different law firm- The Trustee of ABFS estates was appointed by the US Bankruptcy court. In two separate law suit they both sue the defendant ABFS executive and Board of directors for fraudulent acitivty and deceived the investors. I do not know why the settlement split- I was told that is to fund them continue with their suit in order to get more money for the investor [I'm not sure that is true because the decision was made without the investors vote]

 

I beleive it involves chapter 7

 

2/1/09

 

yes- Those were back up by ABFS assets. Supposely the Sr collateral Notes have twice values as the regular notes because in Nov 2004 prior to ABFS declared its bankruptcy [1/22/05] it sent out notice announcing how well the company were doing and urge the investors to convert their notes into Sr. collateraql notes and 50 % of that notes to ABFS stock that give 10% interest. Thus literally the actual value in dollars of Sr. Collateral notes have twice of its surface value.

 

 

Expert:  CA Lawyer replied 5 years ago.
This is a really complex question. I don't believe I could adequately answer it on this forum. I would suggest getting a consult with a creditor-side bankruptcy attorney in your area tomorrow that can look at the docket on pacer (I could, but it would cost me money).

My thought is that if you consented to the distribution as proposed by the trustee, you would have to withdraw your consent and object to the proposed distribution at the hearing where the trustee is attempting to obtain approval. However, local rules might require you to file an objection within a certain time-frame before the hearing. If there is a good reason why you didn't you could probably get the bankruptcy judge to extend the time deadline or continue the hearing on approval of the distributions. Sometimes just filing the objection will get the trustee to talk to you and work out the issues with you before the next hearing date.

Given that I basically told you to go consult with an attorney, I don't really expect you to click accept, so don't feel like you have to (although its ok if you do).



Customer: replied 5 years ago.

I was told that the objection filing is passed [2/1/09 or 2/2/09]. Though I have good reason that we did not receive notice on time . Last minute submission really make me nervous.

 

On 1/28/09 I have written letter to show my onjection to the firm. They also telephonically advised me that there was other people who filed objection with the court as to the equality of all various notes types and the amount of fees given to lawyers - The objector think 30% of 16.5M is way too much considering the investor retrieves 2.5 cent on a dollar. When I telephonically voiced my issue that I did not allow ooprtunity to raise objection, The firm said with other filed objection the Court may not allow such distribution anyway.

Would those above information adequately protected us under this circumtances?

Expert:  CA Lawyer replied 5 years ago.
I would suggest filing a formal written objection with the Court, even if it is late the Court would still likely consider it, especially if there were circumstances justifying the lateness.

In order to be certain, you could apply for an order extending time to file the objection based upon the late notice.




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