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okosh · 08-27-2008, 04:09 AM

Quote:

August 20, 2008
SureInvest Settlement Hearing

Numerous comments were received regarding the recent omnibus settlement motion cited below in the August 18, 2008 post that have brought to my attention that I did not post the SureInvest settlement, motion and notice of hearing. That hearing had been originally set for August 26, 2008. As a result, I have had the SureInvest hearing reset for Tuesday, September 16, 2008 at 11:00 a.m. You will find the notice of hearing, the motion and the settlement agreement in the Documents section herein for your review.

These settlements with the three SureInvest defendants, including Donaker and Herron addressed in this specific settlement, will recover $750,000 when paid in full. That leaves almost $1 million not recovered, or over $300,000 each. We deposed these two defendants and their wives under oath and analyzed where and how the money was spent. A lot of money was spent on their attorneys (2 sets involved), in other business ventures, in their new homes, to pay down debts, and elsewhere. Unfortunately, it is typical that over 8 to 12 months that 95% of the defendants in the CEP cases have spent the money they’ve received from CEP. That’s why settlement is so difficult—the money is never sitting in T-bills earning interest and waiting for me to take it back.

Settlement is a function of weighing how much it will cost to pursue a claim to trial, estimating my likelihood of receiving an enforceable judgment at trial, and assuming success, what is my likelihood of collecting the judgment. And of course, if you succeed in finally getting a judgment, your costs don’t end. You may then have to proceed with post-judgment discovery requesting bank records, taking depositions of the defendant, etc., only to find that the money was spent gambling in Las Vegas.

The SureInvest settlement being heard on the September 16th hearing was the end result of a mediation with an experienced bankruptcy judge who heard both sides, examined the data each had put forward, and made her recommendations. Among other things, this settlement requires Donaker and Herron to sell their houses—into which a lot of this money was invested, and essentially start over. They were not happy with the settlement, I assure you, and neither was I.

SEC v. Colon End Parenthesis Trust LLC