Frequently Asked Questions

Below are answers to questions commonly submitted to the Receiver.
Click on a particular question below or scroll down to read all of the information.

What is a receiver?

How does a receivership work?

Who is Michael J. Quilling? Is he an employee of the Securities and Exchange Commission?

How are the Receiver and his legal and accounting professionals paid?

Can the Receiver give me legal advice or should I hire an attorney to help me in this case?

Does the SEC get a portion of the money held by the Receiver?

What do I need to do?

When will I receive a claim form?

When will I receive my portion of the funds? How much can I expect?

What is a receiver?
Black's Law Dictionary defines a receiver as:

"A person appointed by a court for the purpose of preserving property of a debtor pending an action against him, or applying the property in satisfaction of a creditor's claim, whenever there is danger that, in the absence of such an appointment, the property will be lost, removed or injured. An indifferent person between the parties to a cause, appointed by the court to receive and preserve the property or fund in litigation, and receive its rents, issues, and profits, and apply or dispose of them at the direction of the court when it does not seem reasonable that either party should hold them. A fiduciary of the court, appointed as an incident to other proceedings wherein certain ultimate relief is prayed. He is a trustee or ministerial officer representing court and all parties in interest to litigation, and property or fund entrusted to him. "

Black's defines a Receiver pendente lite as:

"A person appointed to take charge of the fund or property to which the receivership extends while the case remains undecided. The title to the property is not changed by the appointment. The receiver acquires no title, but only the right of possession as the officer of the court. The title remains in those in whom it was vested when the appointment is made. The object of the appointment is to secure the property pending the litigation, so that it may be appropriated in accordance with the rights of the parties, as they may be determined by the judgment in the action."

How does a receivership work?
No two receiverships are exactly the same. The basic structure, however, involves an independent person appointed by the Court (the Receiver), who is charged with collecting and liquidating assets of the Defendants and Relief Defendants. The receiver sends claim forms to each creditor (including investors) and makes a recommendation to the Court about those that should be approved. After the Court has considered the claims, the Receiver submits a plan for distributing the funds that he has collected. In almost every instance, the funds are distributed pro rata to each investor holding a valid claim. For example, if there are $1 million dollars of claims and only $100,000.00 of funds, each claimant would receive 10% of their claim.

Who is Michael J. Quilling? Is he an employee of the Securities and Exchange Commission?
Michael J. Quilling is a lawyer engaged in the private practice of law through the firm Quilling, Selander, Cummiskey & Lownds, P.C., 2001 Bryan Street, Suite 1800, Dallas, Texas 75201. Mr. Quilling is an AV-rated lawyer and is board certified by the Texas Board of Legal Specialization in the areas of civil trial law and business bankruptcy law. Mr. Quilling is an experienced receiver and has been appointed at the request of the Securities and Exchange Commission in other cases requiring a receiver. Mr. Quilling, however, does not work for or take instructions from the Securities and Exchange Commission ("SEC"). He is appointed by and answers directly to the United States District Court. Since Mr. Quilling serves at the SEC's request, he does work closely with the them and tries to respect their position regarding his duties as Receiver.

How are the Receiver and his legal and accounting professionals paid?
On November 17, 2006 the Court issued its Order Appointing Receiver. Paragraph 18 of that Order provides as follows:

The Receiver shall file on at least a quarterly basis an application for approval of the disbursements for professional fees and expenses to himself or others. The Receiver may pay up to 90% of the professional fees and 100% of the expenses on a monthly basis, provided statements are made on a monthly basis to the Commission, no objections thereto have been presented and applications have been made as required. Any and all costs incurred by the Receiver shall be paid from the Receivership Assets.

This means that all fees and expenses are ultimately subject to Court approval and will be paid out funds collected by the Receiver.

Can the Receiver give me legal advice or should I hire an attorney to help me in this case?
The Receiver cannot and will not give any legal advice with respect to this case. Therefore, should you believe that you need an attorney, you may hire your own. Please be aware, however, that the Receiver is acting in the interests of all investors by identifying, locating, and liquidating assets as quickly as possible and efficiently paying those proceeds to legitimate investors claims. There is nothing that an attorney can do to expedite that process or increase the amount that you ultimately receive. Most likely, an attorney will only be able to obtain information that is already made available on this website. and through periodic letters from the Receiver.

Does the SEC get a portion of the money held by the Receiver?
No, the net of all funds obtained by the Receiver will be paid to investors on a pro rata basis.

What do I need to do?
Investors should gather their contracts, records of payments and receipts, and any other documents relating to their investment. Once claim forms are sent out, those records will greatly assist both the investor and the Receiver.

In the meantime, the Court has appointed an Examiner in this case to monitor the Receiver's activities, communicate with investors, and to voice the investors' collective interests on matters before the Court. Investors are encouraged to view the Examiner's website at www.abcexaminer.com.

When will I receive a claim form?
The Receiver will send claim forms to all investors once those forms have been approved by the Court. To view the most recent motions and orders before the Court, click here.

When will I receive my portion of the funds? How much can I expect?
It is far too early for the Receiver to project how much will be collected, what return investors can expect, or when the Court will approve the distribution. However, based upon facts known to the Receiver at this time, there will be enough funds collected to make a distribution in this case.