Reuters.com of Europe picked up this article 11/19/2007
Recently appointed Trustee to the 1031 Tax Group case, Jerry McHale, has produced a newsletter outlining the latest information regarding Ed Okun’s assets, their disposition, and related court matters. The following link, provided by Okun victim Elizabeth Callanan in a comment on deansguide, is a vital source of information for any investors attempting to find the latest news on the case: http://trustee1031taxgroup.com/content/view/14 .
The newsletter is packed with important information. Here are some of the highlights:
1. Jerry McHale the U.S. Bankruptcy Court appointed Trustee for the 1031 Tax Group investors stated in his newsletter the following regarding JPS Capital’s role in the case to this point with the newsletter being dated November 18, 2007:
“Acting on a Memorandum Opinion Granting Motion for Appointment of Chapter 11 Trustee issued by Judge Glenn on October 23, 2007, the US Trustee’s Office named and the Bankruptcy Court appointed me (McHale) as the Chapter 11 trustee in the 1031 bankruptcy cases. This occurred after the proposed reorganization plan collapsed when the proposed JPS funding of a substantial loan to Mr. Okun failed to materialize.“
2. Two of Mr. Okun’s vehicles were the only assets, according to McHale, that “. . . were not transfered to the trustee: a Lamborghini and a Hummer.”
3. Homes on Hibiscus Island in Miami and in New Hampshire remain Mr. Okun’s assets.
4. Assets of Interest Turned Over: West Oaks Mall (Houston) currently in bankruptcy and under the control of another trustee in Virginia; Crossroads Trucking and Logistics, a business according to McHale that is in financial trouble; and a 130,000 ft warehouse outside of Shreveport, Louisiana, part owned by Mr. Okun, that is currently being leased by FEMA.
5. State of the Real Estate: Mr. McHale’s following assertion may be what people expected but it remains the most disturbing news to me: “. . . upon receipt of the real estate, virtually all of the operations were suffering serious operational difficulties and most were operating with negative cash flows. Also, virtually all of the properties have non-conventional lenders providing financing at relatively high interest rates. It appears that Okun’s properties have significant debts and in some cases, he further sold interests to third parties as tenants in common. Consequently, the equity position available to the creditors in this case is nowhere as high as initially believed by the creditors in this case.”
Mr. McHale goes on to detail the “top notch team” put in place to execute the monetization and liquidation of assets. The list of team members performing these duties and their areas of expertise:
* Boardwalk Partners (Upstate New York) will handle “operating properties” and the real estate end of the liquidation. Curiously a website for this group is difficult to find therefore no link was provided.
* Deloitte-Touche is being retained to review the assets and strategize their eventual and hopeful liquidation.
Mr. McHale’s job will be a large one but he seems more than capable. I am neither a legal analyst nor an advisor. If you have a stake in this case always perform your due diligence with an attorney or certified tax adviser in order to obtain the best possible advice.