JPS Answers the Bell: Finally Some Good News For Okun Investors, A Lesson for deansguide

Like a bolt out of the blue skies, I received an email that is good news for the investors in the 1031 Tax Group case. I made a mistake and was hasty in reporting that JPS Capital had removed themselves from the 1031 Tax Group settlement. How do I know that I had my facts wrong? The following was sent to me by Mr. Joel Shapiro, principal, of JPS Capital Partners LLC.

Before I continue I must say that I am honored that Mr. Shapiro or anyone of his stature is spending time to read this tiny blog of mine. Back to business, Mr. Shapiro’s comment on my Oct 26 article “1031 Tax Group Reorganization Plans Stymied: West Oaks Mall Files For Bankruptcy Protection Leaving Investors Reeling” is much welcome news for those people who have suffered through this ordeal.

Thank you Mr. Shapiro for stepping to the plate to help these people. Thank you for giving us the correct information and I hope that this information is circulated throughout the investor community. Here is Mr. Shapiro’s correction of my initial impression:

“Having read your October 26, 2007 article on the 1031 Tax Group Reorganization, we want to contact you to correct any misimpression that you have with respect to JPS Capital Partners role in this transaction. We would ask that you update your story to reflect the statement below:

“JPS issued a $300 million Term Sheet to Edward Okun on June 20, 2007 based upon representations made by Mr. Okun as to the value of his assets. After performing due diligence it became apparent that the values represented to JPS could not be verified. Based on the values that we were able to verify, JPS issued a commitment to Okun for $148,625,000 on October 8, 2007. This commitment provided Okun, and by extension the creditors, with $20 million at closing and with the ability to receive up to an additional $125 million over the ensuing 24 months, through profit participation as the assets are liquidated.

This is a plan designed to maximize value for the Estate and its creditors, given the values of the underlying collateral.”

Joel G. Shapiro
Principal
JPS Capital Partners LLC
200 West 57 Street
Suite 303
New York NY 10019
212-790-6714

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4 thoughts on “JPS Answers the Bell: Finally Some Good News For Okun Investors, A Lesson for deansguide

  1. Phx,

    Yes it is some great news really. Again thanks to Mr. Shapiro’s announcement. Let’s all cross our fingers and hope that the investors outcome is positive indeed.

    Dean

  2. Dean: Please post this information of a bill introduced in Congress last August. It’s to protect 1031 exchanger’s money through a federally insured program. Though it doesn’t help us current train wreck victims, it will hopefully keep it from happening to others in the future. People need to contact their congressmen in support of the bill.

    http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.3420:

    H. R. 3420
    To amend the Internal Revenue Code of 1986 to require the use of Federally insured intermediaries for nonrecognition treatment on like-kind exchanges involving cash to be used to acquire the replacement property.

    IN THE HOUSE OF REPRESENTATIVES

    August 3, 2007
    Ms. ZOE LOFGREN of California introduced the following bill; which was referred to the Committee on Ways and Means

    ——————————————————————————–

    A BILL
    To amend the Internal Revenue Code of 1986 to require the use of Federally insured intermediaries for nonrecognition treatment on like-kind exchanges involving cash to be used to acquire the replacement property.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

    SECTION 1. SHORT TITLE.

    This Act may be cited as the `1031 Regulation Act of 2007′.

    SEC. 2. FEDERALLY INSURED INTERMEDIARIES REQUIRED FOR LIKE-KIND EXCHANGES INVOLVING CASH TO BE USED TO ACQUIRE REPLACEMENT PROPERTY.

    (a) In General- Subsection (a) section 1031 of the Internal Revenue Code of 1986 (relating to exchange of property held for productive use or investment) is amended by adding at the end the following new paragraph:

    `(4) REQUIRED USE OF FEDERALLY INSURED INTERMEDIARIES FOR EXCHANGES INVOLVING CASH TO BE USED TO ACQUIRE REPLACEMENT PROPERTY- Paragraph (1) shall not apply to any exchange as part of which cash is received by the taxpayer which is to be used to acquire like-kind property unless such cash is at all times before being so used held as a deposit in–

    `(A) any insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), or

    `(B) any insured credit union (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)).’.

    (b) Effective Date- The amendment made by this section shall apply to transfers after the date of the enactment of this Act in taxable years ending after such date.

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