In response to a recent claim that JPS Capital sent a offer sheet for $148 million to Ed Okun and the US Trustee in charge of managing the settlement for creditors in the 1031 Tax Group case, Trustee Jerry McHale flatly denied such an offer with accompanying documentation was made to him. When told that JPS Capital’s Joel Shapiro asserted that a offer sheet for $148 million had been submitted, in writing, to Mr. McHale’s office, Mr. McHale responded with the following:
“Certainly if Mr. Shapiro wants to make the $148 million loan to Mr. Okun or wishes to purchase all of the assets that were recently transferred to me in the Asset Transfer Agreement approved by the court, I would certainly be more than willing to accept that $148 million so that I could distribute it to the creditors so that we can all get on with life.”
Mr. McHale’s comment is in response to my article dated November 20 “JPS Capital’s $148 Million Dollar Commitment To Mr. Okun and the Creditor’s Committee: Why Is 1031 Tax Group Trustee Not Acknowledging This Loan?” This article was based upon the following comment left on this blog by JPS Capital principle Joel Shapiro:
“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
JPS Capital Partners LLC
200 West 57 Street
New York NY 10019
Oct 29, 1:46 PM
It was recently brought to my attention that deansguide is a relied upon source of information by creditors. The same creditor who told me this also pointed out that creditors reading this blog may get the wrong impression if I report that JPS is funding a settlement. The fear according to my anonymous friend was that people may use the information on deansguide to wait for a settlement or plan their own recovery strategies.
NOTE: Always and I mean Always perform your due diligence in any settlement case with the advise of an attorney, tax specialist, CPA, or licensed financial planner. Do NOT utilize this blog as your SOLE source of information when making vital and important decisions regarding your financial future!
My wishes go out to all involved in this case for a speedy and satisfying recovery!