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| Forms and Instructions - Recent Status - Chapter 11 Trustee Reports - Creditor's Comm. Updates - Contact Information |
October 25, 2002 Trustee's Report EVERGREEN SECURITY, LTD CASE NO. 01-00533-6B1 TRUSTEE REPORT TO CREDITORS’ COMMITTEE October 25, 2002 Ladies and Gentlemen: My last report to the Committee was July 10, 2002. This report will not repeat my prior reports, which can be found at www.evergreencreditorscommittee.com. Evergreen funds in excess of $3.7 million have been deposited to the bankruptcy accounts since my appointment through September 30, 2002. Four of the six managers of Evergreen have settled for $560,000 in cash, three pieces of real estate with an appraised value of over $1.2 million and cooperation in other litigation. The cash was received in October and the real estate is in the process of being titled into the name of Evergreen. One piece of real estate is under contract for $700,000 and my motion for sale will be heard on November 4, 2002 in Orlando. Two additional managers have responded to the suit and their trials should be held in the later this year. Surety Bank and Trust, Ltd. in the Bahamas is in liquidation. I have filed a claim with the bank's liquidators in the amount of $5.1 million. The liquidators for the bank have estimated Evergreen may receive $4 million to $5 million, upon liquidation. The liquidation was scheduled to be completed by September, but is still in process. I prevailed in my turnover action against Intrados in US Bankruptcy Court. Intrados has terminated their US counsel and is not responding to the US case. I have begun litigation in Costa Rica. The Atlantic Portfolio Analytics & Management, Inc. (APAM) suit for $8.5 million was stayed until November 4, 2002 by a motion from the District Attorney for the County of New York. The NYDA had a criminal case against Mr. Huggins and Knight, the principals in APAM, who were arrested in August. The NYDA's motion to continue this stay will be heard in Orlando on November 4, 2002. The Zylka suit includes twenty-seven defendants, which received part of the $27.7 million taken from Evergreen by William J. Zylka. These suits are in the discovery stage and should be tried this fall or next spring in Orlando. I have settled with the wife and two daughters of William Zylka for all of their corporate assets, six automobiles and percentages of the proceeds from the sale of their residence and real estate held in a trust for the two daughters. My motion to approve this settlement is scheduled to be heard in Orlando on November 4, 2002. The automobiles were sold at auction in New York in late September for $187,000 after expenses of the sale. James Conroy's, attorney for William J. Zylka, criminal trial in New York ended up in a mistrial. He will be retried during 2002 on the same charges. He is one of the defendants in the Zylka suit, above. In May I filed fraudulent transfer suits against seventy-six brokers for in excess of $8 million of commissions. During this quarter I filed a motion to dismiss twenty-six of these cases due to lack of evidence of payment of the commissions. As I recover more documentation on payments to brokers, I may re-file these cases. I asked the Court to allow a test case against one of the brokers, Harold James Kime & First American Life and Health Insurance Corporation, to determine the Court's ruling on the law. The Court approved the test case and it is scheduled to be tried on December 11 and 12, 2002. Subsequent to the test case, I will ask the Court to order mediation in the other broker suits. Many of the investors provided me information relating to their brokers. This information was extremely helpful in the suits against the brokers. It would be helpful to know who investors made personal contact with, other then their broker and the six managers of Evergreen. If you had direct contact with an employee or representative of Evergreen, please send me their name, address, the time period and a brief description of your contact. My civil suit in the Bahamas against Gregg A. White, the owner of Evergreen from its incorporation until 1999, for in excess of $50 million is in the discovery stage and has not been set for trial. A fraudulent transfer suit for $100,000 was filed in US Bankruptcy Court during July 2002 against Mickey Fouts, a consultant, who was paid from the funds taken from Evergreen by William Zylka. There were over 3,800 claims filed for over $350 million. I reviewed these claims and have filed objections for over 2,700 claims, which total over $235 million. Many of the objections were for filing duplicate claims, claims filed by trustees without identification of the investor and claims filed with an amount in excess of the amount Evergreen's records. Notices of my objections were mailed by the Court on September 9 and September 30, 2002 to the address on the Proof of Claim Form. If your claim was filed by a trustee or other representative and it listed their address, the notice was mailed to them. If you would like to provide me with any information in this case, please mail, fax or e-mail it to me. I have listed my numbers below. You should continue to contact the Creditors’ Committee web site for information in this case. Also many newspapers have carried articles about this case. The largest collection of articles can be found at www.orlandosentinel.com. R. W. (Bill) Cuthill, Jr., CPA, CFE Chapter 11 Trustee Cuthill & Eddy LLP 1031 W. Morse Blvd., Suite 200 Winter Park, Fl 32789-3750 Phone 407-644-7455 Fax 407-628-5277 e-mail rcuthill@cuthilleddy.com |
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| Official Committee of Unsecured Creditors for Evergreen Security, Ltd. |