AQA- All Questions Answered Regarding the Reorganization Plan (REJECT IT)

Michael Cooley seeks to pull the wool over our eyes. Accept his advice at our own peril.

We’ve been graced by the presence of Michael Cooley from Akin Gump lately.  Here’s the likely reality of the situation.  He’ll get paid.  We won’t.   Cooley doesn’t care about our plight.  He’s been spreading half-truths in an effort to sign onto his plan.  Cooley will undoubtedly cut and run the second he’s done with this case, leaving us behind to shoo the next group of maggots looking to pick the remaining flesh off our rottNG carcass.  You think this is too severe?  Vote to accept the plan and that’s the very situation we will all be facing.

All editorializing aside, should you have questions or comments that you would like to pose to the group, our trusted experts, or the outsider Cooley, please post them here.

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41 thoughts on “AQA- All Questions Answered Regarding the Reorganization Plan (REJECT IT)

      • AND— The $$$ total of each of their original investment…
        AND— The $$$ total of and dates of ALL their payouts, early and any other time.
        FULL names please.

    • How conflict of interest matters were addressed by the Trustee when selecting the Creditor’s Committee.

      • Mr. Cooley,

        Another regular on this blog posted this question in another thread and you never answered. Please answer it now.

        “By the way, are you billing us for your foray into our blog or is this just extra curricular for you?”

        We would like you to post all of YOUR billable hours for the last 30 days. Of course, the REAL document with your firm’s letterhead. We want it to look at it here in writing. **Especially the time you spend on this blog. Do you get double-time for evenings and weekends? You have posted during those hours especially last weekend leading up to the big phone call.

        • My firm’s invoices are filed of record with the Court in connection with our interim fee applications, which are filed every four months in the case. The most recent one was filed a few days ago, covering the period from January 1, 2012 to April 30, 2012. That, and other court filings in the RE Loans case, are available online at:

          https://www.reloansllc-info.com/CourtFilings.aspx

          My own time is billed at a fixed rate, and does not vary for evenings or weekends. Since at least December 2011, I have served as the principal point of contact for the Committee in answering Noteholder questions, and my contact information has been provided to Noteholders in each letter from the Committee. Over the last several months, I have spent several hours answering questions by phone and email and providing information to Noteholders to help them better understand what is happening in the RE Loans cases. More recently, I have started attempting to answer questions posted to the Committee (or to me) on this blog.

          I take this work seriously, and have gone to significant effort to provide clear, accurate, verifiable answers to questions posed on this blog. It is definitely not “extracurricular.”

          Michael Cooley

          • I read these documents. These do not tell the billable hours and dollar amount from the last 36 days.

            “Since at least December 2011, I have served as the principal point of contact for the Committee in answering Noteholder questions, and my contact information has been provided to Noteholders in each letter from the Committee. Over the last several months, I have spent several hours answering questions by phone and email and providing information to Noteholders to help them better understand what is happening in the RE Loans cases.”

            This is YOUR JOB for God’s sake.

            “More recently, I have started attempting to answer questions posted to the Committee (or to me) on this blog.”

            This was YOUR choice. It is the Committee’s responsibility to answer our questions, NOT to defer us to their Counsel. All of them but one person are not willing to take our questions one on one. There are NO laws that say the Committee is not directly responsible to us. Your APPEARANCE here makes it easier for them to run and hide. Their DISAPPEARANCE from here does not inspire us.

            “I take this work seriously, and have gone to significant effort to provide clear, accurate, verifiable answers to questions posed on this blog. It is definitely not “extracurricular.”

            We take our work seriously also. We have gone to significant effort to find clear, accurate, and verifiable answers and ask questions posted on this blog. It is definitely not “extracurricular” for us either. We are not enjoying one minute of this. WE did not ask for any of it. YOU cannot save the day here. YOU are being paid to decrease our chances of any meaningful recovery by protecting ALL the crooks, in one way or another, but directly the committee. No matter how many times you post, NOTHING changes that.

          • Rose Mary, I am an unhappy investor, too and am not at all pleased with the plan, either. But I don’t believe that Mr. Cooley deserves the vitriol that you and others are slinging his way. I agree with Pete that the investors’ interests, large and small, are best served by civil discourse. Emotion won’t win this for us. We have to remember that this is the RE Loans bankruptcy case, not a civil or criminal lawsuit, which is where more of these issues will, with luck, be prosecuted.

            nal suit

          • “My own time is billed at a fixed rate, and does not vary for evenings or weekends.”

            So there’s his answer, yes, he is billing for the blog.

        • Oh boy, fasten your seat belt when you get a load of the fees and that’s just for this group of attorneys. Walter & gang has become of vehicle for employment of hundreds…and it will be a long employment opportunity at the victims expense. Bankruptcy is a disgrace and a total scam.

          • Yes. Open the link from Mr. Cooley. Scroll down to 05/31/2012, Doc. 896, and 06/01/2012, Doc. 899. They are the most recents submitted billing statements to the court from Akin Gump. These are the Jan 1 to Apr. 30 billing SUBMISSION dates; not the current billable hours. If you were able to keep your breakfast down, grab a big bottle of Pepto and open the other court submissions. They all hope we don’t know where to look for this info and won’t understand it. Submitted legal fees we DO understand. From the crimes of the Ngs/Horowitz, the common sense strategy was to FOLLOW THE MONEY. Do the same here starting with Mr. Cooley. Not hard to figure out where everyone’s priorities are.

          • To Investor:

            Then what does he deserve? He invited himself here. Each of us has our own style of dialogue. This is not a court room. I am well aware this is the RE Loans bankruptcy case. Are you suggesting we give them a pass now and try to make up for it later? I look at it one day at a time. This is the discussion de jour. I have no apologies for anyone who defends a Plan that is designed to shaft us AGAIN. The Plan is in black and white. I comprehend what I read and this is MY interpretation of what it says. I did not ask for and do not need Mr. Cooley’s interepretation, which has more spin than an AIG press release. VOTE NO!!

    • Presently, the members of the Committee are: Pearl Tom (Chair), Elliott Abrams (Vice Chair), Ed Blue, Dixon Collins, Allan Cone (for Patrick Simmons), Steve Fong, Barbara Hamrick, Ron Lavelle (for Sherratt Reicher), Gene Rapp, and Linda Reilly. Ron Nahas also serves as a non-voting member.

      Based on current information, of the 10 voting members, 5 members received distributions totaling approximately $9 million in the aggregate. Those 5 members still hold claims totaling approximately $43.4 million. The other 5 members received no distributions. As a whole, the voting members of the Committee hold claims totaling approximately $76 million–nearly 10% of the losses sustained by Noteholders in the RE Loans case.

      Incidentally, all of this information was provided on Monday’s call.

      Michael Cooley

      • “Incidentally, all of this information was provided on Monday’s call.”

        Incidentally, we prefer it in writing. Please continue:

        1. Names representing both view points?

        2. AND— The $$$ total of and dates of ALL their payouts, early and any other time.
        FULL names please. Not a summation.

        3. How conflict of interest matters were addressed by the Trustee when selecting the Creditor’s Committee.

        • Rose Mary: Who is the “committee” member that is willing to take calls . In your above post you state that “we take our work seriously”…yes we did, we made the 750 million, handed it over to the Ng’s for them to steal and than beat us to death with all the legal misery.

        • I did not mean there was one member willing to take calls. I only know of one who is voting NO. Therefore I hope for an answer to question #1, originally asked by poster goldman.

          • Yes, thanks for the clarification. That person would be Dixon Collins that showed much courage to break with the pack. Somewhere in these blogs he clearly states his reasons, to which I concur. And in defense of you Rose Mary from the post of “An Investor”…i say, had we shown anger, outrage, suspicion to the Ng’s through the years we were deceived we might today be in a different situation. We gave them time and the benefit of doubt to our great peril. These questions should have been asked and addressed long ago. No, we gave them every courtesy and benefit of doubt. Is there any wonder why are fuse is now frayed. Personally, i don’t think i need to talk pretty anymore.

      • 1) Does the 9 million include $3,362,421.64 for Sherratt Rieher?

        2) Could you please give us the break down we want to calculate how the 50% rule works for them.

        3) Did any member of the committee close an account subject to the 5% rule?

        4) Did you obtain any outside ethics experts opinion on the conflict of interest of committee members recommending a plan that works more to their financial interests than those of the majority of noteholders?

        5) In the conference call you touted the Plan maintaining the right of the trust to go after Greenberg Traurig, isn’t it true that REL’s counsel Jeff Krause let the statue of limitations run as to Greenberg?

        6) Didn’t Wells Fargo aid and abet in backdating note transfers to MF08. Doesn’t this an unlawful act?

        7) What if member of Greenberg Wells or Krause become either indicted or unindicted co-conspirators in any federal criminal prosecution? Would this strengthen a Chapter 7 trustees position in obtaining a recovery for the noteholders.

        8) Why hasn’t the committee found a way to challenge DSI legal position visa vi the noteholders. Do you really think that any court would buy that crap? Disenfranchise 1500 elderly retirees in favor of someone with essentially a $125,000 claim and a $800,000 in puffed upped attorney’s fees?

        9) Is MF08 giving up their estates rights against Wells Fargo too?

        10) Isn’t it a little dis-ingeniousness to tell the noteholders that its too much to risk 50-65 million in recovery here but, you still have got your individual rights being pursued by the class action lawyers. Are you really telling people that the estates claims are weaker than the classes on the same set of facts?

        11) Wells Fargo’s lawyers rolled over you in negotiations with each version of the plan they got more and more and the noteholders got less and less. In the beginning they were willing to pay $3 million for their release.

        12) If the Plan is approved your firm will continue to get paid throughout the execution of the plan right?

        • Where is Mr. Cooley’s respone and answer to Equitatus’ post June 6, 2012 @ 11:35 P.M. Mr. Cooley posted today, June 7, 2012 @ 11:20 A.M. and did not address the questions above? Gee, i wonder why?

          • As I indicated in one of my earlier posts, it is our intent to try to answer all questions either on this board or in the conference call. Equitatus as posted a large number of questions, which I may not be able to respond to earlier than Monday’s call. Moreover, several of them are based on faulty premises and require more than a simple answer to provide a meaningful response. For example, Equitatus comments:

            “11) Wells Fargo’s lawyers rolled over you in negotiations with each version of the plan they got more and more and the noteholders got less and less. In the beginning they were willing to pay $3 million for their release.”

            Equitatus is incorrect. As I have said before in answer to this question (and as prior versions of the Plan clearly reflect), Wells Fargo offered to pay $3 million gross ($1.5 million net) in exchange for the release of individual noteholder claims being asserted in the class action, not to settle estate claims. From the start, the Committee rejected that proposal as too low, and opposed any effort to settle individual noteholder claims–those being asserted in the class action–for such a low value. Wells Fargo has never offered any cash payment in exchange for the release of estate claims; rather, the release of estate claims was always stated as the “price” of the exit facility.

            I hope all of you will dial in to Monday’s call, where we will endeavor to answer any and all questions that haven’t already been answered on this blog.

            Michael Cooley

  1. Mr.Cooley, I have read the plan and as I understand it..Wells Fargo is the only winner,
    the plan will keep Mackinac and company well paid while they pick our bones clean.. then when they dont pay Wells fargo…. the Bank will end up with our assets that they got title to illegally ..
    Not too much different than the paper work we got in 2007.telling us we had no choice but to agree….after the deed was done..
    question is , Will a NO vote automatically change your status from class 8 to class 5, and dismiss your claim ??..The way its written, it indicates to me that we must agree..and if we vote No and the plan passes anyway, the no voter would would be the very last in line for distribution..
    I understand that Wells Fargo is allowed to vote..Does Mackinac also get a vote??

    • Elizabeth–

      A “no” vote will not change the status of your individual claim. If the Plan is ultimately approved by the bankruptcy court, then all noteholders will receive the same treatment as Class 8 claims regardless of whether you voted “yes” or “no” or didn’t vote at all. “No” votes are no penalized in the Plan.

      To your other question: Mackinac does not vote on the Plan.

      I hope this helps.

      Michael Cooley

    • You are not the only one that received the notification late…others reported same situation. Monday there is supposed to be another conference call where investors can actually speak. Don’t know if they are sending out new notifications or one is to use the same method of registering, etc. Absurd, this should have been done weeks and weeks ago…talk about the 11th hour!

      • Another call has been scheduled for this Monday, June 11 at 1:00pm PT, and a notice went out yesterday for that call. If you registered for the first call, you are automatically registered for the second call using the same phone number and passcode. If you received the first notice but did NOT register for the first call, you can use the information provided on the first notice to register for the June 11 call–you don’t need to wait for the new notice to arrive.

        Michael Cooley

  2. Mr. Cooley,

    ‘elizabeth’ (and others as well) asked “I understand that Wells Fargo is allowed to vote.” You replied to her message but did not answer the question.

    So, yes or no, is this correct? Please, sir, straight out and plain, answer the question; yes or no.

    If not just we Noteholders, who else will be voting on the ‘plan’.

    • I took from Elizabeth’s post that she was not asking about Wells Fargo; rather, she was asking about Mackinac (and I answered that question). To your question, all creditors holding “impaired” claims in the case vote on the plan in their respective classes. Each group of creditors votes within its own class. Noteholders, unsecured creditors (including MF08), Wells Fargo, and DSI will all vote in separate classes. Any secured tax claim creditors and any priority claim creditors will vote in their own classes, too.

      Michael Cooley

      • “Each group of creditors votes within its own class. Noteholders, unsecured creditors (including MF08), Wells Fargo, and DSI will all vote in separate classes. Any secured tax claim creditors and any priority claim creditors will vote in their own classes, too.”

        For the layman, what does this mean?

        QUESTION:
        ‘IF’ the plan fails for our “class”, does NOT receive in excess of 50% of the vote of the Noteholders and/or 2/3 of the dollar value of the total of those who vote, BUT is passed by the other “classes” you mention (above), then what?

        • Creditors are divided into classes according to the type of claim they hold, and votes are tallied by Class to determine whether each such class has accepted or rejected the Plan. Among other requirements, the Bankruptcy Code requires that at least one class of creditors has voted to accept the Plan.

          If the Plan is rejected by Noteholders, but is accepted by at least one other “class”, the Plan may be confirmed over the objection of the dissenting class if the Plan otherwise satisfies the requirements of the Bankruptcy Code (which are too detailed to list here). Further, the Debtors will in that event seek to subordinate the Noteholders’ claims below the level of all other unsecured claims. The Committee would obviously oppose that effort.

          If the Debtors prevail in subordinating the Noteholder claims, the Plan could be confirmed over the Noteholders’ objection, and Noteholder claims (then subordinated) would be receive distributions only after all other creditors (including MF08) are paid in full. If the Debtors fail to subordinate the Noteholder claims, the Plan is likely unconfirmable on its face and would fail, in which event the case will likely convert to a chapter 7.

          This is explained in more detail in the Commitee’s solicitation letter, and in much more detail in the Plan and Disclosure Statement.

          Michael Cooley

  3. So – interesting that no one ever contacted us (the investors… now I guess note holders) other than a very complicated, unintelligable for lay folks document ..until it looked like there may be some NO votes.. Now Michael P. Cooley is ALL OVER OUR BLOG!! And willing to give us some information…They need to delay the deadline date.. and re-do the plan!!

    I believe that a different ammended plan needs to be devised that would be acceptable to noteholders .. And – I believe that that can be done quickly … if the committee does their job… Enough… Do what you have been paid and granted by the court to do, and develop a plan that is acceptable to all.

  4. I do find it very highly suspect of Mr. Cooley’s attempt to come on this bandwagon. To spread the rumors to vote Yes and the reasons why, he’s going after the undecided to make it sway towards the wrong vote, that being voting Yes. I also find even more suspect of “newbie” names coming along and claiming Yes.

    Are those employee’s of Cooley or is he making up names to look like there’s more voting Yes? Or finding others somehow to sway the vote and cause some confusion? I think so.

    VOTE “NO”!

    • I am “An Investor,” the one who posted to Rose Mary about bringing more civility into the discussion group with the hope of getting more and better information in a businesslike manner. The snarky and sometimes poorly-edited postings do not reflect well on the noteholders and our cause. I can’t speak for other new names on the board, but I am not a “Newbie,” in fact, I have been writing on this message board under another name since the beginning and will be voting NO on the plan. I changed my pen name for the earlier message solely to avoid having my request for civility to be held against me. I am as outraged and devastated financially as many of the noteholders, but don’t believe that Mr. Cooley is the cause of the problem. I don’t know how anyone could expect an attorney (or any professional) to “comp” his time in posting information and responses to questions from the noteholders and interested parties, whether we like the answers or not. Perhaps we are spoiled because Equitatus and others have been so vastly generous with their time and expertise, for which I will be eternally grateful regardless of of the outcome, but I wouldn’t expect an attorney hired by a bankruptcy trustee to work pro-bono. I agree that all the questions have not been fully answered and I am looking forward to the next conference call, which will take place after we have had a chance to absorb the information we received and compare it to the fact situation as we know it. No ill wishes to anyone – we are all in the same sinking boat.

    • I would like to point out that the fallout from this debacle goes beyond the Investors; families have been affected as well. Speaking as someone who has been shoring up a close family member emotionally and financially these past 3-4 years, I find the notion that playing nice will make the least bit of difference in the outcome tragically misguided.

      I have witnessed this person’s life come apart piece by piece and be ground into the dirt. There was nothing businesslike in the rape and plunder of this Investor community. This blog was started as a grassroots effort to unite Investors and try to get information, at least a couple years ago. (I just pulled up posts from the former site from August 2010.) Where was the civil discourse and exchange of information all this time? It doesn’t take a geek to set up a blog or facebook page. For all the millions of dollars that have been paid to Mackinac Partners and the law firms involved, it never occurred to any of these “professionals” to create a public forum to keep you informed of the proceedings and then notify you of the web site address? They obviously had your (home) addresses when they mailed the plan they created, with no input from you, and biased in favor of those who wrote it. And now all of a sudden Mr. Cooley inserts himself, at your expense!!, on the blog you created to try to save yourselves. His loyalty is to his client, who doesn’t seem to be you. With my future at stake, I would expect more direct answers for his billable hours being added to your tab. You will preserve more dignity holding their feet to the fire and forcing them to be accountable for every single bit of what they are “advising” you to buy into.

      Bitter? Totally. And vindictive. I hope each person who had a hand in the creation and perpetuation of this travesty suffers a dose of pain, sorrow, and loss in direct proportion to what s/he caused. Call it karma, if that sounds nicer.

      Vote NO!

    • I listened to the podcast this evening – I heard no Q& A as promised. Is the 6/4/12 Q and A nonexistent? Here are a few questions: How did the 6/20 item get on calendar? – I received no notice of it and Pearl Toms February letter made no direct reference to WF maturity date at 6/30. Speedy exit from Ch. 11???

  5. In all fairness, the truth is that the original teleconference, held this past Monday, was 3 hrs. and 53 minutes long. Almost half of that time was devoted to Q & A, and Messers Gibbs and Cooley stayed with it until every last person who called in got a chance to ask his or her question(s).

    The presentation was well prepared and delivered, and Gibbs and Cooley (as well as representatives of a couple of other firms) did a commendable job of delivering their message.

    In order to reach out to even more Noteholders, and to reinforce their message to those who participated in the first teleconference, they decided to hold a second teleconference next Monday, June 11th, again at 1:00pm PST.

    I listened to the first teleconference and was not convinced by the arguments presented. They were one sided and I am suspect of what we were told. I intend to listen to the next one as well, but the representatives of the ‘Official Committee’ are going to have a very hard time convincing me that we, the Noteholders, are being provided all of the information that we deserve to have in order to make a truly informed decision. I believe that we are being spoon fed only what ‘they’ want us to have, in order to induce us to vote for ‘their’ plan, one which I believe will, unfortunately, be adopted whether the majority of us vote against it or not.

    I believe that adoption of this ‘plan’, much like the one presented us in 2007, is a foregone conclusion, and that what we say, or the way we vote, has no meaning.

    • Because Wells Fargo is an impaired class and thus has a vote which it will cast as a yes please give me a release, there is a legal basis on which the Debtors can cram down a Plan here even if Class 8 votes no. Mr. Cooley & Co. will cry crockodile tears over this but will not really fight it because if the case is converted to Chapter 7 they don’t get paid. Their only loyalty is to themselves, as if they don’t get paid on a case this size they get fired by their own law firm.
      Now, once the Class 8 Noteholders vote no they are saying two things to the judge:
      1. We don’t want Wells Fargo to get a release. We want to sue Wells Fargo for making REL liable to MF 08 for $66 million dollars. Meaning we want Wells Fargo to pay MF 08, not us.
      2. We don’t want the Ng cronies to keep the money they stole after the phony 2007 exchange transaction allowed them to loot $120 million from REL.
      The judge has the ultimate call over whether to approve a Plan or put the case into Chapter 7. If Class 8 votes to approve the Plan no doubt it will be approved. If Class 8 votes no, then there is a reasonable chance she honors their wishes. That is why Cooley is working the spin here so hard. He will lose his job if he loses your vote. So vote no.

  6. Collette is correct – everything has been executed “backwards” in this mess from the minute Ng shut down the original website and whined about his father losing face.

    • Ditto that…poor fellow losing face. It seems he has not trouble showing it at Castlewood Country Club and yucking it up with a committee member no less.

  7. FOR IMMEDIATE RELEASE: June 08, 2012
    (#068)

    NEWS RELEASE

    INSURANCE COMMISSIONER DAVE JONES ANNOUNCES ARREST OF

    SOUTHERN CA AGENTS IN MILLION DOLLAR PONZI SCHEME

    Omega Investment Group Owners Preyed Upon Latinos, Senior Citizens

    Insurance Commissioner Dave Jones today announced that Edwin Salazar, 34, of Downey, and Michael Zuniga, 41, of Fullerton have each been arrested on 57 felony counts for defrauding Latino consumers, many of them senior citizens, in a $1.3 million Ponzi scheme. Bail was originally set at $1.3 million each, but has since been reduced to $100,000 for Salazar and $50,000 for Zuniga.

    “These agents allegedly conspired to rip-off trusting members of their own community,” said Commissioner Jones. “Preying on senior citizens for financial gain is deplorable and it will not go unpunished.”

    “The defendants defrauded investors with promises of guaranteed returns and even convinced some victims to refinance their own homes in order to participate in the scheme,” said Attorney General Harris. “What victims thought was a resourceful real estate investment only brought them losses and heartbreak.”

    According to a joint California Department of Insurance (CDI) and California Department of Justice (DOJ) investigation, Zuniga, a currently licensed insurance agent, and Salazar, a former insurance agent, allegedly owned and conducted business as the Omega Investment Group (Omega), an unlicensed entity located in Downey, California. The investigation revealed crimes of a Ponzi scheme aimed at Latinos, often targeting them right in their own homes. The 57 count complaint includes violations of the California Corporations Code for Securities Fraud, and violations of the Penal Code including Grand Theft, Elder Abuse, Burglary, and Conspiracy. There are 18 victims throughout Los Angeles County.

    Beginning in January 2007 and continuing through December 2008, the suspects issued over $1.3 million in fraudulent securities, in the form of one-year promissory notes, purportedly to invest in foreclosed real estate, to individuals in Southern California they befriended through their insurance business.

    The suspects entered the homes of the victims, and in some cases, assisted them in refinancing their homes in order to invest in their “risk-free” scheme. They fraudulently represented that Omega was a profitable business that for three years had bought and sold real estate that was in foreclosure. Omega claimed that these types of investments were so successful; they guaranteed a 15 percent secured interest annually to those who invested.

    The investigation revealed, however, that property and bank records had shown that Omega had not purchased or sold any property for three years prior to January 2007. A further review of Omega’s bank records revealed that it was never a profitable business and did not secure investments with property or any other assets as promised. Instead, the investigation revealed that Omega’s owners had diverted $663,000, from the $1.3 million collected for the purchase of real estate to an undisclosed entity known as Homes Brought Current, and then used these fraudulently diverted funds for their personal benefit. Additionally, in true Ponzi fashion, payments Omega made to newer investors were from prior investor funds, rather than business profit.

    Administrative action is currently pending against Zuniga’s insurance license. Salazar’s license expired in 2009.

    This case was investigated by CDI’s Los Angeles Investigation Division and DOJ’s Attorney General’s Office, Special Crimes Unit. The case is being prosecuted by the California Attorney General’s Office.

    # # #

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