With the assistance of U.S. Magistrate Judge Paul Abrams in the United States District Court for the Central District of California and after long and protracted negotiations, I reached a settlement with StormPay. You can find the Notice of Motion and Motion for an Order Approving the Settlement Agreement with StormPay, the settlement agreement and the supporting pleadings at the Receiver’s we b site: www.tlennonfor12dailypro.com.
Under the settlement, the receivership estate will receive $11,750,000 and StormPay’s claims against 12DP in excess of $16 million will b e waived b y StormPay. I believe that approval of the Settlement Agreement is in the b est interest of the estate and its creditors b ecause it maximizes the return to the receivership estate with minimal expense and ensures a much quicker distri b ution to investors. Litigation involves certain risks and would necessarily involve considera b le delay and significant expenses. If the claims were litigated, distributions to investors could b e delayed b y over a year and the costs to litigate could exceed $750,000.
The funds obtained from this settlement, plus the funds the estate currently holds in the approximate amount of $5 million, along with interest earned on these monies and other recoveries, will b e utilized to pay the fees and expenses of the receivership and the remaining funds will become the b sis for the recommended distribution to investors. The pro-rata distribution percentage will not b e known until total claims and net cash available for distribution are determined. The Receiver and his professionals are currently working on both of these issues.