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Each of the following categories are discussed in more detail below.
Category
Last Update
Lawsuit filed: Allegations of Securities Fraud
APRIL 7, 2002
The Criminal Forfeiture Proceedings in Houston
JANUARY 21, 2001
Criminal Charges Against Steve Roberts and Raymond Parr
APRIL 7, 2002
The Receiver's Pursuit of Hammersmith Trust
JANUARY 21, 2001

Gilliland's Failure to Pay and Contempt of Court

JANUARY 21, 2001
Criminal Proceedings Against David Gilliland and Others
DECEMBER 9, 2002
Pretrial Management and Fees
DECEMBER 9, 2001

Settlement Negotiations

APRIL 8, 2002

Miscellaneous Developments Regarding Various Defendants

OCTOBER 4, 2001

Claim Form Information

APRIL 12, 2001
Matters Relating to Cord/Winterhawk Receivership Estate
APRIL 7, 2002

Matters Relating to Howe Financial Receivership Estate

JULY 25 , 2003
Matters Relating to Funding Resources Receivership Estate
SEPTEMBER 9, 2003
Matters Relating to Hammersmith Receivership Estate
NOVEMBER 17 , 2004
APRIL 7, 2002
** For documents pertaining to other lawsuits relating to this matter, please click on the "Lawsuits" button to your right, click here, or on "Lawsuits" located on the main FRG page.
 

 




Lawsuit filed: Allegations of Securities Fraud
LAST UPDATE: APRIL 7, 2002


On November 13, 1998, the United States Securities and Exchange Commission "SEC" filed a lawsuit against Funding Resource Group a/k/a FRG Trust; Quentin Hix; Gene Coulter; Steven C. Robert; MVP Network, Inc. a/k/a MVP Network (Trust); FMCI Trust; Funders Marketing Company, Inc.; Raymond G. Parr; Williard Vearl Smith; Earl D. McKinney; Fortune Investments, Ltd.; Robert Cord a/k/a Robert F. Schoonover, Jr.; Winterhawk West Indies, Ltd.; IGW Trust; Carolyn Don Hicks; and Carl LaDane Weaver, in which they were accused of violating various securities laws by engaging in alleged high yield investment schemes which were, in actuality, nothing more than elaborate Ponzi schemes. The lawsuit also named Howe Financial Trust, Treds Financial Trust and Mary Ann Bauce as equity relief defendants which means they were believed to have received some of the funds which filtered through the scheme. The case was assigned Civil Action No. 3:98-CV-2689-X and is pending before the United States District Court for the Northern District of Texas, Dallas Division. The case was originally presided over by the Honorable Joe Kendall but was subsequently, on February 7, 2000, transferred to the Honorable Barbara M.G. Lynn. After the case was assigned to Judge Lynn, the case number was changed to 3:98-CV-2689-M and all pretrial matters were assigned to Magistrate Judge Jeff Kaplan for handling. All papers which are filed in the case are submitted through the United States District Clerk's Office, whose address is Earle Cambell Federal Building, 1100 Commerce, 14th Floor, Dallas, Texas 75242.

At the time the lawsuit was filed, the SEC presented evidence to the Court which supported the allegations of securities fraud. Based upon the evidence presented, the Court issued an Order Freezing Assets, Requiring an Accounting and Requiring Preservation of Documents and an Order Appointing Temporary Receiver. Initially, Howe Financial Trust opposed the continuation of the receivership and on November 30, 1998, the Court held a hearing to determine if the receivership should remain in place as to all defendants and equity relief defendants. Upon the conclusion of the hearing, the Court determined that the receivership should remain in place as to all defendants and equity relief defendants and it has been in place since that time. The Order reflecting the Court's ruling at the conclusion of the hearing is dated January 11, 1999. Also on November 30, 1998, defendant Carolyn Don Hicks entered into a Consent and Agreed Order.

In accordance with the Order Appointing Temporary Receiver, on December 18, 1998 the Receiver filed his Preliminary Report which provided relevant financial information known as of that time. Additional financial information regarding funds collected by and assets liquidated by the Receiver can be found in the Current Status portion of this web site.

The case was scheduled to go to trial on March 7, 2002. However, as the result of negotiations between the SEC and the parties named in the lawsuit, settlements were reached. Accordingly, on March 6, 2002, the Court issued Agreed Judgments of Permanent Injunction and Other Equitable Relief as to Raymond Parr, IGW Trust, Gene Coulter, MVP Network, Inc., Steve Roberts, Don Hicks, Quentin Hix, Vearl Smith, Howe Financial Trust, and Carl Weaver. The case was also dismissed with prejudice as to Funding Resource Group. Copies of all of these documents can also be viewed on the Documents portion of this web site.

The Criminal Forfeiture Proceedings in Houston
LAST UPDATE: APRIL 2, 2004

At the time the SEC filed the lawsuit, a criminal forfeiture proceeding was pending before the United States Federal District Court for the Southern District of Texas, Houston Division, Cause No.H-97-2625 styled United States of America vs. All Monies and Certificates of Deposit Located at Texas Coastal Bank, Pasadena, Texas on Deposit in Account Nos. 11957 (Winterhawk West Indies Ltd.), 219923 (Robert Cord), 20003568 (Winterhawk West Indies, Ltd.), 20003631 (Winterhawk West Indies, Ltd.), 20003680 (Winterhawk West Indies, Ltd.), 20003687 (Winterhawk West Indies, Ltd.), 20003687 (Winterhawk West Indies, Ltd.), 20003690 (Winterhawk West Indies, Ltd.), 012427 (Saber Industries, Ltd.), et al, pursuant to which the United States of America had seized various funds, real property, cars, boats and other property belonging to Robert Cord and his various entities. In connection with his role in running the scam, which is the subject of the SEC lawsuit, Robert Cord pled guilty to mail fraud and was then and is now serving his prison time in a federal penitentiary. Upon learning of the seizure of the assets and the pending criminal forfeiture proceedings, the Receiver sought to have them declared to be receivership assets and turned over to him for further handling by virtue of filing a Motion to Order Turnover or, in the Alternative, to Dismiss and/or Transfer Forfeiture Proceedings. On February 18, 1999, the Court presiding over the criminal forfeiture proceedings ordered the assets turned over to the Receiver for further disposition by entering its Order Granting Receiver's Motion to Order Turnover of Assets Held in the Custody of the United States. On March 5, 1999, the Court in Houston entered its Order Granting Receiver's Motion to Transfer Venue of Action and the case was transferred to Dallas and consolidated with the SEC proceedings.

Criminal Charges Against Steve Roberts and Raymond Parr
LAST UPDATE: NOVEMBER 1, 2002

On March 17, 2000, Steve Roberts was indicted by a Grand Jury in Houston in connection with his role in raising money from investors. The Indictment charges him with counts of mail fraud and aiding and abetting. After being indicted, Steve Roberts entered into a Plea Agreement pursuant to which he pled guilty to seven counts of mail fraud and was sentenced to twenty-seven months and three years probation. He is currently serving his sentence.

On February 11, 2002, Raymond Parr was indicted by a Grand Jury in Houston in connection with his role in raising money from investors. The indictment charges him with mail fraud. On May 16, 2002 Raymond Parr plead guilty to the charges of mail fraud and on October 18, 2002 was sentenced to serve 27 months in jail.

The Receiver's Pursuit of Hammersmith Trust
LAST UPDATE: JANUARY 21, 2001

After the receivership was made permanent by virtue of the hearing on November 30, 1998, the Receiver met with representatives of Howe Financial Trust and determined that it had "loaned" $2.745 million to Hammersmith Trust. Thereafter, the Receiver met with representatives of Hammersmith Trust to agree upon a repayment schedule. Despite reaching an agreement, Hammersmith Trust failed to pay the Receiver as agreed. Accordingly, on January 21, 1999, the Receiver filed a Declaration, in which he requested that the Court extend the receivership as to Hammersmith Trust which the Court did by Order dated January 22, 1999. On that same day, the United States Customs Service and the FBI served a search warrant on the offices of Hammersmith Trust located in Destin, Florida and seized all books and records.

On February 9, 1999, the Court issued an Order Allowing Inspection and Copying of Records, requiring that the United States Customs allow the Receiver access to all seized documents, electronic media and related materials. Those materials total in excess of 50,000 pages. Subsequent to the seizure of the books and records, a Grand Jury was impaneled in Pensacola, Florida to investigate the conduct of Hammersmith Trust and related companies and individuals. On September 15, 1999, the Court in Pensacola entered an Order allowing the Receiver access to voluminous bank records and other materials subpoenaed by the Grand Jury. Since the entry of the foregoing Orders, the Receiver and his accountants spent a great deal of their time reviewing and spread-sheeting the financial records.

After the Receiver's preliminary review of the books and records of Hammersmith Trust, it was his opinion that the "investment programs" being operated by Hammersmith Trust and related companies and individuals were fraudulent. Accordingly, on March 11, 1999 the Receiver filed a Declaration with the Court and requested that the receivership be extended as to those entities and individuals. By Order dated March 11, 1999 the Court extended the receivership and scheduled a hearing on the issue for March 22, 1999. Thereafter, a number of parties filed papers with the Court contesting the receivership as to them. However, at the time of the scheduled hearing, the parties announced to the Court that an agreement regarding a specific schedule of repayment of the monies owed by Hammersmith Trust to Howe Financial Trust had been reached which the parties wanted to incorporate into a court order. Accordingly, on March 26, 1999, the Court entered an Agreed Order Modifying and Abating Orders of January 21, 1999 and March 11, 1999 Freezing Assets and Appointing Temporary Receiver. Despite the clear provisions of the Order, however, Hammersmith Trust once again failed to pay as ordered.

On April 21, 1999, the Receiver filed a Motion for Show Cause Order asking the Court to hold Hammersmith Trust and David Gilliland in contempt for their failure to pay as ordered. On April 22, 1999, the Court entered its Order to Appear and Show Cause and scheduled a hearing in the matter. The hearing was ultimately held on May 17, 1999 and thereafter, on May 25, 2000, the Court issued its Order Finding B. David Gilliland in Contempt of Court. Pursuant to the Order, Mr. Gilliland was given until July 2, 1999 to purge his contempt by paying the money previously ordered to be paid.

Gilliland's Failure to Pay and Contempt of Court
LAST UPDATE: JANUARY 21, 2001

Once again, however, Mr. Gilliland failed to pay as ordered and, instead, on July 2, 1999 he caused Hammersmith Trust to file Chapter 11 bankruptcy in Tampa, Florida. On July 22, 1999 the Court held a lengthy hearing to determine whether it had become impossible for Mr. Gilliland to purge himself of contempt and whether he should be incarcerated. At the conclusion of the hearing the Court found that Mr. Gilliland had created, of his own will, the impossibility which he claimed excused his contempt and had him put in jail, pursuant to an Order entered on July 26, 1999. On July 23, 1999 Mr. Gilliland filed an Emergency Motion to Stay the Court's decision to send him to jail. Several days later, the Court entered an Order Granting Stay and released Mr. Gilliland from jail pending his appeal of the Order to the Fifth Circuit Court of Appeals. On September 6, 2000, the Fifth Circuit Court of Appeals entered its Opinion regarding the matter and held that the court's decision to send Mr. Gilliland to jail could not be appealed. However, because Mr. Gilliland is now in jail for other reasons, as discussed below, the Receiver does not intend to further pursue the contempt issues against Mr. Gilliland.

In addition, on July 23, 1999 the Court entered its Order Freezing Assets, Reinstating Appointment of Receiver and Authorizing Expedited Discovery pursuant to which Hammersmith Trust, LLC [Tennessee and West Indies], Hammersmith Trust, Ltd., Bridgeport Alliance LLC, Landfair Custodial Services, Inc., Microfund LLC, American Pacific Bank and Trust, Inc., Eurofund Investments, Inc., B. David Gilliland and Melody Rose were put into receivership (the July 23, 1999 Order was extended by an Order dated August 20, 1999 and September 24, 1999). Thereafter, the Receiver successfully sought to have the Bankruptcy Court in Tampa, Florida dismiss the Chapter 11 proceedings of Hammersmith Trust. An Order in that regard was issued on July 29, 1999.

Pursuant to the terms of the July 23, 1999 Order regarding the receiverships of the Hammersmith Trust related entities, the Receiver filed his Preliminary Report as to the Hammersmith Trust related entities on December 9, 1999. Additional financial information regarding these entities is available in the Current Status portion of this web site.

Criminal Proceedings Against David Gilliland and Others
LAST UPDATE: APRIL 2, 2004

On June 21, 2000, a Federal Grand Jury in Pensacola issued an Indictment against David Gilliland, Bill West, Ken Cobb, David Bishara, Melody Rose, David Johnson, Jerrold Gunn, Bill Dohan, Mark Talley, Phillip Nesmith and Jeffrey Matz. After being indicted, David Gilliland pled guilty to conspiracy to commit wire fraud, securities fraud and money laundering and is currently being held in jail while he awaits his sentencing. Click here to view his Plea and Cooperation Agreement. Trial of the other individuals named in the indictment began on March 5, 2001 and ended on April 13, 2001. At the conclusion of the trial, Bill West, Ken Cobb, David Bishara, Melody Rose, Phillip Nesmith and Jeffrey Matz were each convicted of the charges against them. Mark Talley and David Johnson were each acquitted. Jerrold Gunn and Bill Dohan have not yet been tried and are awaiting a trial on their extradition from Canada and France.

Each of the individuals who were convicted received the following sentences:

David Gilliland
75 months
Bill West
136 months
David Bishara
84 months
Ken Cobb
78 months
Melody Rose
97 months
Jeffrey Matz
97 months
Phillip Nesmith 63 months

In addition, each of the individuals were ordered to make restitution and turnover various assets to the Receiver for liquidation. Copies of the judgments entered against them can be viewed by clicking here.

On October 17, 2001, a Federal Grand Jury in Pensacola issued an Indictment against Thomas McCrimmon, William Leon Hurst and Fred Gilliland for their roles in soliciting money from investors. Trial of Thomas McCrimmon and William Leon Hurst began on May 20, 2002, and concluded on June 6, 2002, resulting in a hung jury. Thereafter, Mr. Hurst was acquitted of the charges against him and Thomas McCrimmon was re-tried beginning on July 29, 2002 and was convicted of the charges against him. On November 20, 2002 he was sentenced to 97 months in prison. Fred Gilliland has not yet been tried and is currently awaiting a trial in Canada on extradition to the United States.

Pretrial Management and Fees
LAST UPDATE: DECEMBER 9, 2001

As generally referenced above, after this case was transferred to Judge Lynn for further handling, she entered a Standing Order of Reference pursuant to which the case was given to the Magistrate Judge for pretrial management. Judge Kaplan then issued a Standing Order on All Dispositive Motions and an Order requiring the Receiver to file a budget for the case and an Order Requiring Attorney Conference and Joint Status Report. On July 26, 2000, the SEC filed the Joint Status Report and Proposed Scheduling Order. On July 31, 2000, the Court issued an Order extending the time for the Receiver to file the case budget. The Court also entered an Initial Scheduling Order. On August 4, 2000, the Receiver filed his Proposed Litigation Budget and on August 24, 2000, the Court held a hearing with respect to the Budget and issued an Order approving it with modifications. Pursuant to the Order, on September 5, 2000, the Receiver filed his Amended Tenth Interim Application regarding Attorneys fees and Third Interim Application regarding Accounting Fees. On September 7, 2000, the Court issued an Order Setting Hearing on these two fee applications. The hearing was set for October 6, 2000, at 10:00 a.m. and any objections had to be filed with the Court by September 25, 2000. No objections were filed. After holding a hearing on the fee applications, on October 6, 2000, the Court issued its Order approving the fee applications.

On December 4, 2000 the Receiver filed his Eleventh Interim Application for attorneys fees and his Fifth Interim Application regarding accounting fees. On December 5, 2000, the Court issued an Order Setting Hearing on these two fee applications. The hearing was set for January 5, 2001 at 9:00 a.m. and any objections had to be filed with the Court by December 27, 2000. No objections were filed. After holding a hearing on the fee applications on January 5, 2001, the Court issued its Order approving the fee applications.

On March 5, 2001, the Receiver filed his Twelfth Interim Application for attorneys fees. By Order dated March 7, 2001, the Court temporarily denied the Application as to the Receiver until such time as procedures for making distributions to investors are in place. However, as to fees sought in the application for out-of-state counsel, the Court issued an Order setting the matter for hearing on April 12, 2001. On April 13, 2001, the Court issued its Order approving the requested fees. On March 15, 2001, the Receiver filed his Unopposed Motion to Allow Reimbursement of Expenses. On March 15, 2001, the Court issued an Order setting the matter for hearing on April 12, 2001. On April 13, 2001, the Court issued its Order approving reimbursement of the requested expenses.

On June 4, 2001, the Receiver filed his second Motion to Allow Reimbursement of Expenses. On June 11, 2001, the Court issued an Order setting the matter for hearing on July 13, 2001. On July 16, 2001, the Court issued an Order approving reimbursement of the requested expenses. On September 5, 2001, the Receiver filed his third Motion to Allow Reimbursement of Expenses. On September 6, 2001, the Court issued an Order setting the matter for hearing on October 18, 2001. On October 18, 2001, the Court issued an Order approving reimbursement of the requested expenses.

Settlement Negotiations
LAST UPDATE: APRIL 2, 2004

Since his appointment, the Receiver has pursued settlement discussions with almost every person named as a defendant or equity relief defendant in this case. On April 19, 2000, the Receiver filed his Unopposed Motion to Approve Compromise and Settlement Agreement as to Bridgeport Alliance, LLC, Economic Development Corporation and Bill West, which the Court approved by virtue of an Order entered on April 27, 2000.

The Receiver has also reached a settlement of claims against Sands Point Trust and its trustee, Ray Hanson. On November 15, 2000, the Receiver filed his Unopposed Motion to Approve Compromise and Settlement Agreement with Sands Point Trust. On November 20, 2000, the Court issued an Order approving the settlement.

Settlements reached with people sued by the Receiver are discussed in the lawsuit section of this web site.

Miscellaneous Developments Regarding Various Defendants
LAST UPDATE: OCTOBER 4, 2001

In an effort to move the case toward conclusion, the SEC filed a motion for entry of default judgment against Robert Cord and Winterhawk West Indies, Ltd. On January 9, 2001, Judge Kaplan issued his Findings and Recommendations. On May 16, 2001, Judge Lynn entered a Final Default Judgment against Robert Cord, Winterhawk, West Indies, Funders Marketing Company, Inc., FMCI Trust, Earl McKinney and Fortune Investment, Ltd., and Treds Financial Trust. In addition, on April 23, 2001, the Court signed an Agreed Final Judgment against Mary Ann Bruce, which she satisfied by paying the Receiver $77,376.88.

In December 2000, the SEC undertook efforts to have wages and insurance commissions earned by Raymond Parr turned over to the Receiver. In response, on January 3, 2001, Parr filed an Emergency Motion to Restrain the SEC. Judge Kaplan then issued an Order setting the matter for hearing on January 26, 2001. After the hearing, Judge Kaplan issued his Findings and Recommendations. Thereafter, Judge Lynn adopted the Findings.

On March 16, 2001, the Receiver filed his Emergency Motion to Compel Turnover of Receivership Assets by Raymond Parr. Thereafter, an agreement was reached, which is set forth in an Agreed Order entered by the Court on April 11, 2001. Mr. Parr then sold his house and paid the Receiver the net proceeds in the amount of $14,555.01. Mr. Parr has also delivered a Ford Expedition, a Toyota 4Runner, various items of jewelry and various guns. More information regarding these items can be found in the Assets for Sale portion of this web site. On June 1, 2001, the Receiver filed his Unopposed Motion to Sell Personalty of Raymond Parr. On July 13, 2001, the Court issued an Order allowing the sale of the property. Since that time, the Receiver has sold the guns for $200.00 and the jewelry for $2,405.00.

On May 17, 2001, the Receiver filed his Unopposed Motion to Sell Vehicle (the Lincoln Navigator). On May 17, 2001, the Court issued its Order setting the matter for hearing on June 22, 2001. After the hearing, the Court issued its Order allowing sale of the vehicle for $18,000.00. On September 7, 2001, the Receiver filed his Unopposed Motion to Sell Vehicle (the Toyota 4-Runner). On September 7, 2001, the Court issued its Order setting the matter for hearing on September 21, 2001. On September 1, 2001, the Court issued its Order allowing sale of the vehicle for $12,000.00.

Claim Form Information
LAST UPDATE: APRIL 12, 2001

On January 12, 2001, the Receiver filed his Motion to Establish Claim Procedures and to Approve Claim Form. On January 17, 2001, the Court issued its Order approving the claim form. On January 26, 2001, the Receiver began sending the Claim Form and a letter to all known investors. If you did not receive the claim form and letter, please contact Steve Tomasky immediately at stomasky@qsclpc.com.

The deadline to return the completed Claim Form to the Receiver was March 31, 2001. As the completed Claim Forms have been returned, the Receiver’s staff has been reviewing each claim to determine whether it should be allowed or disallowed and in what amount. If the Receiver has a problem with your claim you will be contacted. There is no need for you to contact the Receiver at this time.

In an effort to treat investors as fairly as possible while taking into account who they invested with and what happened to their funds versus amounts collected by the Receiver which are traceable to particular investor groups, the Court, at the request of the Receiver, issued an Order which established four different and separate receivership estates for the purpose of determining claims and making distributions. They are as follows:

1. Cord/Winterhawk. This estate is compromised of the assets and recoveries traceable to Robert Cord a/k/a/ Robert F. Schoonover, Jr. and Winterhawk West Indies, Ltd.

2. Funding Resource Group. This estate is compromised of the assets and recoveries traceable to Funding Resource Group, FRG Trust, FMCI Trust, Funders Marketing Company, Inc., MVP Network, Inc., MVP Network Trust, Fortune Investments, Ltd., Treds Financial Trust, Steve Roberts, Raymond Parr, Quentin Hix, Gene Coulter, Vearl Smith, Earl McKinney, Don Hicks, Carl Weaver and Mary Ann Bauce.

3. Howe Financial Trust. This estate is compromised of the assets and recoveries traceable to Howe Financial Trust.

4. Hammersmith Trust. This estate is comprised of the assets and recoveries traceable to Hammersmith Trust, L.L.C. (both Tennessee and Nevis, West Indies) Hammersmith Trust, Ltd., Bridgeport Alliance, L.L.C., Landfair Custodial Services, Inc., Microfund, L.L.C., American Pacific Bank & Trust, Inc., Eurofund Investments, Inc., B. David Gilliland and Melody Rose.

Matters Relating to Cord/Winterhawk Receivership Estate
LAST UPDATE: APRIL 7, 2002

On March 9, 2001, the Receiver filed his Unopposed Motion to Establish Procedures Regarding Cord/Winterhawk Claims. On March 12, 2001, the Court issued its Order regarding the Motion which established various important deadlines. By April 10, 2001, the Receiver had to and did file a Statement of Allowed Claims and Objections to Claims as to this particular receivership estate. Responses to the Receiver's Objections had to be filed by April 24, 2001 and the Court conducted a hearing on all unresolved claims on April 27, 2001. On May 9, 2001, Judge Kaplan issued his Findings and Recommendations regarding the claims which should be allowed and disallowed against the receivership estate. On June 13, 2001, Judge Lynn issued her Order Accepting the Findings and Recommendations.

On March 9, 2001, the Receiver filed his Unopposed Motion to Allocate Fees Between Receivership Estates and Pay Same. On March 12, 2001, the Court issued an Order setting the matter for hearing on April 12, 2001. On April 13, 2001, the Court issued its Order granting the Motion.

On July 3, 2001, the Receiver filed his Final Report and Proposed Distribution Plan as to the Cord/Winterhawk Receivership Estate which sets forth all financial information about the estate and which proposes a cash distribution to each person with an allowed claim equal to 25.64% of their claim. On July 5, 2001, the Court issued an Order setting the matter for hearing on August 17, 2001. After the hearing, Judge Kaplan issued his Findings and Recommendations in which he recommended approval of the Report. On September 7, 2001, Judge Lynn issued her Order accepting Judge Kaplan's Findings and Recommendation. On September 14, 2001, the Receiver mailed final distribution checks to each holder of an allowed claim against the Cord/Winterhawk Receivership Estate. Each person received a check equal to 25.7% of their claim.

On December 18, 200, the Receiver filed a Motion to Approve Handling of Uncashed Checks. On December 19, 2001 the Court issued an Order Setting Hearing for 9:00 a.m. on January 25, 2002. On January 25, 2002, the Court issued its Order regarding reissuance of the checks.

On January 10, 2002, the Receiver filed a Motion to Close Case and for Discharge. On January 10, 2002, the Court issued an Order Setting Hearing pursuant to which the matter was heard on February 15, 2002. On February 15, 2002, Judge Kaplan issued his Findings and Recommendation that the case be closed. On March 19, 2002, Judge Lynn issued an Order Closing Case and Discharging Receiver as to the Cord/Winterhawk receivership estate only.

Matters Relating to Howe Financial Receivership Estate
LAST UPDATE: JULY 25, 2003


On February 9, 2001, the Receiver filed his Motion to Compel Reconveyance of Receivership Property, Payment of Rent and Vacation of Property by Strong Heart, Inc. The Motion related to a piece of property under the control of Rodger Griggs. On February 12, 2001, the Court issued a Show Cause Order as to the Motion and ordered Rodger Griggs to appear in Dallas. Thereafter, an agreement was reached between the parties which is reflected in an Agreed Order and the Receiver's Unopposed Motion to Approve Compromise and Settlement Agreement with Strong Heart, Inc. The settlement was approved by virtue of an Order dated March 5, 2001.

On March 27, 2001, the Receiver filed an Unopposed Motion to Sell Real Property at Private Sale and to Appoint Appraisers regarding a house located at 30910 Creekwood Trail in Osceola, Indiana in which Howe Financial Trust had an interest. On March 28, 2001, the Court issued an Order setting the matter for hearing on April 12, 2001. After the hearing, the Court issued an Order approving the Motion. On April 10, 2001, the Receiver filed his Unopposed Motion to Sell Real Property Free and Clear of all Liens, Claims and Encumbrances pursuant to which the Receiver sought approval to sell the Creekwood Property for $112,500.00. On April 12, 2001, the Court issued an Order setting the matter for hearing on April 27, 2001. On April 27, 2001, the Court issued its Order approving the sale. Thereafter, the sale of the house closed and the Receiver was paid net proceeds of $55,740.56.

On April 11, 2001, the Receiver filed an Unopposed Motion to Sell Real Property and to Appoint Appraisers regarding a home located at 58100 Pottawatomie, Osceola, Indiana, owned by Howe Financial Trust. On April 12, 2001, the Court issued an Order setting the matter for hearing on April 27, 2001. On April 27, 2001, the Court issued its Order approving a private sale of the property. On February 8, 2002, the Receiver filed a Motion to Sell the Pottawatomie property for $300,000.00. On March 5, 2002, the Court issued an Order Setting Hearing at 8:30 a.m. on March 22, 2002. On March 22, 2002, the Court issued its Order approving the sale.

On March 15, 2001, the Receiver filed his Unopposed Motion to Sell Vehicle pursuant to which the Receiver sought permission to sell a 1999 Chrysler LHS owned by Howe Financial Trust for $5,000.00. On March 15, 2001, the Court issued an Order setting the matter for hearing on April 12, 2001. On April 13, 2001 the Court issued its Order approving the sale. On March 26, 2002, the Receiver filed an Amended Motion to Sell Vehicle which, by Order dated March 27, 2002, the Court set for hearing at 10:00 a.m. on April 19, 2002. On April 19, 2002, the Court entered an Order approving the Amended Motion. On May 17, 2001, the Receiver filed an Unopposed Motion to Sell Real Property at Private Sale and to Appoint Appraisers regarding a house located at 1721-25 South Main Street Elkhart, Indiana owned by Howe Financial Trust. On May 17, 2001, the Court issued an Order setting the matter for hearing on June 22, 2001. After the hearing, the Court issued an Order approving the motion. On May 15, 2002, the Receiver filed his Unopposed Motion to Sell the Main Street Property free and clear of all claims. On May 20, 2002, the Court issued its Order Setting Hearing at 9:00 a.m. on June 21, 2002. Prior to the hearing, Jimmy and Abigail Zayas filed an objection to the sale so the Court issued an Order Resetting Hearing at 9:00 a.m. on July 19, 2002. Since that time the Receiver and the Zayas have engaged in discussions pursuant to which the property will be conveyed to them. The appropriate papers are being prepared. On August 30, 2002 the Court issued an Order setting the matter for hearing at 8:30 a.m. on September 20, 2002. On September 20, 2002 the Court issued an Order approving the Motion. On November 2002, a closing was held pursuant to which the property was conveyed to the Zayas.

On May 24, 2001, the Receiver filed his Unopposed Motion to Establish Procedures Regarding Howe Financial Trust Claims. On May 29, 2001, the Court issued its Order, which established various important deadlines. A hearing was held on July 13, 2001, regarding the allowance of claims against the Howe Financial Trust receivership estate. After the hearing, Judge Kaplan issued Findings and a Recommendation regarding the claims. On July 25, 2001, Judge Lynn issued an Order approving the Findings.

On August 15, 2001, the Receiver filed his Interim Report and Proposed Interim Distribution Plan. The Receiver also filed a Motion Regarding the Treatment of the claim of Nancy Sims. Both matters were set for hearing on September 21, 2001, by virtue of an Order [regarding the Receiver's Final Report and Proposed Distribution Plan] and an Order [regarding the Treatment of Sim's Claims] dated August 20, 2001. After the hearing, Judge Kaplan issued an Order approving the Receiver's proposed treatment of the Nancy Sims claim. Judge Kaplan also issued Findings and Recommendations approving the Receiver's proposed Interim Distribution Plan. On October 19, 2001, Judge Lynn issued an Order Accepting the Findings and Recommendations. Thereafter, the Receiver sent interim distribution checks to each holder of an allowed claim. Each person received a check equal to 32.9% of their claim.

On November 14, 2002 the Receiver filed his Final Report and Proposed Final Distribution Plan as to the Howe Financial Trust Receivership Estate. On November 15, 2002 Judge Kaplan issued an Order Setting Hearing pursuant to which the motion was set for hearing at 9:00 a.m. on December 20, 2002. On December 20, 2002 Judge Kaplan issued his Findings and Recommendation as to the Final Report.

On January 15, 2003 Judge Lynn issued an Order Accepting Findings and Recommendation of the United States Magistrate Judge. On January 17, 2003 the Receiver mailed a final distribution check to each holder of an allowed claim in an amount equal to 20.75% of their claim.

On March 20, 2003 the Receiver filed his Motion to Close Case and for Discharge as to the Howe Financial Receivership Estate. On March 21, 2003 Judge Kaplan issued an Order Setting Hearing pursuant to which the matter was set for hearing at 9:00 a.m. on April 11, 2003. On April 11, 2003 Judge Kaplan issued his Findings and Recommendation pursuant to which he recommended that that Howe Financial Trust Receivership Estate should be closed. On April 29, 2003, Judge Lynn issued an Order approving the recommendation, closing the case and discharging the Receiver as to the Howe Financial receivership estate only.

Matters Relating to Funding Resource Group Receivership Estate
LAST UPDATE: SEPTEMBER 9, 2003

On December 7, 2001, the Receiver filed his Unopposed Motion to Establish Claim Procedures for the Funding Resources Receivership Estate. On December 10, 2001, Judge Kaplan issued an Order Setting Hearing, which set a hearing to be held at 9:00 a.m. on January 25, 2002.

On December 21, 2001, the Receiver filed his Statement of Claims with respect to the Funding Resources Receivership Estate, which lists by name and amount each claim allowed and agreed to by the Receiver. On December 21, 2001, the Receiver also filed his Objections to Claims as to the Funding Resources Receivership Estate. After the hearing held on January 25, 2002, Judge Kaplan issued his Findings and Recommendation regarding the claims. On February 5, 2002, the Receiver filed his Limited Objection to the Findings and Recommendation. On February 15, 2002, Judge Lynn issued an Order Approving and Modifying the Findings and Recommendation.

On October 1, 2002, the Receiver filed a Motion to Allow Late Claim as to a claim received from Cindy Meier. On October 2, 2002, the Court issued an Order Setting Hearing on the matter at 9:00 a.m. On October 25, 2002 Judge Kaplan issued Findings and Recommendation pursuant to which he recommended that the claim should be allowed. On November 25, 2002 Judge Lynn issued an Order approving the Findings and Recommendation.

On December 28, 2001, the Receiver filed his Motion to Approve Compromise and Settlement with Hillcrest Baptist Church. On January 28, 2002, the Court issued its Order Approving the Compromise and Settlement pursuant to which the Receiver was paid $30,000.00.

On March 21, 2002, the Receiver filed a Motion to Determine Responsibility for Filing Tax Returns. On March 22, 2002, the Court issued an Order which set the matter for hearing at 10:00 a.m. on April 19, 2002. On April 19, 2002, the Court issued its Order regarding the filing of tax returns. On March 21, 2002, the Receiver filed his Interim Report and Proposed Distribution Plan. On March 22, 2002, the Court issued an Order setting the matter for hearing at 10:00 a.m. on April 19, 2002. On April 19, 2002, Judge Kaplan issued Findings and Recommendation regarding the Interim Report. On June 6, 2002, Judge Lynn issued an Order Accepting Findings and Recommendations of the United States Magistrate Judge. On June 11, 2002, the Receiver mailed an interim distribution check to each holder of an allowed claim in an amount equal to 12.29% of their claim.

On November 26, 2002 the Receiver filed his Final Report and Proposed Distribution Plan. On December 3, 2002 Judge Kaplan issued an Order Setting Hearing pursuant to which the motion was set for hearing at 9:00 a.m. on December 20, 2002. On December 20, 2002 Judge Kaplan issued his Findings and Recommendations as to the Final Report.

On January 15, 2003 Judge Lynn issued an Order Accepting Findings and Recommendation of the United States Magistrate Judge. On January 17, 2003 the Receiver mailed a final distribution check to each holder of an allowed claim in an amount equal to 1.86% of their claim.

On July 16, 2003 the Receiver filed a Motion to Pay Unclaimed Funds Into the Registry of the Court. On July 17, 2003 Judge Kaplan issued an Order Setting Hearing for September 5, 2003 at 9:00 a.m. On September 5, 2003 Judge Kaplan issued an Order approving the Motion and, thereafter, the Receiver paid $780.06 to the Clerk of the Court. On July 16, 2003 the Receiver also filed a Motion to Close Case and for Discharge as to Funding Resources Receivership Estate. On July 17, 2003 Judge Kaplan issued an Order Setting Hearing for September 5, 2003 at 9:00 a.m. On September 5, 2003 Judge Kaplan issued Findings and Recommendation that the Motion be approved. Any Objections to the Findings must be filed by September 19, 2003.

Matters Relating to the Hammersmith Trust Receivership Estate
LAST UPDATE: NOVEMBER 17, 2004

On March 12, 2004 the Receiver filed his Motion to Determine Responsibility for Filing Tax Returns (Hammersmith Trust Receivership Estate). On March 15, 2004 the Court issued an Order Setting Hearing for 9:00 a.m. on April 23, 2004. On April 23, 2004 the Court issued an Order granting the Motion.

On April 15, 2004 the Receiver filed his Statement of Allowed Claims Filed Against the Hammersmith Trust Receivership Estate and his Objections to Claims. On April 23, 2004 the Court issued an Order Setting Hearing for 9:00 a.m. on May 27, 2004. On May 27, 2004 Judge Kaplan issued his Findings and Recommendation regarding the objections to claims. On August 20, 2004 Judge Lynn issued an Order Accepting as Modified the Findings and Recommendations.

On August 2, 2004 the Receiver filed a Motion to Pay Accountants for Tax Return Preparation. On August 11, 2004, the Court issued an Order Setting Hearing. On August 11, 2004 the Court issued an Order granting the Motion.

On September 22, 2004 the Receiver filed his Final Report and Proposed Final Distribution Plan as well as his Final Fee Application. On September 27, 2004 the Court issued an Order Setting Hearing pursuant to which both matters were set for hearing at 9:00 a.m. on November 12, 2004. On November 12, 2004 Magistrate Judge Kaplan issued his Findings and Recommendation pursuant to which he recommended that both matters be approved. On December 20, 2004 Judge Lynn issued an Order Accepting the Findings and Recommendations of the United States Magistrate Judge. Thereafter, the Receiver mailed checks to each holder of an allowed claim consistent with the terms of the Order.

On March 3, 2005 the Court issued an Order Resetting Time of Hearing pursuant to which issues related to closure of the Estate were heard on March 16, 2005. On March 17, 2005, Judge Lynn issed an Order Closing Case and Discharging Receiver as to the Hammersmith Trust Receivership Estate.