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| Forms and Instructions - Recent Status - Chapter 11 Trustee Reports - Creditor's Comm. Updates - Contact Information |
July 27, 2005 Press Release POST BANKRUPTCY CONFIRMATION UPDATE PREPARED BY R. W. CUTHILL, JR., PRESIDENT JUNE 2004 TO JUNE 2005 This update will cover the major activities of Evergreen since it emerged from bankruptcy. It will not cover all activities and some of the activities will be summarized. Evergreen was reorganized under the US Bankruptcy code and emerged from Bankruptcy in June 2004. Its stock is now held in trust for the creditors of Evergreen by The Steering Committee, consisting of five creditors. Mr. Cuthill was appointed the sole director and president of Evergreen after the reorganization and he continues in that position. He provides periodic reports to The Steering Committee on his activities. In accordance with the Plan of Reorganization, Evergreen has continued the litigation it started when it was in bankruptcy. The following table is a summary of the status of this litigation:
The suits pending consist of three broker defendants and 19 other defendants. The other suits are against the two securities custodians and their affiliates, one of the investment advisors and its principals, one of the trustees and its principals and the initial shareholder of Evergreen. Evergreen's attorneys have estimated the litigation will be completed in 2005 or the first half of 2006. During 2004 the second criminal trial for Anthony Huggins and Jon M. Knight was held in New York. Mr. Huggins and Mr. Knight were the owners of International Portfolio Analytics, Ltd., which was an investment advisor for Evergreen. The jury found Mr. Knight guilty on all counts, while it could not reach a verdict on Mr. Huggins. Mr. Knight filed an appeal. Subsequently, Mr. Knight pled guilty to attempted grand larceny and Mr. Huggins pled guilty to possession of stolen property. Neither was sentenced to jail time, but is serving probation and was fined. They were not required to pay restitution to the Evergreen investors. Evergreen has two pending suits against Mr. Knight and Mr. Huggins and their companies, which are included in "Other Suits" above. Robert W. Boyd and Martin W. Boelens, Jr. previously pled guilty to various federal crimes for their part in Evergreen. Mr. Boelens additionally pled guilty to crimes in New York related to the Zylka theft of $27.7 million from Evergreen. Their previous sentencing dates were postponed by requests from the NY District Attorney and Mr. Cuthill so they could testify in various trials. Mr. Boyd's sentencing date is now July 14, 2005 and Mr. Boelens sentencing date is now July 28, 2005. When Evergreen emerged from bankruptcy it had recovered $6.4 million from litigation, sale of assets and other sources. Since that time it has recovered an additional amount $19.1 million, which makes a total recovery of $25.5 million. In addition, 11.625 million shares of Crystal Graphite Corporation have been recovered and are currently being held. Crystal Graphite Corporation is a mining company located in British Columbia, Canada. You can find more information about this company on the Internet at www.crystalgraphite.com. When Evergreen emerged from bankruptcy it had spent $1.9 million for legal and accounting fees, $ .4 million for expenses of the Creditors' Committee, $ .2 million for Mr. Cuthill's fees, and $ .3 million for other expenses. These total $2.8 million for expenditures prior to the end of the bankruptcy. Since emerging from bankruptcy Evergreen spent $16.9 million for distributions to creditors, $2.6 million on legal and accounting fees, $ .8 million for expenses of the Creditors'/Steering Committee, $ .3 million for Mr. Cuthill's salary and expenses and less then $ .1 million for other expenses. These total $20.6 million for expenditures after the end of the bankruptcy. Evergreen has retained $2.1 million to pay future costs of recovery. Most of these future costs will be for legal and accounting fees, Steering Committee expenses and Mr. Cuthill's salary and expenses. Mr. Cuthill projected he would recovery at least $30 million in the early stages of the case. He also said there could be additional recoveries based upon the success of the litigation. At this time Evergreen has recovered close to the $30 million, depending on how the stock in Crystal Graphite Corporation is valued. The pending litigation will be the source for future recovery of funds. Mr. Cuthill and the several lawyers working on this complex litigation cannot predict the recovery from these cases. Future distributions to creditors will depend on the future recovery of funds. There are $185 million of approved claims in the case, which means that each creditor will receive about one-half of one percent of their approved claim amount for each $1 million distributed. Mr. Cuthill has stated he will only hold the necessary reserves and distribute the rest as it comes in. Minimum distributions will be made at $3.7 million in total, which will represent a two percent distribution to each creditor. This minimum distribution level has been set to save the administrative cost of several smaller distributions within a short time period. Some of Evergreen's creditors or their trustee did not obtain an approved Proof of Claim. If you are a creditor and do not have an approved Proof of Claim, you should file a Proof of Claim with the US Bankruptcy Court, 135 W. Central Blvd., Orlando, FL 32801, USA. You can obtain a Proof of Claim form on the Internet at www.evergreencreditorscommittee.com. Please send a copy to Mr. Cuthill at Evergreen Security, Ltd., 341 N. Maitland Ave., Ste. 210, Maitland, FL 32751, USA. Some of Evergreen's creditors have an approved claim, but their checks were not cashed or returned by the post office due to incorrect addresses. If you have an approved claim and have not received two distribution checks for each approved claim you hold, you should contact Mr. Cuthill. For most matters you should contact Mr. Cuthill at 341 N. Maitland Ave., Ste. 210, Maitland, FL 32751, USA. His e-mail address is rcuthill@msn.com. For other contact information see Evergreen's web site on the Internet at www.evergreencreditorscommittee.com. |
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| Official Committee of Unsecured Creditors for Evergreen Security, Ltd. |