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| Forms and Instructions - Recent Status - Chapter 11 Trustee Reports - Creditor's Comm. Updates - Contact Information |
April 21, 2003 Trustee's Report EVERGREEN SECURITY, LTD CASE NO. 01-00533-6B1 TRUSTEE REPORT TO CREDITORS' COMMITTEE April 21, 2003 Ladies and Gentlemen: My last report to the Committee was January 13, 2003. This report will not repeat my prior reports, which can be found at www.evergreencreditorscommittee.com. Evergreen funds in excess of $5.4 million have been deposited to the bankruptcy accounts since my appointment through March 31, 2003. Five of the six managers of Evergreen have settled their suits for $580,000 in cash, three pieces of real estate and cooperation in other litigation. One of these settlements is still subject to Court approval. One piece of real estate was sold and closed for $700,000 last year. Two other pieces of real estate with a value of less then $50,000 are still to be sold. I have contacted a broker to market them. The last manager has responded to the suit and his trial should be held in 2003. 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. According to the liquidator's counsel, all that remains is Court approval in the Bahamas of the liquidator's settlement with Evergreen, which will give Evergreen all of the liquidation funds after claims of $700,000 and administration costs of an unknown amount. Two Court hearings were held in the Bahamas during the quarter, which I attended. The Court is requiring additional affidavits before approval. The liquidator is holding $4.7 million of funds, which is all of the assets of the bank. I received a judgment for $35 million against Intrados. Intrados is not responding to the US case so I am pursuing them in Costa Rica. There has been little progress in my suit against Atlantic Portfolio Analytics & Management, Inc. (APAM) suit for $8.5 million. I rejected their initial offer to settle for approximately $1.5 million. The NYDA has a criminal case against Mr. Huggins and Knight, the principals in APAM, who were arrested in August 2002. This trial should be heard in 2003 and the NYDA has requested my suit be stayed until their criminal trial has been completed. The Zylka suit includes twenty-nine defendants, which received part of the $27.7 million taken from Evergreen by William J. Zylka. I have settled with thirteen defendants, including the Zylka corporations, the wife and two daughters of William Zylka, and two non-Zylka-owned corporate defendants. The settlement with the Zylka family members has resulted in $187,000 from the auction of cars they turned over, $253,000 proceeds from the sale of their residence, 11.3 million shares of Crystal Graphite Corp. and all of the corporations formed with the funds. I additionally expect to receive funds from the sale of property in Conn. held in trust for the two daughters. I dismissed the suit against one of the law firms. There are fifteen remaining defendants in the Zylka suit, which I am continuing to pursue. The Fouts suit is still in the discovery stage. There were ninety-three suits filed against brokers to recover commissions. Twenty-six of these were dismissed and one broker died. Two cases have been settled. A broker test case against Harold James Kime and First American Life and Health Insurance Corporation was completed on March 4, 2003. I anticipate the Court will rule on this case within the next few weeks. Subsequent to the ruling in the test case, I will ask the Court to order mediation in the remaining sixty-three broker suits. The malpractice suit against Averett Warmus et al, one of Evergreen's CPA's, is still in the discovery stage. The suit in the Bahamas against Greg White, Evergreen's owner until 1998, for over $1.4 million in payments to him and other damages in excess of $50 million is still in the discovery stage. The malpractice and RICO suit against Windels Marx et al, James Conroy and William J. Zylka for an unspecified amount of damages has been removed from Bankruptcy Court and is scheduled for a jury trial in Federal District Court in Orlando in May 2004. This suit is still in the discovery stage. During January I filed suits against the two securities custodians of Evergreen, The Bank of Butterfield & Son Limited and Bear Stearns & Co., Inc. Additionally during January, I filed a suit against Clarence Riggs, CPA, who prepared the tax returns and consulted with the managers about Evergreen and its predecessor companies. Also during January, I filed suits against Evergreen's two investment advisors, Atlantic Portfolio Analytics & Management, Inc. and West Side Advisors, L.L.C. 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 in 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. The Court will issue orders approving the objections with no responses and those which have been resolved. Claimants with unresolved objections were notified of a Court hearing in Orlando about their claims. These hearings are scheduled for April 29, May 29 and June 4 and 5, 2003. If you would like to provide me with any information in this case, please mail, fax or e-mail it to me. I have changed my contact information from those listed in previous reports. 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 341 N. Maitland Ave., Suite 210 Maitland, Fl 32751 Phone 407-644-3781 ext. 235 Fax 407-644-3943 e-mail rcuthill@msn.com |
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| Official Committee of Unsecured Creditors for Evergreen Security, Ltd. |