URGENT >> BULLETIN >> MOVING: TelexFree Trustee Says He ‘Has No Intention Of Reorganizing Or Reactivating Their Businesses’
URGENT >> BULLETIN >> MOVING: (1st Update 8:50 P.M. EDT U.S.A.) The TelexFree trustee said in court filings today in the SEC’s civil case against the firm that he has “no intention of reorganizing or reactivating their businesses” and — based on information and belief — “they were in fact engaged in a Ponzi or pyramid scheme.”
“Based on information currently available to the Trustee, the Trustee admits that the individual defendants operated a Ponzi/pyramid scheme as evidenced by, among other things, the revenues from the retail sales of the VoIP were less than one (1%) percent of the amounts needed to satisfy the promises to the investors who had placed the Internet ads. Further, based upon the information available to the Trustee, it appears that the early investors were paid not from sales of the VoIP services but rather from the money received from the later investors, thus evidencing a classic Ponzi/pyramid scheme,” Trustee Stephen B. Darr said.
Although TelexFree filed for Chapter 11 bankruptcy protection in April, Darr said today that “Debtors have ceased all operations and all other business activities other than to liquidate assets and to pay back creditors.”
Jordan Maglich of PonziTracker.com is reporting tonight that the development may signal a Chapter 11 reorganization may be off the table.
From PonziTracker.com (italics added):
Thus, it appears that a conversion from a Chapter 11 to a Chapter 7, which liquidates the debtor, is likely.
NOTE: Our thanks to the ASD Updates Blog.