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plankton

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Posts: 65
Reply with quote  #1 
I'm sure you all received this today in your inbox.  What does 'enter into an agreement for the sale of assets free and clear of claims...' mean?  What is being auctioned off and where will the money go?

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Today BullionDirect, Inc. filed Debtor's Motion for Order (a) Authorizing Debtor to Enter Into an Agreement for the Sale of Assets Free and Clear of Claims, Interests, Liens and Encumbrances, (b) Approving Procedures and Notice with Respect to Sale, (c) Scheduling an Auction and Hearing for Approval of Sale, and (d) Granting Related Relief (Doc#143).  (Click Sale Procedures Motion to see the document) and a Motion for Expedited Hearing (Doc#144) requesting that the hearing be set for March 28, 2016, at 1:30 p.m. (Click Motion to Expedite to see the document). 
We will send updates when they are available.

Sincerely,

Joseph D. Martinec
Martinec, Winn & Vickers, P.C.
Attorneys for BullionDirect, Inc.
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Cbrad01

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Posts: 29
Reply with quote  #2 
I think it means, we get nothing, the lawyers pocket their fees and his mom pays a $100,000 for the assets and most importantly a liability release from us...
I would guess what they are after is the liability release and are willing to spend up $200,000 to get it.
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Alabama

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Reply with quote  #3 
I'll settle my 20k claim for 0 if you credit $10 a day toward CM for every day he spends in prison.
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saxster

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Posts: 106
Reply with quote  #4 
I'd like nothing better than to see Dan, Joe, Chuck and his mommy in dirty orange jump suits living on the curb in a single cardboard box eating Dog Chow out of one tiny little bowl.

When is this case finally going to go criminal?  I want ALL their assets and those of every board member that ever served on BullionDirect divided among the aggrieved customer base.  

These "legal" proceedings are insane.  

Texans are thought to be dumber than a bag of hammers.  If the court approves this motion, then it's proven beyond a doubt.

Do you hear me Joe, Dan, Chuck and Cheryl Huseman?  You are all blood-sucking parasites that need to be squashed like bugs.
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johnnyeagleeye

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Reply with quote  #5 
What??? I have been lulled into stupor and coma lately due to the lack of legal activity on this case. Am I to understand that Chas's mommy wants to buy the Nucleo software for 100k and be released from all liability? What happened to the purported value of over a million? Who is Murph aside from the dumb Irishman who left the "Y" off his last name? Perhaps 100k is what it will take to pay off the Martinec lawyers and Dan B. leaving nothing for we poor creditors of BD. This is an "inside job" if I ever have seen one! Guess what? There will not likely be any other bidders stepping up to buy Nucleo. I will not rest until I see Chas in ankle shackles using a sledgehammer in Mississipi "breaking up rocks for the great highway" (lyrics from Easy Wind recorded by the Grateful Dead).
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stolenmetal

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Reply with quote  #6 
No, no.  If I read it correctly, this may actually be a good thing.  The actual sale looked like for the first year 80% ownership by the "Trust", year 2 60% (I think that was the number) ownership by the "Trust" and by year 4+ 50% ownership by the "Trust". The "Trust" is defined in the document as being

"Created by the Plan; BDI Creditors (you and me), including unpaid admin claims with consent, are beneficiaries of Trust in order of priority proscribed by Bankruptcy Code and Plan; transferred assets shall consist of: (i) all causes of action held by BDI estate and subsidiaries, except claims or causes of action against NDC;(ii) all Chapter 5 causes of action, (iii) all contents in BDI directed vault (est. $700,000) (iv) notes receivable (est. $130,000); (v) $50,000 of estate cash; and (vi) estate profits participation interest; Trustee of Trust will be approved by Court with consent of creditors; Balance of professional claimants of chapter 11 estate (after using $100,000 purchase price proceeds and remaining cash in estate), and any other administrative claimants who agree to such treatment, will be beneficiaries of Trust and receive payment from Trust’s portion of Net Income on a pro rata basis under priorities set forth in Bankruptcy Code" 


Basically, the creditors become shareholders, according to the proportion they are owed.  If this actually pans out (it's a long shot . . .but hey) there is some actual way to be made whole (it might take 10 years!).  As of right now, we'd get pennies (if that more likely 0 considering all the legal fees). With newco-there is a slight chance we actually get paid back.


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JG

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Posts: 960
Reply with quote  #7 
Quote:
Originally Posted by saxster
When is this case finally going to go criminal?


There is or was a criminal investigation.

For comparison, it took 17 months from the time The Tulving Company shut down until a guilty plea was recorded. It has been about 9 months since Bullion direct shut down. I have information suggesting that the investigation is still proceeding. And given the differences between this and The Tulving Company, I would have a hard time imagining this one would be dropped.

Quote:
Originally Posted by saxster
Texans are thought to be dumber than a bag of hammers.  If the court approves this motion, then it's proven beyond a doubt.


While I am no fan of Dan, Joe, Chuck, or his Mom, the motion does seem appropriate from what I can tell. I'm sure that the creditors' committee would not have approved the motion if they thought there were likely to be better opportunities out there.

Basically, Dan wasn't able to start up the business based on the security product or whatever. So it's just the patent, software, and other intellectual property. But it seems that there is little demand out there for it.

Remember one other piece -- if Mom is able to make a go out of it (and she has strong incentive to -- not only does she make money, but the more creditors get, the better off her son may be), it benefits creditors. Creditors will get a percentage of profits if it is successful. I'm not trying to say it will be profitable (they have 2 hurdles: first, regaining trust, and second, increased spread), but if it is, it will benefit creditors.

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JG

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Reply with quote  #8 
Quote:
Originally Posted by johnnyeagleeye
Am I to understand that Chas's mommy wants to buy the Nucleo software for 100k and be released from all liability? What happened to the purported value of over a million? Who is Murph ...


It is only Mom (and her husband) that will be released from liability. It's a catch-22: if she isn't  released from liability, she ain't gonna do this. If she is released from liability, creditors might lose out if she did something bad.

The $10M valuation came from "an independent firm from Dallas." But even if it was completely fraudulent and organized by Mom, what good would it do to try sue her? The valuation was likely not done with the understanding creditors would see it, and the damage we know of is that the bogus valuation provided false hope to creditors, which is something the law may not even care about. The other thing to remember about the report is that it is based on someone who wants to take the technology and run with it (someone willing to spend $10M would have a lot more than $200K to get the business running successfully). And it was also not based on a tarnished reputation.

As for Murph, it appears he is Charles' step-father.

Quote:
Originally Posted by johnnyeagleeye

Perhaps 100k is what it will take to pay off the Martinec lawyers and Dan B. leaving nothing for we poor creditors of BD. This is an "inside job" if I ever have seen one! Guess what? There will not likely be any other bidders stepping up to buy Nucleo.


If a creditor -- or group of creditors -- wanted to, they could put in a bid. $135+K isn't out of the question for some creditors.

And if someone like APMEX or JM Bullion or Provident or Gainesville came in, they could easily offer more cash. The customer list would be invaluable to them, and the technology could open up a new revenue stream.

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tboll

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Posts: 292
Reply with quote  #9 
I like the part where if perchance someone else takes interest in bidding and Mom-Stepdad lose out, they are awarded $25,000 for having started the bid. [smile]

Why doesn't the Creditor Committee buy the patent, restart the business, and keep all the profits until they sell off the business?  If Charles didn't make any profit from the company over the umpteen years he operated BD, I really don't see much profit coming from Mom's Newco business over the next 7 years.  

As for the ~$600K-worth of assets in the vault at the beginning of Chapter 11, is this proposal stating that those assets should now be sold?  Will the proceeds be disbursed to the creditors as soon as possible?
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JG

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Posts: 960
Reply with quote  #10 
Quote:
Originally Posted by tboll
I like the part where if perchance someone else takes interest in bidding and Mom-Stepdad lose out, they are awarded $25,000 for having started the bid. [smile]


It turns out that is not uncommon (it happened with The Tulving Company bankruptcy). It's called a Stalking Horse bid. Someone agrees to buy the assets, but conditioned upon an auction where they can get outbid. However, it costs money to put in the offer (in this case Mom-Stepdad stated that they have already put in over $25,000), so they get compensated if there is a better bid.

Without doing it this way, they would have an auction -- and it could end up going for even less money.

Quote:
Originally Posted by tboll
Why doesn't the Creditor Committee buy the patent, restart the business, and keep all the profits until they sell off the business?  If Charles didn't make any profit from the company over the umpteen years he operated BD, I really don't see much profit coming from Mom's Newco business over the next 7 years.  

As for the ~$600K-worth of assets in the vault at the beginning of Chapter 11, is this proposal stating that those assets should now be sold?  Will the proceeds be disbursed to the creditors as soon as possible?


Part of the plan is to change the commissions from 2% to 3%. I don't believe that a creditors' committee would normally run a business -- that's normally up to Dan to do, but it sounds like he gave up (trying to get the secure packaging thing to work; had that worked, he would have tried starting up the business again).

Also, the lack of profit was not just due to the business model, but things like conveniently taking out $250K salaries. And looking at $16M gold mining investments.

I believe the contents of the vault would be property of the creditors' trust, which would then at some point get sold and used for the various things money can go to: mainly expenses and distributions to creditors.

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Cbrad01

Junior Member
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Posts: 29
Reply with quote  #11 
I think this is it, unless the creditors (us) want to raise the money ourselves to outbid Mom...
I do think the value to Mom is not the assets themselves but the release of liability.
Depending on the background the exposure to actions may be large enough to justify paying the 100k to get the release.
Its all about the risk, but I doubt we will every see anything the pennies on the dollar at best...
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roadrunner

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Posts: 9
Reply with quote  #12 

I can't comprehend all of the information presented in the bankruptcy court document.

Assuming the sale goes through and takes place in 2016, will we be able to claim a tax loss on our 2016 tax return? Or will we be considered part owners with no clear end in sight?

I've resigned to the fact that all of my money is gone, and I'm not going to get any meaningful settlement. I just want to be able to write off what I can, and move on.

Thanks

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JG

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Posts: 960
Reply with quote  #13 
Quote:
Originally Posted by roadrunner
Assuming the sale goes through and takes place in 2016, will we be able to claim a tax loss on our 2016 tax return? Or will we be considered part owners with no clear end in sight?


That is a loaded question -- that I am working on getting as close to an answer to as I can.

Basically, there are 2 ways to deduct the loss. One is a capital loss (similar to how you would handle a stock that became worthless). The other is a theft loss.

With a capital loss, you cannot take a deduction until you have sold or otherwise disposed of the asset. In this case, it would be when all money that can be recovered has and has been distributed.

With a theft loss, it is possible to take a deduction earlier for the amount that reasonably cannot be recovered (or some such wording). But, that amount would likely need to be determined by Dan Bensimon (e.g. "We do not expect to be able to recover more than X% of the money creditors are owed"). And I believe that value is as of the last day of the tax year you want to write it off on (e.g. he could come up with a value for December 31, 2015, which might be more or less than what it would be now).

I do plan to put together a page with more information within the next few days.

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tboll

Senior Member
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Posts: 292
Reply with quote  #14 
Can you even claim this as a "theft" loss until there is some sort of indictment or prosecution?  At this point, isn't this just an "investment loss"?  If we eventually become shareholders to this new company, it makes this whole fiasco look even more like a investment venture.
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JG

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Posts: 960
Reply with quote  #15 
Quote:
Originally Posted by tboll
Can you even claim this as a "theft" loss until there is some sort of indictment or prosecution?  At this point, isn't this just an "investment loss"?  If we eventually become shareholders to this new company, it makes this whole fiasco look even more like a investment venture.


There does not have to be an indictment. I believe that a law needs to have been violated, and a theft actually occurred. But an indictment is not necessary.

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