What is a Receiver? A Receiver is an individual appointed by the United States District Court as a neutral party to assume control over assets that are the subject of a dispute. As in this case, the District Court provides instructions in the form of a court order concerning the Receiver's various responsibilities, duties and tasks. Here, Mr. Seaman was given control of all of the assets of the Medical Capital Holdings and its affiliates (collectively, the "Companies"). The Order Appointing a Receiver calls for the Receiver to marshal and preserve assets and to pursue claims to recover and preserve funds, assets and property of the Companies. The Receiver makes periodic reports to the Court. In the end, the Receiver will distribute the recovered assets, if any, to investors and creditors in accordance with an order from the Court.
Has the Receiver identified and located all of Medical Capital's assets? The Receiver has identified, seized or taken control of all known assets. The Receiver is continuing to investigate and work on a forensic accounting which may reveal other assets.
Is the Receiver actively trying to collect the medical receivables? Yes. The Receiver is collecting the medical receivables as well as other receivables. The Receiver has notified all known accounts receivable borrowers, payers and other obligors. In addition, the Receiver has taken possession of lock box bank accounts established for the collection of accounts receivable.
When will we start getting our interest payments again, or get our lump sum investments returned to us? It is unlikely that interest payments will be made to investors during this case. Once the accounting is complete and the Receiver has more information as to the amounts recovered, the Receiver will propose both a process for investors to file claims and a plan of distribution of assets that are recovered.
Can I write off my investment loss? The Receiver cannot give tax or other legal advice. You might want to give a copy of the SEC Complaint to your accountant or tax advisor and seek their advice.
Will I be receiving periodic distributions? The Receiver understands that certain investors had been receiving periodic distributions from the Companies. At present, the Receiver has determined that no further distributions will be made, pending future development in this case.
Can you have the custodian bank or trustee (Wells Fargo and/or Bank of New York) pay the interest payment while MCH is under investigation? At the outset of the case, the trustees were not holding funds sufficient to make interest payments to note holders. As noted above, at the outset of the case the Receiver determined that the cash flow is not sufficient to allow for interim distributions to investors.
Do you have an estimate of what percent of our original investment may be returned to us in the form of a distribution? It is simply too early to make such an estimate. It appears that note holders have unpaid principal in excess of $1 billion. Accordingly, for example, in order for the Receiver to return 20% to noteholders, he would need to recover at least $200 million net of expenses to distribute this sum.
Will you be sending out some sort of formal paperwork whereby we can officially "opt out" of our investment with Med Cap? No.
How do I file a claim? If and when assets are recovered and there are funds in the receivership estate which are available for distribution, a claims process will be established. As a first step in this process, investors will receive a proof of claim form.
How do I contact the Receiver? If you have questions or concerns, you should write the Receiver at the following address: 3 Park Plaza, Suite 550, Irvine, California. You may also communicate via email through this website. Due to the large volume of calls, and to keep down the cost of the receivership, it may not be possible for the Receiver to return investor calls. Therefore, please try to refrain from calling the Receiver. If you must call, the Receiver's telephone number for this matter is: (949) 222-0305. The website will also be updated to reflect significant receivership events.
Is my Broker Dealer, responsible for my losses, and, if so, what will the Receiver do? Investors will need to consult with their own attorney to ascertain their rights to pursue personal claims against brokers.
What was the role and the responsibility of trustees (Wells Fargo and BONY) for investor losses? If they are responsible, who will pursue the claims? The Receiver is conducting an investigation as to these issues and will report to the Court on this issue at a later time.
Is a full list of investors who invested in Medical Capital available for public review? No.
Can we get more real time updates on your web site? The Receiver is filing monthly reports with the court and the website will be updated each month accordingly and whenever there is something substantive to report. Website visitors may request an email when the website is updated by clicking here and going to the home page and following the instructions found there.
Are the principals of MCH subject to any criminal action? The Securities and Exchange Commission's lawsuit is a civil case. The Receiver has no responsibility or authority to prosecute criminal actions. Such matters are handled by the criminal authorities.
Can we sue the Companies? No, the Securities and Exchange Commission lawsuit stayed actions against the Companies. This was done to give the Receiver time to locate and marshal the Company's assets.
Who does the Receiver work for? The Receiver is an agent of the Court and therefore works for the appointing Judge. The beneficiaries of the Receiver's work are all of you, the investors and creditors. Some investors have expressed the mistaken notion that the Receiver is adversarial to them. This is absolutely not so. It is just the opposite of that.
Is the Receiver under any time constraints by the Court and the SEC? There are no specific time frames specified by the Court. In addition, investors are advised that the receivership is part of Securities and Exchange Commission lawsuit enforcement litigation. Litigation by its very nature takes time. Notwithstanding the foregoing, the Receiver intends to move as quickly as possible, given the circumstances, but respectfully requests investors to be patient.