| Opinion; Objection to David Lapin's Ch 13 Bankruptcy Filing |
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May 18, 2003
TO: All Lapin & Wigginton, Ltd Investors
FROM: Robert Behar and Clive Fleishman
Managers for the Investor Group, overseeing Lapin's Bankruptcy
RE: David Lapin, Bankruptcy Ch 13, Plan Approval & Discharge of Debt
Dear investors,
This letter will serve as an update on the Lapin Bankruptcy matter, and to provide further opinion and analysis.
Lapin's Bankruptcy Plan:
Mr. Lapin has filed a Second Amended Plan which was listed on the website www.GetMoneyBack.org on May 14th, 2003. This is a pertinent review and analysis of Mr. Lapin's Second Amended plan:
1) Anticipated Total General Unsecured Claims: $403,828,476.61
(This includes duplicates and filed amount of claims that have been settled which when resolved may reduce the total amount of the claims.)
2) Gross Amount From the Debtor (for plan duration): $1,148,000.00
3) Minus Trustee's Compensation, Fees and Expense Fund: $114,800.06
4) Net Available to Creditors: $1,033,299.84
In the Second Amended Plan, the Debtor's (Lapin) interest in non exempt property (mostly interests in real estate and family partnerships) will remain the property of the Estate to be liquidated with the proceeds adding to the $1,148,000.00. The debtor will retain his interest in his home ($1,249,900 market value listed by HCAD), household goods, clothing, automobiles, and retirement accounts. The Debtor shall contribute an additional $48,000.00 in monthly payments of $2,000.00 beginning October of 2003.
The Securities and Exchange Commission:
Mr. Allan Buie, the attorney for the Securities and Exchange Commission (817-978-0581), has agreed to recommend support for the Second Amended Plan, if in addition to the payments set forth above, the Debtor shall pay an additional $250,000. The Debtor will also agree to entry of an injunction against him that will prohibit him from ever again being employed or otherwise participating in the securities industry.
The plan further states,
"IF THE DEBTOR COMPLETES THE TERMS OF THE SECOND AMENDED PLAN, THE SEC SHALL MAKE NO OTHER CLAIM AGAINST THE DEBTOR."
The plan also states that "...the Debtor agrees to be bound by the terms of the Agreed Judgment to be entered upon or following the confirmation of the Second Amended Plan..." We are not certain what is in the Agreed Judgment. Although we have requested the proposed agreement, we have not been successful in obtaining it at this time.
REGARDLESS, IT IS OUR OPINION THAT IF THE PROPOSED SECOND AMENDED PLAN IS APPROVED, DAVID ISAAC LAPIN WILL BE DISCHARGED OF ALL ALLEGED FRAUD AND WILL NOT BE REFERRED BY THE SECURITIES AND EXCHANGE COMMISSION TO THE DEPARTMENT OF JUSTICE FOR CRIMINAL INVESTIGATION AND/OR PROSECUTION.
The majority of the investors that we have spoken with are very much opposed to Mr. Lapin being discharged of any alleged fraud. These investors also understand (as was stated in our previous letter dated May 11th, 2003) that the Estate actually receives MORE money (approximately $250,000.00 - $500,000.00 - which Mr. Lapin's counsel claims comes from "EXEMPT" assets) in the proposed Chapter 13, rather than in a Chapter 7.
HOWEVER, UNLIKE CHAPTER 13, A CHAPTER 7 DOES NOT DISCHARGE FRAUD, NOR MAKES MR. LAPIN IMMUNE FROM FURTHER CIVIL ACTIONS FOR ANY ALLEGED FRAUDULENT ACTIONS.
We believe that investors need to decide which of these two issues (MORE MONEY FOR THE ESTATE vs NO DISCHARGE OF ALLEGED FRAUD) are more important to them. In regards to our call for support, we have now received over 200 letters from investors supporting our Motion to Convert to a Chapter 7.
Every Investor should also know that any additional money that the Estate receives will be subject to legal costs, accounting, trustee's commissions, and expenses. Of the amount that remains, Class 8 Creditors (investors holding interests in the real estate limited partnerships) will be entitled to only 35% of a prorata share of the amount distributed according to the bankruptcy plan. This effectively reduces the absolute monetary value of the additional money funded by the proposed Chapter 13 plan to the individual investors to a minuscule amount when compared to the overall dollars they had entrusted to Mr. Lapin and his associates to invest for them. We estimate for the typical investor who invested $100,000 in the real estate program, and received half their money back through the efforts of the General Partners, the additional Debtor contributions could result in an additional distribution of $31 - $62 from the Estate.
Hearing Date:
The confirmation hearing and final decision on this Motion to Convert is scheduled in the Federal Courthouse, 515 Rusk Avenue, on Tuesday, May 30th, 2003 at 9:30 AM. The Honorable Judge Wesley Steen presiding. We encourage all investors to attend this
hearing.
Complaints to the SEC:
For those investors who feel as we do that the Security and Exchange Commission (SEC) has not served our interests by agreeing to the Second Amended Plan, we urge you contact the SEC. You can call them at 817-978-0581, or write the main office at:
SEC Complaint Center
450 Fifth Street, NW
Washington, D.C. 20549-0213
OnLine Form: http://www.sec.gov/complaint/cf942sec9570.htm
Write / Email Your Elected Officials:
You may also want to write your Senators and Congressional Representatives and voice your concerns regarding the SEC's proposed actions.
Senators:
Sen. Kay Bailey Hutchinson, 284 Russell, Senate Office Building, Washington DC 20510, Phone: 202-224-5922 Email Form: http://hutchison.senate.gov/e-mail.htm
Sen. John Cornyn, United States Senate, Washington, DC 20510, Phone: 202-224-2934 Email Form: http://cornyn.senate.gov/
House of Representatives:
You can find your representative by going to the following website and entering your zip code. http://www.house.gov/
Representative Billy Tauzin of Louisiana is chair of the Committee on Energy and Commerce, which provides oversight for the SEC in the House of Representatives. You can email him at: http://www.house.gov/tauzin/
Contact the Trustees:
Mr. Robert Ogle, Trustee for Premier (L&W and Money Mortgage):
mailto:premiereliqtrust@netscape.net
Mr. David Peake, Trustee for David Lapin's Chapter 13
9660 Hillcroft, Suite 430, Houston, Texas 77096
Phone: 713-283-5400; Fax 713-852-9084
It is imperative that you reference United States Bankruptcy Case No. 02-40363-H2-13, David Isaac Lapin, in your correspondence and e-mails. This important matter is due to be settled in 10 days. TIME IS OF THE ESSENCE.
CLICK HERE FOR FORM (TO JOIN PETITION TO CONVERT)
