Checks Mailed To Investors In Bankrupt Bennett Companies; Payment To Unsecured Creditors Sets Precedent.SYRACUSE, N.Y.--(BUSINESS WIRE)--Aug. 17, 1998--Approximately 9,000 unsecured creditors Unsecured Creditor An individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because they have nothing to fall back on should the borrower default on the loan. A debenture holder is an unsecured creditor. of the bankrupt Syracuse-based Bennett Companies today were mailed checks totaling $40 million as the first interim distribution in the $1 billion fraud case, described as the largest ever involving a Ponzi-type scheme. Representing 6 percent of the money owed to the mostly individual investors comprising Bennett's unsecured creditors, today's distribution marks the first time that unsecured creditors in a bankruptcy resulting from a Ponzi scheme A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time. have received such a large and widespread distribution at such an early stage of a bankruptcy case. "I am thrilled to be able to begin the process of repaying individuals who were the unsuspecting victims of such a massive swindle swindle v. to cheat through trick, device, false statements or other fraudulent methods with the intent to acquire money or property from another to which the swindler is not entitled. Swindling is a crime as one form of theft. (See: fraud, theft) ," said Bankruptcy Trustee Richard C. Breeden, a former chairman of the U.S. Securities and Exchange Commission. Unlike most cases of this kind, where unsecured creditors receive little or nothing as compensation for their fraud losses, Breeden expects that today's distribution will be the first of several ultimately totaling more than 35 cents on the dollar. "Though we hope to wind up the formal bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party as quickly as possible, we didn't want to delay the repayment process to so many people for a day longer than necessary. Having protected the interests of priority and secured creditors One who holds some special monetary assurance of payment of a debt owed to him or her, such as a mortgage, collateral, or lien. , it is a happy occasion to begin repaying our individual investors," Breeden added. "When the case began, prospects for the unsecured creditors were pretty bleak, as is always true in massive fraud cases," Breeden continued. "After lots of hard work by many people, I am now optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we will achieve a substantial repayment for our unsecured creditors." Breeden has previously reached settlement agreements with 200 of 245 banks that, at the beginning of the case, claimed to be secured creditors. The Bennett Companies filed for Chapter 11 bankruptcy in March 1996, owing creditors more than $1 billion, in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of an investigation by the Securities and Exchange Commission and federal criminal authorities into the companies' alleged sales of fraudulent securities. It was initially estimated that only $309 million of this debt was recoverable; however, total recoveries to date have reached approximately $500 million, including a $125 million settlement in principle reached earlier this month with Italian insurance company Generali U.S. Branch and its affiliate, Assicurazioni Generali Assicurazioni Generali S.P.A. is the largest insurance company of Italy.[1] It is headquartered in Trieste. Under the name of Imperial Regia Privilegiata Compagnia di Assicurazioni Generali Austro-Italiche, the company was founded on December 26, 1831. SPA, which provided insurance on the Bennett securities.
CONTACT: The Bennett Companies
Richard C. Breeden
(315)422-9000 x377
|
|
|||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion