Frequently Asked Questions
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 appointed as the Receiver. Mr. Seaman was given control of all of the assets of 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.
Will I be receiving 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. The Receiver has no estimate as to when or if there will be funds available to make distributions to investors in the future. Such distributions will depend upon, among other things, the outcome of the underlying lawsuit by the Securities and Exchange Commission and the amount of money recovered by the Receiver.
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.
I have not received a K-1, will I be getting one from the Receiver?
At present, the Receiver is not in a position to prepare K-1's. The Receiver will investigate the possibility of issuing K-1's in the future.
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 should receive an Investor Questionnaire in the mail in the next week.
What is the status of Carolina Development Company going public?
The Receiver has found no evidence of any definitive or imminent plans of the Companies going public.
Should I file a lawsuit against Vander Tag and/or the Companies?
The Court entered a stay on all litigation against the Defendants and the Companies in order to allow the Receiver to fully investigate and pursue claims for the benefit of the Receivership estate whose beneficiaries ultimately are the investors.
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. This website will also be updated to reflect significant receivership events.
When is the next court date?
There have been no hearings held on this matter since the hearing on February 27, 2006 when the Preliminary Injunction was granted. Many investors have been informed by Company sales people and others that there was a hearing on March 13, 2006 . When there was no hearing, some people were then informed that rather than a hearing on that date that a “closed door” meeting was held in chambers with the Judge. Neither is true, there have been no hearings since that date. Investors will be notified of any significant hearings that would affect their interests.
Is the Receiver going to sell the Company as a going concern or sell the assets individually?
The Company assets are all unique and unrelated and there does not appear to be any synergies created by selling them as an enterprise. The Receiver's initial opinion therefore is that the sum of the parts will exceed the value of the whole. The Receiver is therefore proceeding with a separate unique strategy for dealing with the disposition of each asset. Moreover, this is not a bankruptcy matter wherein reorganization is possible. Notwithstanding the foregoing, if the Receiver if given an extremely large offer for all of the Company assets, he will most assuredly consider it.
Has the Receiver ordered appraisals on the properties?
Yes. The Receiver will be seeking court approval to sell all significant assets of the Company. In connection the motions to approve the sales will require appraisals. Investors will receive notice of the sales motions. The appraisals will be available in the Court's files, which are a matter of public record. Further, the sales will be subject to an overbid procedure, which will ensure that the Receiver does not sell the properties for less than they are worth.
Will investors who received their shares for reasons other than directly investing cash into the Company participate in distributions made by the Receiver?
Any distribution to shareholders will be on the basis of a court order determined by the Judge based on the recommendation of the SEC and the Receiver. It is too early to inform investors what form that may take. However, for now suffice it to say that any distribution will be fair and equitable; so for example if a sales person received their commission in the form of shares, the Receiver would most likely object to a distribution to that sales person for those shares.
Will distributions be made on the basis of the number of shares held or the dollars invested?
Dollars invested.
Can we sue the company?
No, the SEC is seeking a stay which will prevent lawsuits. This is being done to give the Receiver time to locate and marshal the Company's assets.
Will you consider hiring Dennis Bickler of Discovery Land Group?
Mr. Bickler has already been hired by the Receiver to assist the Receiver with land development issues. The Receiver has instructed Mr. Bickler to not communicate with investors because,
- Mr. Bickler does not wish to communicate with investors
- Mr. Bickler has been retained to advise the Receiver on land development and land use issues
- the Receiver does not wish to expend receivership assets (i.e., the money being recovered to ultimately be returned to investors) to pay Mr. Bickler to talk to investors, and
- the Receiver would rather have Mr. Bickler spend his time trying to add value to the Company assets.
Have any of the allegations against Vander Tag or the Company been dropped?
Absolutely not. The Court has entered a Findings of Fact which can be viewed in the Case Documents of this website. Previously, certain misinformed and misguided sales people of the Company had sent emails to investors stating that most of the “charges have been dropped.” They cite the fact the Judge lined out the findings set forth in Preliminary Injunction document. This is completely incorrect. At the hearing on the Preliminary Injunction the proposed order provided both the Preliminary Injunction the Court's Findings of Fact. The Judge stated in open Court that she preferred to see these as two separate documents. So she lined out the findings, issued the Preliminary Injunction, and requested the attorneys to submit a separate Findings of Fact document.
Who will pay any fines levied by the SEC?
Any fines will not be paid by the Receiver, but rather by the individuals who are fined, and the good news is that the fines will then be turned over to the Receiver to be included in the funds recovered by the Receiver for the ultimate benefit of investors.
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. Many 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 SEC enforcement litigation. Litigation by its very nature takes time. Notwithstanding the foregoing, this Receiver intends to move as quickly as possible, given the circumstances, but respectfully requests investors to be patient.
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