U.S. Bankruptcy Judge Advise Telexfree Victims On The Way Forward

VICTIMS ADVISED BY US BANKRUPTCY JUDGE

A lot happened over the past few weeks in the Telexfree saga. Aside the company's plea for a bankruptcy hearing in Nevada being turned down, and the principal owners either arrested or on the run, the firm's affairs are now being overseen by an outsider and the FBI set up a Telexfree Victim Assistance portal.

This article, however, is to bring to the fore, the advise on what to do next, as given by a U.S Judge to all Telexfree affiliates who lost money when the company went down.

U.S. Bankruptcy Judge Advises Telexfree Victims

The advise on the way forward for former Telexfree affiliates who feel defrauded by the company, came from U.S. Bankruptcy Judge Melvin S. Hoffman, who by the way appointed the trustee overseeing Telexfree now.

According to reports by the Telegram, Judge Hoffman gave the advise during the bankruptcy court hearing of last week.

Some of the victims showed up in bankruptcy court Tuesday, hopeful for some shred of information about the fate of their money. U.S. Bankruptcy Judge Melvin S. Hoffman told them to file a claim as a creditor through the bankruptcy court.

"There is still no clear sense you will be able to recover anything at the end of the day," he said. "You are going to have to file a claim and wait."

Joseph P. Davis III, a lawyer representing TelexFree, said that the SEC has seized about $120,000 in cash from the company, as well as all of its computers, which contain its lists of clients. Judge Hoffman said he would like a list of those clients — now victims — as soon as it can be made available.

One woman in court claimed she has lost $65,000 to TelexFree. She said she was told by a company employee that she could earn $300 a week posting online advertisements for the company. Like others in the courtroom, she was told to file a claim.

In other words, the learned Judge advises victims the world over to file claims as creditors through the bankruptcy court. See the emboldened words above.

The Problems

One looming problem, which I envisage, is how to coordinate the filing of claims from thousands of former affiliates literally scattered about in different places across the world. Coordinating this, in my opinion, would be a very difficult and logistically-tasking process. The report notes:

TelexFree's bankruptcy lawyer told a U.S. Bankruptcy Court judge Tuesday that there may be over 700,000 TelexFree creditors out there — people who handed over thousands of dollars to TelexFree...

Agreed, a "list of clients" exists, but how are the authorities going to coordinate the logistics of these people scattered across the globe in different locations with different laws regarding issues of this nature?

Well, I am not a lawyer, neither do I even understand how issues of this nature should be resolved, but my guts tell me that in all things it is always necessary to follow local laws whenever issues like this arise.

Besides, after the little glimmer of hope offered in the advise, the judge quickly adds in the same breath, almost dashing the 'hopes' to pieces, "There is still no clear sense you will be able to recover anything at the end of the day." Now what would you say to that?

That being said, how do you get people to respond positively, when you get their hopes high, and immediately, literally plunge them again into an ocean of despair and hopelessness. Anyways, one would only say the good Judge was taking the bull by the horns, and saying the truth the way it is.

Whether all this will result in anything positive is difficult to predict at this stage because all the odds keep stacking themselves up.

Of course, we already know, or can rightly guess, what is probably going to happen to TelexFree's principal owners, James M. Merrill of Ashland and Carlos Wanzeler of Northboro.

Now, however, it will be very interesting to see how all these play out in the end, both for Telexfree on the one hand and for its former affiliates on the other.

So, former affiliates, what do you think?