Securities and Exchange Comm. v. Funding Resource Group

Full title: SECURITIES AND EXCHANGE COMMISSION Plaintiff, v. FUNDING RESOURCE GROUP…

Court: United States District Court, N.D. Texas, Dallas Division

Date published: Dec 20, 2002

NO. 3-98-CV-2689-M (N.D. Tex. Dec. 20, 2002)

Opinion

NO. 3-98-CV-2689-M

December 20, 2002

FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

JEFF KAPLAN, United States Magistrate Judge

Michael J. Quilting, as Receiver for Funding Resource Group, has filed his final report and proposed distribution plan. This matter has been referred to U.S. Magistrate Judge Jeff Kaplan for recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and a standing order of reference dated June 16, 2000.

I.

This is a civil action brought by the Securities and Exchange Commission ("SEC") against 16 defendants and 13 equity relief defendants arising out of the sale of non-existent "prime bank" securities. The SEC alleges that defendants raised more than $14 million from unwitting investors by making false representations about the use and safety of investor proceeds and the expected rate of return on their investments. After more than three years of litigation, the SEC either obtained default judgments or settled with all defendants and equity relief defendants. Agreed final judgments and orders of dismissal were entered on March 6, 2002.

Funding Resource Group a/k/a FRG Trust ("FRG") and its managing partner, Steven C. Roberts, are named defendants in this case. On November 13, 1998, Michael J. Quilling was appointed as Receiver for FRG and Roberts. The order of appointment provides, in relevant part:

The Temporary Receiver shall take custody, possession and control of any and all assets, monies, securities and properties, real and personal, tangible and intangible, of whatever kinds and description, and wherever situated, belonging to FRG . . . [and] Roberts (hereinafter referred to as "Receivership Assets"), as well as any documents relating to the Receivership Assets.

ORDER APP. TEMP. RECEIVER, 11/13/98 at 2-3. Through October 31, 2002, the Receiver has taken possession of and administered cash and other assets belonging to the Funding Resource Group Estate totaling $2,037,566.91.¹ (See Rec. Mot., Exhs. 1 2). The cost of administration totals $582,526.42.² (See id.). The court previously approved claims totaling $9,852,672.74 and the Receiver has made an interim distribution of $1,211,229.34. See FINDINGS REC. of MAG. JUDGE, 1/31/02 4/19/02, adopted as modified, ORDERS, 2/15/02 6/6/02. This leaves $183,496.22 available for final distribution to investors on a pro rata basis. Coupled with the prior interim distribution, each claimant will receive approximately 13.48% of their claim.

1 This sum does not include $238,389.77 in legal and accounting fees repaid by the Hammersmith Trust Estate.

2 This sum assumes payment of $55,314.93 in unpaid legal and accounting fees and the allowance of a $5,000.00 reserve. It is also net of the $238,389.77 repaid by the Hammersmith Trust Estate.

The Receiver was ordered to post a copy of his final report and proposed distribution plan on his website with instructions to all interested parties that any objections must be filed by December 16, 2002. No objections have been received by the Receiver or the court. A hearing was held on December 20, 2002. The Receiver notified all interested parties of the hearing date by posting notice on his website. No one appeared at the hearing or otherwise objected to the report and proposed distribution plan. The Securities and Exchange Commission, through its regional counsel, has consented to the relief sought.

II.

In his final report and proposed distribution plan, the Receiver seeks authorization to: (1) pay $35,721.33 in attorneys's fees and expenses and $19,593.60 in accounting fees; (2) reserve $5,000.00 in attorney's fees and expenses necessary to close the Estate; and (3) distribute all remaining receivership assets to investors on a pro rata basis. The court will address each request in turn.

A.

The Receiver seeks $35,721.33 for legal services performed and costs incurred on behalf of the Funding Resource Group Estate from February 28, 2002 through October 31, 2002. Although no investors have objected to this fee request, the court must nevertheless carefully examine the application to determine whether the time spent, services performed, expenses incurred, and hourly rates charged by the Receiver are justified under the factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974).

To date, the Receiver has been paid approximately $2.4 million for services performed and expenses incurred on behalf of the Howe Financial Trust, Hammersinith Trust, Funding Resource Group, and Cord/Winterhawk Estates. of this sum, $541,206.09 has been allocated to the Funding Resource Group Estate. Although the Receiver has always maintained separate accounts for each estate, this procedure was not formalized until March 12, 2001 when the court required him to designate four separate receivership estates for purposes of handling claims and making distributions to defrauded investors. See ORDER, 3/12/01. In reconciling his records, the Receiver determined that $806,296.82 had been advanced by other estates to pay fees and expenses properly attributable to the Hammersmith Trust Estate.³ The Receiver then promptly moved to allocate fees between the various receivership estates. By order dated April 13, 2001, the court authorized the Receiver to cause the Hammersmith Trust Estate to repay advances made by the other estates, including $238,389.77 to the Funding Resource Group Estate. See ORDER, 4/13/01. These payments will be made "at such time as such funds are needed to make interim and final distributions to investors as may hereafter be approved by the Court." Id.

3 This sum represents: (1) 317,857.87 advanced by the Cord/winterhawk Estate; (2) $238,389.77 advanced by the Funding Resource Group Estate; and (3) $250,049.18 advanced by the Howe Financial Trust Estate.

As a result of the Receiver's diligent efforts, over $2 million in cash and other assets have been recovered on behalf of defrauded investors of the Funding Resource Group Estate. If the current fee application is granted in its entirety, the attorney's fees and expenses incurred by the Estate will total $576,927.42, or less than 29% of the total recovery. This is manifestly reasonable, especially in light of the difficulties encountered by the Receiver in tracing investor proceeds and liquidating concealed assets. Moreover, the court finds that the time spent, services performed, expenses incurred, and hourly rates charged by the Receiver are justified under the factors set forth in Johnson. Accordingly, the Receiver should be authorized to pay the law firm of Quilling, Selander, Cummiskey Lownds, P.C. the sum of $35,721.33 in attorney's fees and expenses.

The Receiver also seeks $19,593.60 in accounting fees incurred from February 1, 2002 through October 31, 2002. To date, the court has authorized payment of accounting fees totaling $529,148.90. of this sum, $18,428.68 has been allocated to the Funding Resource Group Estate. The court finds that the additional fees requested by the Receiver are reasonable and were necessarily incurred for the preparation of tax returns and other accounting services. Therefore, the Receiver should be authorized to pay the firm of Litzler, Senger, Shaw McKenney the sum of $19,593.60.

B.

The Receiver estimates that he will incur another $5,000.00 in legal fees and expenses for preparing and mailing distribution checks, performing final bank reconciliations, and communicating with claimants. The court finds that these fees are reasonable and the anticipated services necessary to close the Receivership Estate. Accordingly, the Receiver is authorized to reserve this sum from funds available for final distribution.

C.

The court previously approved 470 claims totaling $9,852,672.74 and the Receiver has made an interim distribution of $1,211,229.34. There is currently $183,496.22 available for final distribution on a pro rata basis. See SEC v. Forex Asset Management Co., 242 F.3d 325, 331 (5th Cir. 2001) (approving pro rata distribution to investors). Therefore, each claimant should be paid in accordance with the schedule attached hereto as Exhibit "A." The Receiver should issue distribution checks to each claimant in the amounts set forth in the schedule. The checks shall be void if not cashed within 45 days from the date of issuance. The Receiver should be authorized to send a cover letter to each claimant in the form attached to his report.

RECOMMENDATION

The court should approve the Receiver's final report and proposed distribution plan in accordance with the above recommendation.

The Receiver is ordered to post a copy of this report and recommendation on his website, www.secreceiver.com. Any claimant or interested party may file written objections to this recommendation by January 10, 2003. The failure to file written objections shall bar the aggrieved party from appealing the factual findings and legal conclusions of the magistrate judge that are accepted or adopted by the district court, except upon grounds of plain error or manifest injustice. See Douglass v. United Services Automobile Ass'n, 79 F.3d 1415, 1417 (5th Cir. 1996).

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Acker David Lisa $ 9,400.00 $ 175.07 Adams James T. $ 8,200.00 $ 152.72 Adams Vicki Gwen $ 10,000.00 $ 186.24 Adams, Jr. Curtis $ 10,000.00 $ 186.24 Aikins Joseph $ 15,000.00 $ 279.36 Allbright Mark H. $ 5,580.00 $ 103.92 Andrews Sandra $ 10,000.00 $ 186.24 Archer Ernest A $ 18,200.00 $ 338.96 Arney Jim $ 10,000.00 $ 186.24 Arnold Billy M. $ 9,400.00 $ 175.07 Arnold Michael $ 12,000.00 $ 223.49 Arnold Terry $ 18,800.00 $ 350.13 Artz David $ 9,200.00 $ 171.34 Attea Alyce (Deceased) $ 5,000.00 $ 93.12 Bader John $ 10,000.00 $ 186.24 Bader John $ 4,980.00 $ 92.75 Blaker Alvia G $ 9,400.00 $ 175.07 Banta Stan $ 22,332.00 $ 415.91 Banta Vickee $ 6,975.00 $ 129.90 Barber Edward M. $ 9,400.00 $ 175.07 Barber R. Burton $ 28,200.00 $ 525.20 Barber Ray Wayne $ 4,400.00 $ 81.95 Barrera, Jr Leonard A $ 7,600.00 $ 141.54 Barrett Brad $ 18,400.00 $ 342.68 Bartos Dennis Diana $ 14,100.00 $ 262.60 Bartsch John (Deceased) Florence $ 10,000.00 $ 186.24 Bateman Andy $ 24,000.00 $ 446.98 Bell Charles J $ 10,000.00 $ 186.24 Bell Robert $ 10,000.00 $ 186.24 Bellows Ed $ 34,000.00 $ 633.22 Bennett Gary $ 32,000.00 $ 595.97 Bennett Gary $253,000.00 $ 4,711.87 Best Liens $ 10,000.00 $ 186.24 Bezner Jr Frank $ 50,000.00 $ 931.20 Bingham Robert $ 7,900.00 $ 147.13 Bingham Robert W. $ 8,700.00 $ 162.03 Bishop Judy Dan $ 9,020.00 $ 167.99 Blackwell Kenny $ 11,165.00 $ 207.94 Blades Ann $ 27,000.00 $ 502.85 Bolling JoAnn $ 25,000.00 $ 465.60 Bolton Dean $ 9,400.00 $ 175.07 Booker W.E. (Bill) $ 26,400.00 $ 491.67 Boren Tom $253,700.00 $ 4724.90 Bowers Buckalew Elaine Claudia $ 8,000.00 $ 148.99 Bradford Jerry $ 10,000.00 $ 186.24 Bradshaw Carl $ 5,000.00 $ 93.12 Bramson J Keith $ 25,800.00 $ 480.50 Bratcher Jeanie $ 10,000.00 $ 186.24 Bridwell Ken $ 9,400.00 $ 175.07 Bromlow Terry $ 21,000.00 $ 391.10 Brorman A.H. `Tony' $ 42,000.00 $ 782.21

EXHIBIT "A" Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Brorman Mark $ 46,000.00 $ 856.70 Brown Aud W. $ 4,000.00 $ 74.50 Brown Billy G. $ 8,800.00 $ 163.89 Brown Billy L. $ 9,400.00 $ 175.07 Brown Bill L. $ 10,000.00 $ 186.24 Brown David B. $ 8,200.00 $ 152.72 Brown James H $ 11,750.00 $ 218.83 Brown James T $ 11,750.00 $ 218.83 Brown James Tegart $ 9,400.00 $ 175.07 Brown Jimmy E. $ 10,000.00 $ 186.24 Brown John M $ 9,400.00 $ 175.07 Brown Kenneth H. $ 10,000.00 $ 186.24 Brown Kenneth H. $ 30,000.00 $ 558.72 Brown Kirk $ 23,500.00 $ 437.66 Brown Lana $ 4,000.00 $ 74.50 Brown Paul $111,200.00 $ 2,070.99 Brown Randy Lee $ 7,600.00 $ 141.54 Brown Roger Lee $ 5,580.00 $ 103.92 Brown Tracy Gail $ 8,200.00 $ 152.72 Brown Wesley $ 9,400.00 $ 175.07 Buch Annie A $ 9,600.00 $ 178.79 Buckalew Jack $ 91,940.92 $ 1,712.31 Buckalew Polly $ 8,800.00 $ 163.89 Burston Donald L $ 10,000.00 $ 186.24 Burton Claudine $ 13,400.00 $ 249.56 Byers David A $ 18,480.00 $ 344.17 Byers Famous $102,320.59 $ 1,905.62 Callon Gerald V. $ 8,200.00 $ 152.72 Cameron Desmond $ 4,000.00 $ 74.50 Campbell Andy Kern $ 6,300.00 $ 117.33 Cansler Allen $ 23,500.00 $ 437.66 Carnie Anthony E $ 2,000.00 $ 37.25 Carpenter Gerald $ 14,300.00 $ 266.32 Carpenter Ralph (Deceased) $ 9,500.00 $ 176.93 Carpenter Shawn $ 9,400.00 $ 175.07 Carroll Paul C. $ 9,400.00 $ 175.07 Carter Bob $ 11,400.00 $ 212.31 Cathright, Jr Edward $ 10,000.00 $ 186.24 CHapman Nancy $ 8,800.00 $ 163.89 Chau Lance H $ 10,000.00 $ 186.24 Chenoweth Alfred H. Patsy $ 5,580.00 $ 103.92 Chocholousek Stacey $ 8,200.00 $ 152.72 Clarke James T $ 45,200.00 $ 841.80 Coats Maurice $ 65,000.00 $ 1,210.56 Cobb Jere $ 9,000.00 $ 167.62 Coker Terry $ 10,000.00 $ 186.24 Coker Tom Mary $ 95,000.00 $ 1,769.28 Coleman James $ 5,580.00 $ 103.92 Colguett Breck $ 9,400.00 $ 175.07 Cooksey Lamar $ 7,600.00 $ 141.54 Cotton Joyce Y $ 7,000.00 $ 130.37

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Cotton Michael F $ 26,960.00 $ 502.10 Cotton Michael Frank $ 12,840.00 $ 239.13 Cox Burnis $ 10,000.00 $ 186.24 Craig Brent Teresa $ 5,580.00 $ 103.92 Crook James K. $ 8,800.00 $ 163.89 Crosswaite Brad $ 8,800.00 $ 163.89 Crutchfield Vester $145,600.00 $ 2,711.65 Cudworth Beryl Marjorie E. $ 5,580.00 $ 103.92 Cudworth Marjorie Beryl $ 9,600.00 $ 178.79 Cumerford Tracey $ 8,512.00 $ 158.53 Cummins Douglas A $ 8,600.00 $ 160.17 Dallas Steve $ 9,400.00 $ 175.07 Dalton Larry $ 8,000.00 $ 148.99 Daniel Ronnie $ 10,460.00 $ 194.81 Daves Alan Sandy $130,400.00 $ 2,428.57 Davidson Robert A $ 1,000.00 $ 18.62 Dawson Donald S $ 50,000.00 $ 931.20 Degol Larry $ 22,000.00 $ 409.73 DeLuna Louis Carol $ 40,000.00 $ 744.96 Denson Bernice $ 13,200.00 $ 245.84 Denson(VandenHeuvel) Bernice $ 9,400.00 $ 175.07 Derebery Anna $265,000.00 $ 4,935.35 Desmond Vicki $ 7,000.00 $ 130.37 Dickson James E. $ 7,900.00 $ 147.13 Dixon Betty S. $ 8,800.00 $ 163.89 Dixon Betty S. $ 10,000.00 $ 186.24 Dixon C.R. $ 9,400.00 $ 175.07 Dixon C.R. $ 14,000.00 $ 260.74 Dixon C.R. $ 18,800.00 $ 350.13 Dodds Dianna $ 39,200.00 $ 730.06 Donovan Philip $ 7,000.00 $ 130.37 Duncan (Cornett) Jeanette $ 8,800.00 $ 163.89 Durhke Celia $ 77,000.00 $ 1,434.05 Dyer Marvin $ 16,800.00 $ 312.88 Dyer Tammy $ 5,100.00 $ 94.98 Dyer Tammy $ 9,400.00 $ 175.07 Ebert Lee Jay H. Vivian $ 11,165.00 $ 207.94 Edwards Jody $ 20,500.00 $ 381.79 Elias Margaret R $ 10,000.00 $ 186.24 Ellis Rodney $ 39,500.00 $ 735.65 Ellison Evelyn $ 9,400.00 $ 175.07 Erbert Bernie $ 10,000.00 $ 186.24 Everett Opal P $ 16,292.83 $ 303.44 Fakos Constantin $ 10,000.00 $ 186.24 Foote (deceased) Mary $ 16,800.00 $ 312.88 Ford Frank $ 8,800.00 $ 163.89 Ford James C $ 35,200.00 $ 655.56 Ford James C $ 50,000.00 $ 931.20 Ford James Q $ 8,800.00 $ 163.89 Ford Jo Ann (Deceased) $ 26,400.00 $ 491.67 Ford Robin $ 8,800.00 $ 163.89

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Ford Rodney $ 8,800.00 $ 163.89 Fowler Melva $ 8,800.00 $ 163.89 France Terry W. $ 10,000.00 $ 186.24 Franke Joel $ 28,700.00 $ 534.51 Franks Darrell J. $ 5,580.00 $ 103.92 Fritcher, Trustee Joe E. $ 9,400.00 $ 175.07 Gaertner Glenda $ 16,400.00 $ 305.43 Galbraith Arnold P $ 36,000.00 $ 670.46 Gibbs Dave (William) $ 40,000.00 $ 744.96 Gifford Kenny $ 10,000.00 $ 186.24 Gifford Mary I. $ 8,400.00 $ 156.44 Gifford, Jr. Russell Allen $ 8,800.00 $ 163.89 Gifford, Jr. Russell Allen $ 10,000.00 $ 186.24 Gifford, Sr. Russell A. $ 10,000.00 $ 186.24 Gifford, Sr. Russell A. $ 16,800.00 $ 312.88 Gifford, Sr. Russell A. $ 18,400.00 $ 342.68 Gifford, Sr. Russell A. $ 27,600.00 $ 514.02 Gifford, Sr. Russell A. $ 70,000.00 $ 1,303.68 Giles Anthony $ 10,032.00 $ 186.84 Grantham Don $ 10,000.00 $ 186.24 Grantham Don $ 27,915.00 $ 519.89 Grantham Randy C $ 10,000.00 $ 186.24 Grebe Clay $ 5,580.00 $ 103.92 Green Violet (Deceased) $ 17,280.00 $ 321.82 Greene David $ 20,000.00 $ 372.48 Greensage Roy $ 18,000.00 $ 335.23 Griffin James $ 16,400.00 $ 305.43 Grimes Montie $ 10,000.00 $ 186.24 Gross Michael $ 10,000.00 $ 186.24 Guest Allan J $ 10,000.00 $ 186.24 Guest Gwyneth Eyre $ 1,000.00 $ 18.62 Hahn, Jr Robert L $ 8,200.00 $ 152.72 Hahn, SR Robert L $ 8,200.00 $ 152.72 Hairgrove Billy $ 8,200.00 $ 152.72 Hardcastle Jeff $ 10,000.00 $ 186.24 Harder Joseph Kyle $ 7,600.00 $ 141.54 Harder Larry $ 400.00 $ 7.45 Harder Larry J $ 14,000.00 $ 260.74 Harder Larry Kevin $ 8,400.00 $ 156.44 Hardwick Charles W (deceased) $ 44,000.00 $ 819.45 Hardy Mark $ 47,000.00 $ 875.33 Harrigan Frank $ 29,000.00 $ 540.10 Harrigan Shawn $ 10,000.00 $ 186.24 Harris Simon $ 5,580.00 $ 103.92 Harris, Jr. Alvin H. $ 10,000.00 $ 186.24 Harrison Acie $ 18,800.00 $ 350.13 Harrison Robert $ 25,000.00 $ 465.60 Harvey George D. $ 8,500.00 $ 158.30 Harvey George D. $ 20,000.00 $ 372.48 Heinold Justin $ 5,580.00 $ 103.92 Henderson Travis $ 11,750.00 $ 218.83

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Herrmann Edwin P. $ 18,800.00 $ 350.13 Hicks Dera (Deceased) $ 6,800.00 $ 126.64 Hicks Glenda Gail $ 8,200.00 $ 152.72 Hicks Mary E. $ 8,300.00 $ 154.58 Hicks Travis $ 8,200.00 $ 152.72 Hicks Travis B. $ 8,800.00 $ 163.89 Hightower Delbert F. $ 8,200.00 $ 152.72 Hillebrand Lorraine $ 25,000.00 $ 465.60 Hillebrand Timothy $ 25,000.00 $ 465.60 Hlavac Marjorie $ 44,000.00 $ 819.45 Hlavac Michael $ 10,000.00 $ 186.24 Hlavac Willie $ 12,000.00 $ 223.49 Holden Janeta G. $ 27,915.00 $ 519.89 Holland Ben D $ 6,400.00 $ 119.19 Holland Karman Koon $ 8,800.00 $ 163.89 Hosmer Mike $ 38,400.00 $ 715.16 Houston Samuel C $ 9,400.00 $ 175.07 Howell Carolyn $ 2,000.00 $ 37.25 Hubbard Alan $ 50,000.00 $ 931.20 Hubbard Judy $ 9,500.00 $ 176.93 Hubby John $ 18,000.00 $ 335.23 Hutton Kyle W $ 7,000.00 $ 130.37 Hutton William $ 16,000.00 $ 297.98 Ihrig John $ 5,000.00 $ 93.12 Ihrig Robert $ 10,000.00 $ 186.24 Ingle Neal $ 40,000.00 $ 744.96 Isaac Corny $ 10,000.00 $ 186.24 Isaac Laverne $ 10,000.00 $ 186.24 Ives, LLC Victor $ 5,480.00 $ 102.06 Jackson Ron $ 12,000.00 $ 223.49 Jackson Thomas $ 90,000.00 $ 1,676.16 Jacobs Pearl M. $ 9,400.00 $ 175.07 Jaeger Murray $ 190,000.00 $ 3,538.56 Jankowiak Brandon $ 12,300.00 $ 229.07 Jankowiak Henry L $ 24,600.00 $ 458.15 Jenkins Betty $ 20,000.00 $ 372.48 Johnson Robert (Bob) $ 9,400.00 $ 175.07 Johnston Judy $ 8,000.00 $ 148.99 Jones Dickie $ 2,889.12 $ 53.81 Jones Jake $ 8,800.00 $ 163.89 Jones Lauretha K $ 7,600.00 $ 141.54 Jones Michael $ 10,000.00 $ 186.24 Kadir Isuf $ 10,000.00 $ 186.24 Kanekoa David $ 9,400.00 $ 175.07 Kanekoa Frank $ 62,276.00 $ 1,159.83 Kanekoa Leilani $ 30,000.00 $ 558.72 Keener Ivian Glenn $ 33,300.50 $ 620.19 Keith Frances M $ 5,000.00 $ 93.12 Kerr Blair $ 15,000.00 $ 279.36 Kestler Tom W $ 76,000.00 $ 1,415.42 Kind Terry $ 4,000.00 $ 74.50

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Kirkpatrick Alan L. $ 8,800.00 $ 163.89 Knight Jerry $ 6,000.00 $ 111.74 Knight Todd $ 10,000.00 $ 186.24 Knight Troy $ 8,000.00 $ 148.99 Koeniguer Joel A. $ 5,585.00 $ 104.01 Kolb Robert $ 9,400.00 $ 175.07 Kolb Robert L. $ 8,200.00 $ 152.72 Koon Kris $ 2,800.00 $ 52.15 Korth Russell W $ 8,320.00 $ 154.95 Krutza Yvonne M. $ 9,400.00 $ 175.07 Kube Wilbert Ethelyn $ 6,000.00 $ 111.74 Lacey Joseph $ 19,000.00 $ 353.86 Laffoon/Nester Charles Kye/Jan $126,400.00 $ 2,354.07 Lancaster Cindy B $ 10,000.00 $ 186.24 Langstroth Kit T $ 41,000.00 $ 763.58 Leatherwood Thomas L $ 8,800.00 $ 163.89 Leatherwood Thomas L. $ 10,000.00 $ 186.24 Lehenbauer Mildred $ 5,580.00 $ 103.92 Lelo Albert $ 10,302.00 $ 191.86 Lewis Charles (Mick) $ 7,600.00 $ 141.54 Lien Rick $100,000.00 $ 1,862.40 Lindley Billy Dan $ 8,800.00 $ 163.89 Little Lavelle or E.A. $ 8,935.00 $ 166.41 Little Michael R. $ 15,000.00 $ 279.36 Loewen Erich E $ 17,625.00 $ 328.25 Long Anthony $ 20,500.00 $ 381.79 Long Tim $ 7,968.91 $ 148.41 Long Tim $ 16,000.00 $ 297.98 Love Sherwood $ 22,000.00 $ 409.73 MacNamee (Texas Sheet Metal) Paul $ 4,170.00 $ 77.66 Maddux Sarah K. $ 9,400.00 $ 175.07 Mann Bertha M. or Tony C. $ 22,330.00 $ 415.87 Marek Annastina $ 12,300.00 $ 229.07 Mark Janice Neville $ 2,000.00 $ 37.25 Martin Vanessa $ 8,200.00 $ 152.72 Mashburn Brian $ 3,000.00 $ 55.87 Mathews Edna Earle $ 8,800.00 $ 163.89 RcCauley Damon F. $ 10,000.00 $ 186.24 McClurg Barbara Weldon $ 39,450.00 $ 734.72 McCormick Ida LaJuan $ 7,300.00 $ 135.96 McCormick Ida LaJuan $ 15,000.00 $ 279.36 McCune Mary Kathryn $ 5,585.00 $ 104.01 McDonald Clarence Bonnie $ 15,200.00 $ 283.08 McLean Lance A $ 2,000.00 $ 37.25McLelland Billy M. $ 8,800.00 $ 163.89 McMenemy Matt $ 47,000.00 $ 875.33 Meadows Randy Dale $ 8,200.00 $ 152.72 Meekins Cecil $ 8,200.00 $ 152.72 Meier Cynthia $ 10,000.00 $ 186.24 Merritt Hilton $ 83,000.00 $ 1,545.79 Messenger Roger L $ 9,400.00 $ 175.07

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Messenger Roger L $ 25,000.00 $ 465.60 Middleton Charlotte $ 5,585.00 $ 104.01 Middleton Darrell (Franklin) Betty $ 20,000.00 $ 372.48 Miller D.M. "Mike" $ 9,000.00 $ 167.62 Miller Harrison L(Deceased) $ 8,400.00 $ 156.44 Miller Pat $ 7,725.00 $ 143.87 Miller Patrick Fritz $ 7,725.00 $ 143.87 Mills Novelle or Robert L.(Deceased) $ 5,585.00 $ 104.01 Minor Brenda $ 8,200.00 $ 152.72 Minor William $ 9,400.00 $ 175.07 Minor William $ 14,100.00 $ 262.60 Mondin Kenneth Gloria $ 5,830.00 $ 108.58 Moore Robert L. $ 8,800.00 $ 163.89 Moore Robert L. $ 9,400.00 $ 175.07 Morris Steven $ 156,000.00 $ 2,905.34 Mrvos Nenad $ 900.00 $ 16.76 Mullens Nicky $ 10,000.00 $ 186.24 Murski Andrew Albina(Deceased) $ 15,200.00 $ 283.08 Myers Donnie $ 31,100.00 $ 579.21 Nelson Barbara Donald $ 8,500.00 $ 158.30 Newlin Pat $ 14,400.00 $ 268.19 Nichols Kingsley Jaqueline $ 3,000.00 $ 55.87 Ohara Daryl $ 11,524.00 $ 214.62 Ohara Merlene $ 2,000.00 $ 37.25 Oltmans Janell (Deceased) $ 9,600.00 $ 178.79 Osborn Arleta $ 30,000.00 $ 558.72 Osborn Harvey N $ 10,000.00 $ 186.24 Paletta Frank J. Rose Mary $ 5,580.00 $ 103.92 Parr Lonnie $ 63,781.73 $ 1,187.87 Zearson-Swann Julie Ann $ 9,400.00 $ 175.07 Peil Ralph $ 108,000.00 $ 2,011.39 Pena Lucy $ 8,800.00 $ 163.89 Pentz Catharina (Tina) $ 10,000.00 $ 186.24 Peterson Louise $ 10,000.00 $ 186.24 Pettegrew Joel Hamilton $ 8,375.00 $ 155.98 Phillips BreAnn J. $ 10,000.00 $ 186.24 Polk Gordon $ 5,580.00 $ 103.92 Ponfick Allison C. Joan $ 5,580.00 $ 103.92 Porter Audrey $ 8,800.00 $ 163.89 Preston Ross JoAnna $ 4,000.00 $ 74.50 Priakos Bill $ 42,500.00 $ 791.52 Pruett Vernita $ 14,400.00 $ 268.19 Pruitt Albert Mary E. $ 96,035.00 $ 1,788.55 Pruitt Jim $ 25,000.00 $ 465.60 Pryor Don $ 10,000.00 $ 186.24 Pryor Don $ 26,320.00 $ 490.18 Punswick Ed $ 10,000.00 $ 186.24 Purdy Bill $ 30,000.00 $ 558.72 Quillin Jr Frank $ 9,200.00 $ 171.34 Raines Dennis Martha $ 10,000.00 $ 186.24 Ravanan Edna (deceased) or Goody N. Ruhl $ 5,580.00 $ 103.92

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Reed Patsy R $ 12,594.80 $ 234.57 Regier Bernhard R. $ 9,400.00 $ 175.07 Reichwein Robert $ 22,000.00 $ 409.73 Reynolds Cyndy $ 23,000.00 $ 428.35 Ridenour Donald H $ 9,700.00 $ 180.65 Roach Earnest D $ 7,400.00 $ 137.82 Robbins Duane Janice $ 8,800.00 $ 163.89 Roberts Mark David $ 3,000.00 $ 55.87 Roos Carolyn $ 68,000.00 $ 1,266.43 Rose Cynthia $ 8,200.00 $ 152.72 Rossi Lillian G. $ 5,830.00 $ 108.58 Ruhl Dorothy Wilburn (deceased) $ 11,165.00 $ 207.94 Ruhl Lloyd Ti/Goody N. $ 5,580.00 $ 103.92 Ruhl, Sr Lloyd $ 9,600.00 $ 178.79 Salehezadeh Jeff $ 34,000.00 $ 633.22 Sanford JC $ 113,500.00 $ 2,113.82 Sanford Stanley $ 4,000.00 $ 74.50 Sanford Steven Mary Ann $ 5,000.00 $ 93.12 Santanni Jill L $ 8,200.00 $ 152.72 Savage Arthur $ 40,000.00 $ 744.96 Schroeder Esther L $ 10,000.00 $ 186.24 Schroeder George $ 37,200.00 $ 692.81 Schroeder George E $ 8,200.00 $ 152.72 Schwenke Patrick $ 9,000.00 $ 167.62 Sensat Shirley $ 34,440.00 $ 641.41 Shelton James W. $ 17,600.00 $ 327.78 Shelton James W. $ 250,000.00 $ 4,655.99 Sherrod Jesse E. $ 11,165.00 $ 207.94 Sims (McKenzie) Jennifer $ 3,000.00 $ 55.87 Slaughter Arlene $ 8,200.00 $ 152.72 Soliz Debra L. $ 10,000.00 $ 186.24 Spratt April Dawn $ 4,000.00 $ 74.50 Stafford Donald R $ 109,800.00 $ 2,044.91 Stagg Allan $ 2,700.00 $ 50.28 Stanphill Herb $ 9,400.00 $ 175.07 Stehlin David $ 235,295.00 $ 4,382.13 Steinbis Martin $ 285,000.00 $ 5,307.83 Stepchinski Brian $ 8,800.00 $ 163.89 Stephens Nancy $ 8,800.00 $ 163.89 Stephens Sparky $ 9,100.00 $ 169.48 Stewart Wanye $ 3,500.00 $ 65.18 Stoner Dale D $ 8,800.00 $ 163.89 Stoops Brian $ 5,720.00 $ 106.53 Stoops Brian $ 10,560.00 $ 196.67 Storrs Hattie O $ 28,800.00 $ 536.37 Stout V.L. $ 5,830.00 $ 108.58 Stuart Harold $ 8,400.00 $ 156.44 Suffron Raymond $ 20,000.00 $ 372.48 Swartzendruber Naomi J. $ 8,200.00 $ 152.72 Swartzendruber Richard $ 4,000.00 $ 74.50 Swift Ted Lindsey Christine Rossi $ 27,915.00 $ 519.89 Distribution Last Name First Name Allowed Claims Amount Swift (Nicholson) Kelly Maie $ 13,422.00 $ 249.97 Synar David W. $ 10,000.00 $ 186.24 Tahere Malcolm $ 10,000.00 $ 186.24 Tanner Betty Ruth $ 5,200.00 $ 96.84 Tanner Joseph W $ 5,200.00 $ 96.84 Taylor Mike $ 92,020.00 $1,713.78 Teafatiller Bruce $ 9,400.00 $ 175.07 Thames Chris $ 15,000.00 $ 279.36 Thomas James H. $ 8,800.00 $ 163.89 Thomas James H. $ 10,000.00 $ 186.24 Thomas James H. $ 100,000.00 $1,862.40 Thompson Carlton E. $ 8,800.00 $ 163.89 Thompson Carlton E. $ 10,000.00 $ 186.24 Thompson Mary Louise $ 9,400.00 $ 175.07 Toussaint Stanley D $ 8200.00 $ 152.72 Truman Terry $ 3,150.00 $ 58.67 Trzan Hubert $ 3,000.00 $ 55.87 Tucker Ted $ 9,400.00 $ 175.07 Tucker Ted $ 10,000.00 $ 186.24 Tweedell John $ 5,200.00 $ 96.84 Tweedell John E $ 32,800.00 $ 610.87 Tyndell Cindy $ 10,000.00 $ 186.24 Umali Roman T $ 9,000.00 $ 167.62 Umali Jr Roman T $ 119,766.34 $2,230.53 Vanderploeg Fred A. $ 8,800.00 $ 163.89 Vaughan Sherman $ 3,820.00 $ 71.14 Vaughan Sherman $ 11,165.00 $ 207.94 Verret Jr Louis A $ 14,560.00 $ 271.17 Vincent Linda $ 16,400.00 $ 305.43 Waggoner Thomas $ 23,500.00 $ 437.66 Walker Oliver D $ 8,200.00 $ 152.72 Ward Margaret $ 5,580.00 $ 103.92 Wareham Andrew $ 20,000.00 $ 372.48 Welch William D. $ 12,300.00 $ 229.07 Wernette Fred A. $ 9,400.00 $ 175.07 White Billy D. $ 11,000.00 $ 204.86 White Lottie Hazel $ 2,000.00 $ 37.25 White, Jr Homer G $ 8,200.00 $ 152.72 Whitin (CTS Investments) Jay $ 5,580.00 $ 103.92 Wiatrek Clara Ben (Deceased) $ 5,580.00 $ 103.92 Wickliffe B. Wren/Amanda $ 5,580.00 $ 103.92 Wickliffe Benny W./Maudie $ 11,165.00 $ 207.94 Wickliffe Bruce W./Maudie $ 5,580.00 $ 103.92 Wickliffe Herman V. $ 5,580.00 $ 103.92 Williams Norris $ 9,000.00 $ 167.62 Williamson Margie $ 5,000.00 $ 93.12 Williamson Miles $ 1,900.00 $ 35.39 Willis Jim $ 9,400.00 $ 175.07 Willis Joan $ 5,580.00 $ 103.92 Willis Joan $ 16,750.00 $ 311.95 Willis Robert $ 11,165.00 $ 207.94

Funding Resources Investor Claims and Final Distribution

Distribution Last Name First Name Allowed Claims Amount Willis Robert T. $ 5,580.00 $ 103.92 Wilson Billie C $ 6,180.00 $ 115.10 Wilson Billie C Kari $ 9,200.00 $ 171.34 Wilson Billie C. $ 5,830.00 $ 108.58 Wilson Darrel E. $ 9,400.00 $ 175.07 Wilson Dean $ 5,580.00 $ 103.92 Wilson Howard $ 8,800.00 $ 163.89 Winford Kim $ 16,400.00 $ 305.43 Wisdom Larry W $ 8,800.00 $ 163.89 Worley Robert B $ 2,000.00 $ 37.25 Wuif James E. $ 9,400.00 $ 175.07 Wynn Jerry $ 8,200.00 $ 152.72 Yates Darin $ 11,165.00 $ 207.94 Zori Alfred Ray $ 5,830.00 $ 108.58 Zouzalik Darrell $ 9,200.00 $ 171.34 Zouzalik Mark $ 12,932.00 $ 240.85 Total $ 9,852,672.74 $ 183,496.22 Distribution Amount $ 183,496.22 Distribution % 1.8623975%