ATM LEASEBACK SCHEMES-- any insight?

[grimreaper]

Report due any day now.

[webhick]

We wait with bated breath.

[Tednewsom]

Like the cat who ate cheese and hung out by the mouse hole.

Oh. Sorry. That's "baited."

[The Observer]

Still no report on the sentencing?

[webhick]

Continued to July 20th. Ugh.

[webhick]

There's been other activity on the receivership, although not another report. Mostly a bill and a clawback proposal.

They're going back seven years, folks. I won't post more than that tonight since I would just be repeating the blog anyway and it's getting late.

[grimreaper]

I saw the document:

PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION’S NONOPPOSITION
TO RECEIVER’S
MOTION FOR AUTHORITY TO
PURSUE CLAWBACK CLAIMS AND
APPROVAL OF PROPOSED
PROCEDURES; RECEIVER’S FIRST
INTERIM FEE APPLICATION FOR
PAYMENT OF FEES AND
REIMBURSEMENT OF EXPENSES;
AND ALLEN MATKINS LECK
GAMBLE MALLORY & NATSIS
LLP’S FIRST INTERIM FEE
APPLICATION FOR PAYMENT OF
FEES AND REIMBURSEMENT OF
EXPENSE
Date: April 20, 2015

No mention of *7 Years*. Where did you see that?

[webhick]

I saw the document:

PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION’S NONOPPOSITION
TO RECEIVER’S
MOTION FOR AUTHORITY TO
PURSUE CLAWBACK CLAIMS AND
APPROVAL OF PROPOSED
PROCEDURES; RECEIVER’S FIRST
INTERIM FEE APPLICATION FOR
PAYMENT OF FEES AND
REIMBURSEMENT OF EXPENSES;
AND ALLEN MATKINS LECK
GAMBLE MALLORY & NATSIS
LLP’S FIRST INTERIM FEE
APPLICATION FOR PAYMENT OF
FEES AND REIMBURSEMENT OF
EXPENSE
Date: April 20, 2015

No mention of *7 Years*. Where did you see that?

That document is just the SEC saying that they're cool with what the receiver's doing. Try "RECEIVER’S NOTICE OF MOTION AND MOTION FOR AUTHORITY TO PURSUE CLAWBACK CLAIMS
AND APPROVAL OF PROPOSED PROCEDURES".

It appears on Page 7, line 18 and 24; page 8, line 15; page 11, line 10; discusses it further on page 15, line 5; and then appears again in the example settlement agreement that they're going to send to investors, which starts on page 18.

[webhick]

For those reading here and not the blog, the receiver is going to give thirty lucky winners the chance to settle for 70% of the profits (if paid up-front) or 75% on a one-year payment plan. Who are the lucky winners? The first thirty people to respond. If you're not quick enough, you'll have an opportunity to settle for 80% of the profits. But you'll only have sixty days to do so. After that, litigation starts.

Also, NASI never "sold" any of the 238 ATMs they owned to investors - so it wasn't even a matter of multiple investors "owning" one real ATM under NASI's name.

Receiver's third report due in a few weeks. Hopefully he's in a position to divulge more juicy details.

[grimreaper]

" the receiver is going to give thirty lucky winners the chance to settle for 70% of the profits (if paid up-front)"

That was a bit confusing, since my first take was that the *winners* would settle for 70% of their profits. Of course, they mean they will get a 30% DISCOUNT if lucky. All the rest get 20% discount >>>IF they settle within 60days of notice. Just about what I expected.

[Tednewsom]

I read it, and It looked more to me like they were going after thirty of the highest-grossing net winners, not putting on a garage sale. And that they've already identified those thirty people from the forensic accounting they've done so far.

That makes a lot more sense than creating some sort of race to see who can get to the receiver's office first. The goal of the receiver is to recover as much illegally-gained money as possible, as soon as possible.

C. Business Judgment
As discussed above, the ultimate goal is to maximize the net recovery to the
receivership estate. The Receiver will use his business judgment at all times in
pursuing Clawback Claims and remain focused on the ultimate goal. This may
include seeking exceptions to the procedures described above in rare circumstances
where such exceptions are warranted.

[grimreaper]

True, my take is that the *30* threshold is simply the *stick* here with the 30% off as the carrot.
I think they'll probably go BEYOND the magic 30 if they get a significant initial response...then drop down to the 20% when they see the first response waning .

[The Observer]

It' still a race since there is a limit on who can get the first 30 spots at the most beneficial settlement. I agree that the receiver sent out letters to the fattest cats in the pot, but I am sure he had to include more than 30 names simply because experience would indicate that some of these people will either not cooperate or are unable to pay the money back.

Including the sales people in this initial push are probably not the best targets go after. They only averaged $85,000 over the 7 years in commissions and that is probably money that they lived on and spent. In all likelihood most of these people are not going to be able to take advantage of the settlement terms, even if they wanted to.

[Tednewsom]

Observer-- most, and probably all of the full- or part-time salespeople are also "investors."

Given that still-unexplained discrepancy between the "$12,000" contracts and the identical "$19,500" contracts, I expect a healthy chunk of the difference went to the salesperson. And to further complicate matters, the salespeople were invariably so besotted with this miraculous can't-lose deal that they'd plow their commissions back into more lovely ATMs for themselves.

[notorial dissent]

I really do think this is a case of not counting chickens until the actual ledger entries become available. I don't think it is going to be all that rosy personally. It is also one thing to identify the people you think were the big winners, and another thing entirely to get anything back from them. They may look like big winners on paper and not have scratch left.

[grimreaper]

I really do think this is a case of not counting chickens until the actual ledger entries become available. I don't think it is going to be all that rosy personally. It is also one thing to identify the people you think were the big winners, and another thing entirely to get anything back from them. They may look like big winners on paper and not have scratch left.

Well, we know all winners will get a demand letter. How they react is another matter. Do you really think the TOP net winners don't have *scratch left*??? Will they stone wall? Stay tuned. There's over $100 M on the table.

[notorial dissent]

A lot is going to depend on what they did with the money they got, and if they reinvested back in to NASI, then it is probably gone, or, if they were as perspicacious with their other investments as they were with NASI, considering what the economy has done the last couple of years, it and a great deal more could well be ALL gone!. It still comes down to saying someone was a "net winner" and them still having the money are two entirely different things. Do I think the ones on the list who still have money will stone wall, in what universe do you live in that you would think they wouldn't? I expect the exact answer will be speak to my lawyer. The end result will be if they have the money to begin with, and if a civil action will actually be cost effective. What it boils down to is that every hour of court time requires X number of hours of back office legal time and court expenses, which will eat egregiously in to whatever they hope to recover. So cost benefit analysis really pays a big part in determinations here. The other factor is that while there may be a $100M figure on the table, the question comes down to how move of that is real and how much of it is wishful thinking. I think I'd wait until I see an actual accounting before I made any further predictions.

[The Observer]

It still comes down to saying someone was a "net winner" and them still having the money are two entirely different things

What nd said. Speculating about "$100 million on the table" is entirely pointless, if you can't come up with $100 million when the markers are called in. As nd points quite correctly, a number of these people either plowed their earnings back into NASI, moved the money elsewhere or blew it in.

I expect the exact answer will be speak to my lawyer.

Bingo. if you can spend $100K in lawyer fees to stop someone from trying to collect $1 million, you are going to vote with your pocket book. It's one thing for the received to say that a new winner needs to pay up, its quite another to atcually spend money trying to collect it.

I think I'd wait until I see an actual accounting before I made any further predictions.

I couldn't agree more if you had said it a hundred times before - and I bet you have. But trying to get those with their heads in the clouds to agree means you might have to say it a million times.

[The Observer]

Observer-- most, and probably all of the full- or part-time salespeople are also "investors."

Given that still-unexplained discrepancy between the "$12,000" contracts and the identical "$19,500" contracts, I expect a healthy chunk of the difference went to the salesperson. And to further complicate matters, the salespeople were invariably so besotted with this miraculous can't-lose deal that they'd plow their commissions back into more lovely ATMs for themselves.

I don't have any reason to disagree with you on those points. I just think that none of the salespeople are going to be in the Top Thirty Netwinner's Circle.

[notorial dissent]

Observer-- most, and probably all of the full- or part-time salespeople are also "investors."

Given that still-unexplained discrepancy between the "$12,000" contracts and the identical "$19,500" contracts, I expect a healthy chunk of the difference went to the salesperson. And to further complicate matters, the salespeople were invariably so besotted with this miraculous can't-lose deal that they'd plow their commissions back into more lovely ATMs for themselves.

I agree that could the price discrepancy explanation you posit could be a possibility, although I seriously doubt that the "boys" were paying a $5k premium to their salesforce. They just somehow strike me as being too cheap for that. Everything they did was cheap and pinch penny, so I have a hard time with that one. Although, assuming that is a possibility, then the other consideration is that the salespeople were living on that money, and that it is long gone in to living expenses etc, and therefore non-recoverable. I have to go with Observer on this one and say that I doubt that any of the sales people will make the list, perhaps even two or three times removed.