07/01/2008 336 STATUS REPORT. Doc 336 extract - PART 2
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The SEC learned that the Altomares had sold jewelry for a substantial amount of cash to a secondhand jewelry company in West Palm Beach called The Estate Department (“TED”) in September 2007, shortly after the receivership was instituted. The SEC served a writ of execution on TED and asked the Receiver to retrieve the jewelry that the Altomares had sold to TED. At the request of the SEC, the Receiver took possession of the jewelry and put it in a safe deposit box. It has been confirmed that much of this jewelry was the jewelry purchased at Les Bijoux with funds sent directly from the Company. TED is seeking the return of the jewelry.
The Receiver was present, along with security, for an appraisal of the jewelry which was conducted by an appraiser hired by The Estate Department. The Receiver’s counsel also participated in the deposition of one of the owners of Les Bijoux, the company which had sold much of the contested jewelry to the Altomares.
Litigation regarding ownership of the jewelry is still pending before the Court.
Other attempts to locate Company assets
The Receiver issued subpoenas to entities which Universal paid funds to and credit card companies in an effort to determine if any monies could be recouped from those companies, without success. The Receiver subpoenaed all companies to whom fees were paid for private jet flights to determine if any funds were on deposit. The Receiver also determined that $100,000 had been sent to Bear Stearns. Investigation revealed that those funds, which apparently were to be used in an acquisition which did not take place, were returned to the Company.
Creditors
The total of accounts payable by Universal Express as of September 7, 2007, the start of the Receivership, as noted on Exhibit C, is $11,607,418.14.[2] This list was compiled from Company records, bills received by the Receiver, creditor communications, and lawsuit pleadings. The Receiver has received numerous calls, letters and e-mails from creditors of the Company.
The amounts owed as reflected on Exhibit C are in addition to the $4,474,010.71 paid out of the Company pursuant to the bank records for the period January 1, 2007 to August 31, 2007. These figures are substantiated by the Company’s SEC filings, which reflect an operating loss for the nine months ended March 31, 2007 of $21,055,591.[3] During that period, the Company earned revenues of $2,687,262 with a cost of goods sold of 2,108,685 and incurred operating expenses of $21,634,538.
The Receiver has sought to verify the largest creditor claims. As an example, the Receiver questioned the claim of Sterling Mets, LLP for $1,224,754.00. Counsel for Sterling, which owns the Mets baseball team, showed the Receiver that this claim was for advertising and sponsorship services already provided. This is true also of the claim of Team Rensi ($1,900,000), Major League Soccer ($1,500,000), Madison Square Garden ($450,000), WCBS ($238,950), and others. Numerous small creditors have also been in communication with the Receiver. The Receiver also returned a painting of a race car which had been commissioned by Altomare, but which had never been paid for, to the artist.
The Receiver has also settled or allowed judgment to be entered in a number of commercial cases where the Receiver determined that the Company’s position was without merit. There was a disturbing pattern of suing small advertising companies to whom money was owed, claiming that their services were unsatisfactory, and then settling for less than what was due.
Employees of the Company are owed three weeks compensation. The total due and owing to employees for payroll and other reimbursements is $205,662.59.
[2] This sum does not reflect any long term debt such as the loans to the Altomares of $936,000 which are listed on the Company’s SEC filings or the SEC judgment. This is simply expenses of running the company that had been incurred but not paid for when the Receivership began.
[3] Operating losses for 2005 were $8,3315,294 and for 2006 were $12,553,006, as reflected in SEC filings of the Company. |
