On December 10, 2010, Thomas Seaman, the Court Appointed Receiver published his 17th and most recent report as to the status of asset gathering. The outlook is less then encouraging for Medical Capital note holders. To date the receiver has recovered approximately $120 million in assets (through November 30,2010) most of which were obtained shortly after a restraining order was issued and the company was placed in receivership.
Given that Medical Capital and its related entities raised some $2.2 billion from investors and over $1 billion in principal is still owed, it is clear there will be little money left for investors after attorney and accounting fees are paid. The report, confirms the allegations brought in the original SEC complaint: much of the receivables financed by the note offering proceeds were overvalued, no longer exist or may not have ever existed. Also, much of the funds that were to be used for financing the medical receivable were instead diverted to medical capital in in the form of administrative fees…in violation of the terms of the offering memorandums. All receivership filings may be found here.
The attorneys at Colling Gilbert Wright & Carter are currently investigating and litigating FINRA arbitration claims against broker dealers seeking compensation for investors for failure to adequately investigate Medical Capital and the note offerings. If you are a Medical Capital note holder, please contact our office for a free case evaluation. Thank you.