Aleritas Capital Corporation (fka ARTA)

[temp luvs amy]

BTW, tax benefits are highly overrated. A company needs to make a profit to utilize them. The insurace biz sucks right now, and they are probably collecting too many losses of their own to actually purchase more.

[temp luvs amy]

That's it.

First they attempted to abandon, then they discovered reasons not to. Hence they should be filing financials and setting aside in contemplation of future use of the benefits, even if current balances are zero.

The benefits are as described in those documents: Equity interests, tax loss, collections, and legal contingencies.

One specific suit declares that the losses of Brooke in the capital of Aleritas was impaired (see FTI consulting documents), but I don't know if the amended complaint was ever filed. The Kutak Rock decision may also affect us in the future. In other cases, where assets were recovered, our portion should have been set aside. The set aside funds are the funds which could be lost in other suits such as Patriot Risk.

I still can't imagine that Patriot would file suit if those funds are zero. OTOH, a win in the suit could gain them a tax loss benefit. Moreover, Patriot (and/or BASC) could gain a substantial tax benefit by an aquisition of ARTA through the court. Let the wheels turn.

[sidedraft]

Your analysis is greatly appreciated.

Doc #1088

Doc #1058-WithDrawn

[temp luvs amy]

Okay,

So control of Aleritas is only implied, not named in the header?

The "et al." refers to unnamed "non-debtor affiliates" and "debtor affiliates."

There is one more document which has relevence. They put forth a motion in 2009 to abandon control, but that motion was withdrawn. The reasoning for the withdrawal may provide a clue.
That would be found in 1088.

Maybe they didn't need to officially withdraw because Aleritas had ceased operation? That sounds good, but Aleritas should have had tails to collect for years. Maybe the tails were already gone?

The "BASC" documents clearly indicate that bonuses were supposed to flow through Aleritas. The bonuses would have been warranted on a "combined sales volume," and would not necessarily represent the interest of separated sales entities, ie. Aleritas was the correct final recipient, IMHO. (That might be a stretch) As I remember, other suits were specifically created to collect those bonuses with Aleritas as a (the) plaintiff. Aleritas would certainly be entitled to proceeds of any long term loans. The tail would also contain proceeds of certain asset recoveries and foreclosures. I can't imagine those are tied to other entities, Mr. Orr's personal guarantees notwithstanding.

It just doesn't make sense that they haven't filed financial condition documents on Aleritas unless control was abandoned or ceded. It makes even less sense because Aleritas and BASC seemed to be the cash cows of the whole debtor network.

It seems possible, but not likely that the tails had been tied up by December 2009, and that the money was already gone. Even if they are just "sitting on" the reserves, they are supposed to file a report every six months.

[sidedraft]

Doc #0620, and Doc #0700 say that the change was made to Chapter 7, and that the old trustee will continue in his role.

11. Given the fact that the Trustee will continue in his role, compliance with Fed. R.
Bankr. P. 1019(5) is an unnecessary requirement which will further exhaust remaining estate
assets. Accordingly, based upon the foregoing, it is hereby ORDERED, ADJUDGED AND
DECREED that the Motion is granted and that each of these jointly administered Chapter 11
proceedings are converted to Chapter 7 proceedings effective June 19, 2009, according to the
Motion.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Chapter 7 Trustee
is relieved from the requirements of Fed. R. Bankr. P. 1019(5).
IT IS SO ORDERED.

Doc#620

Doc#700

[temp luvs amy]

You might try to get documents #620 and #700 and see if Aleritas is noted as converted and jointly administered on 6/29/2009.

If it is, the financials of Aleritas should be included.

(Converted means: converted from Chap 11 to Chap 7)

I was under the impression that Aleritas was converted and joined as a subsidiary of Brooke, which would entitle us to rights as minority shareholders of a subsidiary, and would require that funds were set aside for us. I don't know what to think now.

Those two cases you pulled out are confusing unless "someone other than the trustee" acquired control of Aleritas. Is the trustee suing himself?

Does that generate more fees?

The trustee was in charge of Aleritas Chapt 11, if I remember correctly.

[temp luvs amy]

I suppose it all has significance to someone

I am only concerned with the minority shareholders of Aleritas.

It's a lot of reading. I'll have to download it, and get back to you.

[sidedraft]

I have a docket report here

But I really don't know what is of significance.

[temp luvs amy]

BTW, Judge Somers calendar showed some action on Friday. I was able to locate that without PACER.

[temp luvs amy]

It should be filed in lead case 08-22786, but the ones you found would indicate a rift.

That's scary. I can't even find those cases without my PACER login.

The way you list it, the Brooke Trustee is denying control of Aleritas, and is suing Aleritas on behalf of Brooke's estate.

It is understandable considering other documents I did find. About that time, the trustee had expressed an interest in recovering losses sustained by Brooke when Aleritas failed.

I could not find the suit against Fifth Third or FTI, and your find could be the ultimate case. If the Brooke trustee is not in control of Aleritas, then Fifth Third probably is. The preliminary claim was against FTI Consulting.

Since I am not a lawyer, this confuses me. I would have thought that the transfer of ARTA stock to Fifth Third would be reversed, and Brooke would maintain control. Since that does not appear to be correct, there might be no possible way of finding out the value. Aleritas is the defendant, not a BK entity. If they are not BK, and not controlled by a BK entity, there would be no "value" filings.

That sucks. OTOH, if they are being sued, there has to be money. We just don't know how much.

[sidedraft]

Nothing as you describe in Kansas BK court under Brooke.
These cases are under Aleritas:



There were 2 matching persons.
There were 2 matching cases.

Name Case No. Case Title Chapter / Lead BK case Date Filed Party Role Date Closed
Aleritas Capital Corp. (f/k/a Brooke Credit Corp.) (pty)
(1 case) 10-06244 Redmond, Brooke Trustee v. Aleritas Capital Corp. (f/k/a Brooke Credit Corp.) Lead BK: 08-22786 Brooke Corporation 10/27/10 Defendant N / A
Aleritas Capital Corporation formerly known as Brooke Credit Corporation (pty)
(1 case) 10-06210 Redmond, Brooke Trustee v. Aleritas Capital Corporation formerly known as Bro Lead BK: 08-22786 Brooke Corporation 10/25/10 Defendant N / A

Which one would hold the Form 26?

[temp luvs amy]

Have you been reading my posts lately?

It was clearly stated in one of those decisions that Aleritas was a "non-debtor" entity.

According to the "official rules;" one of these has to be on file for "entities which the estate holds a subtantial or controlling interest" in:

http://www.hib.uscourts.gov/forms/national/official/B26_PeriodicRptRegardingValue.pdf

SOMEBODY KNOWS the remaining tangible value. They just aren't publishing it. There are also some contingencies that need to be decided by the court.

As long as we don't lose the fraud cases, there will likely be a distribution, IMHO.

I lost my PACER login, and I will try to see if I can find it, now that I know what I am looking for: "Official Form 26" related to Aleritas. They have to file one every six months.

[temp luvs amy]

What happened to the Agents and Agencies?

http://www.ksb.uscourts.gov/images/ksb_pdfs/1156_exhibit_1b.pdf

These documents indicate that commissions were being paid through BASC, which was taken over by DZ Bank in the agreement filed 2/18/10.

Interesting set of documents if you have the time to skim them or read them. If the agents were paid, then there are fewer claims against the bankruptcy estate. It leaves more money to pay us.

[temp luvs amy]

Light reading

"WHEREAS, on or about November 21, 2008, Aleritas ceased operations and the Existing Lenders, then participants holding undivided participation interests in the Existing Lenders Debt and all collateral securing the Existing Lenders Debt, were assigned and assumed all rights, and acceded to all rights, remedies, benefits and security Aleritas held with respect to the Existing Lenders Debt and the Existing Loan Documents; "

Read more: http://www.faqs.org/sec-filings/091109/PATRIOT-RISK-MANAGEMENT-INC_S-1.A/c54053a6exv10w73.htm#ixzz1oGBaAqtK

Short version: Patriot was able to refinance their debt.

If I was guessing, that might indicate that such loans were made on valid financial assumptions, not fraud. It's all speculation, of course.

[temp luvs amy]

Every picture tells a story.

http://maps.google.com/maps?rlz=1T4ADFA_enUS451US451&gs_upl=0l0l0l10404lllllllllll0&um=1&ie=UTF-8&q=west+point+underwriters&fb=1&gl=us&hq=west+point+underwriters&cid=0,0,16971947754158078059&ei=0LpHT7jADeHYiQKAw9HbDQ&sa=X&oi=local_result&ct=image&ved=0CBwQ_BI

I wonder what these guys bought to put them underwater?

Maybe that big insurance agency complex in the background? Yeah, that new two story with all of the fancy architecture.

[temp luvs amy]

Is this another weak case?

https://ecf.ksd.uscourts.gov/cgi-bin/show_public_doc?2010cv2319-100

Brooke entities allegedly induced them to take a loan?

Yeah, I am sure homeowners would love to say they were induced to buy houses in a booming real estate market. That's why they screwed up and bought houses for twice what they were worth.

It was a market bubble. If you dance to the music, you pay the piper.

So now it's our fault that they don't anticipate the realities of fluctuating market valuation? What goes up must come down.

As I understand it, they purchased an insurance franchise business. Purchasing a business entails certain risks. If there weren't risks involved in purchasing a business, then everybody would own one.

Am I crazy to think these guys are just trying to cover up their own failures?

[temp luvs amy]

This ruling appears to affect Brooke claimants:

http://www.leagle.com/xmlResult.aspx?xmldoc=In%20BCO%2020120202842.xml&docbase=CSLWAR3-2007-CURR

The judge seems to be asking for a "negligence" claim against the underwriters of Brooke offerings to meet legal standards.

Just so you know, I am a trader, not a lawyer. Truly legal opinions are welcomed. I will also post the link on the Brooke board.

[temp luvs amy]

We appear to be getting closer.

I think I see a light at the end of the tunnel.

[sidedraft]

Pretty long way home, I've only owned for a little over three years.

[temp luvs amy]

Yeah, me too, and "our attorney," so to speak. He is actually the attorney and trustee for all of the Brooke entities. Interestingly enough, the first document I loaded stated clearly that Aleritas was a "non-debtor Brooke-related entity."

http://www.ksb.uscourts.gov/images/ksb_opinions/DLS_10-06241-90.pdf

The court apparently recognizes that Aleritas remained solvent, or they would likely have declared it a "debtor." I hope I am right.

They seem to be clarifying points of law for the bigger cases to come. I re-read the earlier decision, and its not as significant as I thought, but it tends to clarify the business relationship somewhat along the lines of what I said.

Aleritas bundled loans, and sold them. The success or failure of the loans was based on economic realities of the time period, similar to the same considerations as the lenders in the failing real estate market. We should have been bailed out by TARP loans and kept out of this mess. We are taking the long way home.

[sidedraft]

I like that judge already.

[temp luvs amy]

It looks like the court is becoming more active on the case(s). I would suppose the calendar has finally allowed the hearings to proceed.

I found two more decisions.

Here is another decision from December.


http://www.ksb.uscourts.gov/images/ksb_opinions/DLS_10-06164-53.pdf

The trustee is attempting to collect on accounts, and there are objections to the collections.

[temp luvs amy]

I could get my teeth fixed and buy a bag of groceries.

[sidedraft]

2¢/share would give me a very tiny profit.

[temp luvs amy]

It would be very nice if the attorneys recognized our hardship and declared a small liquidating dividend based on the ruling, no?

If they do ever distribute a substantial amount, I would like it in small unmarked bills, or periodic payments to reduce my tax liability.

[sidedraft]

Got it.

[temp luvs amy]

Just a Wild Assed Guess:

The ruling wieghs heavily on the entire portfolio of loans.

It seems to state that the acquirer of the debt is liable for the risk of their holding. ARTA is only liable for the portion of the debt which it retained. Much like the other hedge operations during the period. ARTA reduced its risk by selling the loans to others.

The ruling affects the entire portfolio of about a billion dollars. ARTA's unsold holdings in the portfolio remains a risk to us. We will share in the loss from any debt retained, which is substantially less risk than "all of it."

Is my grammar acceptable? I hope you understand what I mean.

Short version: It doesn't appear dead. There seems to be a pulse.

[temp luvs amy]

Hopefully enough to pay the legal fees.

Sorry, I don't, and couldn't resist the facetious response.

[temp luvs amy]

The ARTAX symbol is pretty old.

I don't know how long "Artillium" has been quoted as ARTA on the LSE.

AIM uses "codes" not "ticker symbols."

http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=GB00B1L7NQ30GBGBXASQ1

10 pounds!

[sidedraft]

Do you know how much money that ruling affects?

[temp luvs amy]

Well lookie here......

We have a trustee, and a lawyer.


http://www.ksb.uscourts.gov/images/ksb_opinions/DLS_10-06241-90.pdf


And the GAB motion was denied.

[temp luvs amy]

Hopefully you fatfingered your order and bought ARTAX when we were buying ARTA.

ARTAX is the symbol for the American Century Livestrong Mutual fund. It isn't an ETF, so it's highly unlikely that a fatfinger would have worked.

What's going on?

The BK trustee is still collecting the funds and sorting out the liabilities.

Legally, they will have to pay all of the creditors, and if there are a few pennies left over, we should get them. According to my research, they will have to settle or win some lawsuits.

The size of the lawsuits indicate "dimes" not pennies at stake, IMHO. I hope we can win them. The government has already prosecuted the management, but the government settlement included no admission of wrongdoing. Any suits against the corporation will have to prove "material" wrongdoing. Any idiot can tell that the economic bubble burst in 2008, and very little wrongdoing was required to burst the bubble.

[sidedraft]

They just now got around to reusing the ARTA symbol.

http://www.sec.gov/litigation/admin/2009/34-60580.pdf

[carnelsonG]

since long time ago!

[sidedraft]

It looks like the symbol ARTA is being reused.

[raspoetin]

any idea what happened
and why is the quote artax and 7 dollars lol
i am rich in that case haha

[temp luvs amy]

Oh, darn. We are being sued again!

http://dockets.justia.com/docket/kansas/ksdce/2:2011cv02494/82157/

Filed August 30, 2011.

Now why would all of these people want to sue if we don't have any money?

What a waste of time and a burden to the court system.

[temp luvs amy]

And then there is this:

http://newsroom-magazine.com/tag/aleritas-capital/

The "disgorgement" represents almost a penny a share, if paid to shareholders.

[temp luvs amy]

I am not finding any new lawsuits, so I guess that is a positive.

To repeat:

My WAG is October 2012 before it is finalized.

Anybody else want to make a guess?

Yawn.

[temp luvs amy]

Summary judgement for Turney Jr. case.

http://docs.justia.com/cases/federal/district-courts/kansas/ksdce/2:2009cv02533/72929/160/

Apparently chasing the money. Seemingly still paying on the loans.

Are the loans are getting paid through Mellon? Is DZ is collecting their share? Are agents are receiving commissions through the BK court?

It would appear so.

[temp luvs amy]

The last time I looked at the filings, the "bar claims date" hadn't even been set in the Chapt 7 case of Brooke. The wheels of justice move slow, and the BK courts even slower. Since foreclosures seem to be involved, it could be a very long wait, and then there are the lawsuits. All of this stuff has to work out. My WAG is October 2012, but it could be longer than that, and it could be never. It would be a pleasant surprise to see something sooner.

[Billy P]

I am getting tired of looking that the ARTA# symbol on my account. Hope something happens

[temp luvs amy]

And finally, Patriot could (hypothetically) petition the court to become a debtor in possession, revive the company, and we could end up being shareholders of Patriot, in a perfect world. (and IMHO)

I would think the "tail" on the actual debts might take a long time to play out, and the courts might be amicable to such agreements to wrap it up.

[temp luvs amy]

The summary judgement based on failure to appear is not a binding judgement, according to my reading. It would seem that the claim is valid and enforceable in the BK based solely on its merit. It is possible that the trustee was not interested in defending the case, knowing that is was a valid claim, and that any funds or portion thereof would need to be issued through the BK.

I have not checked PACER for status of outstanding cases. The Patriot Risk case is clearly the most singificant, as their SEC filing indicated that they were a debtor. If they win, it would significantly reduce any payouts to all claimants in the BK. If they lose, their debt would be collectible. If the fraud claim is defaulted due to failure to appear, the argument would likely proceed to the BK court, to further validate any claims which Patriot might have. Again, it appears that a summary judgement based on failure to appear is not strictly enforceable. The SEC S-1 filing of Patriot could be considered evidence against them, but if nobody appears in the other court to argue it, it will probably be decided by the BK judge.

All IMHO

It won't be over until it is over.

[temp luvs amy]

Another good link to check:

http://dockets.justia.com/search?q=Aleritas+Capital+Corporation

The above link shows the cases filed to date. If you see the gavel, a judgement has been issued, and can be retrieved without PACER access.

I just found this older judgement.

http://docs.justia.com/cases/federal/district-courts/oklahoma/okwdce/5:2008cv01083/70994/14/

These guys filed early, and had a legal claim to resell a participation. A summary judgement was issued; apparently because of failure to appear. The judgement will be settled as one claim against Aleritas in the BK court. It looks like a good claim, as opposed to many of those which claim fraud, IMHO.

[temp luvs amy]

This is probably a good link to check from time to time:

http://www.google.com/search?hl=en&q=aleritas+capital+brooke+credit+court+ruling&aq=f&aqi=&aql=&oq=

It is a pre-programmed google search.

[cugino]

That sounds promising...

[temp luvs amy]

The voting machine is closed. Waiting for the cash register to ring.

[whalecatcher]

what`s going on?

[temp luvs amy]

Reading between the lines......

Mellon applied for legal fees.......

The only Brooke entity that Mellon would have been dealing with would be Aleritas.... They couldn't very well be seeking moneys out of other entities in the Brooke Empire.....

I would think they might be asking for large amounts of money.....

Wouldn't you?


THE MOTION WAS DENIED!