Last night xrayviscion posted part of the transcript from the original contempt hearing. The transcript of the judge's comments following the receiver's remarks are very interesting, at least to me, as he addresses many of the facts, as he sees it, about RA et al. Also, he addresses issues that people have been asking him to look into in this case in emails, talking about why he can't do it, as well as why the defendants probably never raised the issues themselves.
MS. MOSCOWITZ: There is one thing I wanted to bring up, your Honor. I am in negotiations, some more completed than others, on a couple of the other subsidiaries. And, of course, nobody wants to assume the huge liabilities, so people have made proposals to purchase the assets such as they are, like a list of customers, a domain name, and I have made provision, pending your Honor's approval, to sell some of those subsidiaries, to sell just the assets. To me I know that means there is lot of creditors that are going to be left in the lurch. I wanted to present that to your Honor, because those creditors are going to be left in the lurch, this way we are leaving some assets to some of the Universal Express employees.
THE COURT: I understand that will be done in due course. I did want to say just two things about the receiver's report, on the public record. One is that the receiver has documented that at the time she took control of this company, the bank accounts of Universal Express contained less than $100,000, which was inadequate to meet even the next week's payroll. It also appeared from the records of the company, as reported by the receiver, that there were 39 billion shares of stock in Universal Express outstanding. And that, apparently, the only income that had been received of any substance was from the sale of stock. And the most significant outflow, other than for advertising was, as far as appears, to Mr. Altomare. Those are, so far as the receiver has reported them, the financial facts about universal Express.
The other fact about the receiver's report that was of some concern to me, and it became a basis of a motion by Mr. Sandhu, was that the receiver had received various threatening communications from individuals claiming to be shareholders of Universal Express.
I can certainly understand why shareholders would be upset, given that all of this money has poured into the company, and the company has never showed any profit. Never, as far as appears, given anything back to anybody but Mr. Altomare. Why they should be upset at the receiver, it seems to me a little bit mysterious, to the extent that there is no money there, after these investments were made. That's not the fault of the SEC or the receiver or the Court. That's got to do with how the money was handled by Universal Express and its officers. But I am concerned at any threat made to officers of the Court acting at the Court's direction. And those communications have been turned over to the United States Marshal Service for whatever investigation they think is appropriate. It is also worth saying in that regard that I have received a fair number of communications from people who purport to be shareholders of Universal Express, many of them are strong supporters of Mr. Altomare and believe that he has been treated unjustly in these proceedings. I don't know, of course, I just get the mail order, in this case the electronic mail, I don't know who they are really from or just what they are really thinking. It's just what has been conveyed to me. Some of them are from detractors of Mr. Altomare, who urge a stronger action by the Court. I just want to make a couple of things clear. First, everything that I have received personally has been what I regard as perfectly appropriate expressions of opinion by the people expressing the opinion. As I said before, it is a free country, people are entitled to their opinions, they are entitled to express their opinions, they are entitled to communicate those opinions to public officials, including Judges. None of those communications were things that I regarded as threatening or inappropriate, or violent or nasty, or anything. They were people expressing what they thought. Quite different from the communications that were attached to the receiver's report.
However, I think it is important to say on the record, both with respect to the parties and with respect to members of the public, that a Court, unlike other public bodies, unlike Congressmen or politicians, is not in a position to respond to or to take action based on what are, in effect, letters to the editor. I am not influenced, I can't be influenced. My oath of office prohibits me from being influenced by what the general public thinks. I can't take action on accusations or complaints or positions that are taken by members of the general public, and not taken by parties in this litigation. To the extent that Mr. Altomare, or any other party to the case, has complaints about the rulings of the Court, or has positions to take with respect to this litigation, they are here, they are represented, they are entitled to make whatever arguments they want to make to the Court. If they don't make an argument, as far as the Court is concerned, the fact that some member of the public thinks they should make that argument, or the fact that some member of the public believes there is some legal theory that the Court should take action on, I am sorry, but that's just not my business. I will not be influenced by such communications, m not allowed to be influenced by such communications. However, to the extent that the parties to the case do not take certain positions, I should think that a reasonable member of the public would draw an inference from that as to the merit of that position. And if there are conflicts of interest on the part of any party to the case, well, all of these litigants have very experienced, very sophisticated lawyers. And if that's a point they want to make, or something they want to bring to the Court's attention, they are entitled to do it, if they don't do it, I don't have anything to act upon. And members of the public who maybe think I should, might want to reconsider whether their information is accurate, if the parties to the case don't pursue such issues. I think it speaks volumes with respect to what has taken place today, that various defendants, including Mr. Altomare, had the opportunity to present any testimony or any argument that they wanted to make with respect to the SEC's showing, or with respect to the receiver's report, or anything else that's in the record of the court. And the record is what it is as to the positions that were taken here today.
Now, I think the only person that leaves me to have concerns about is Mr. Gunderson. And Mr. Garvey have, I think, maybe the -- we have a date for further proceedings with respect to Mr. Altomare, maybe we should put Mr. Gunderson's case over to the same date.
MR. GARVEY: Yes.
THE COURT: And that will give you the opportunity to speak to your client and assess his situation, and decide whether any applications are to be made on his behalf, or how he should respond to the August 30 order. Ms. Hughes, am I right that, roughly speaking, Mr. Gunderson stands in the same position today, vis-à-vis Universal Express, as Mr. Altomare? That is to say, that the receiver, having taken over, he is no longer affiliated with Universal Express -- maybe something needs to happen, I don't know whether the receiver has fired him or whether he has resigned, Gunderson.
MR. GARVEY: He is no longer working for the company.
THE COURT: Once again, I think, Mr. Garvey, you will assess where you think things stand. I think it would be helpful for all concerned, for Mr. Gunderson not to wait until the 11th hour of the next deadline to discuss with the SEC what, if any, showing is going to be made of compliance, or objection to the Court's order, or whatever else is going to happen. So that maybe we can – we will be in a better position to resolve that situation one way or the other in January, rather than to have that get put over for 60 days because it is a last-minute development with respect to Mr. Gunderson. But I think that matter will also be put over till January 11. Is there anything else that we need to do here today?
MR. TIFFORD: Just a minor cleanup, your Honor, three points. One, may I look forward to your Honor's order formally allowing my withdrawal from the case?
THE COURT: With respect to Mr. Gunderson?
MR. TIFFORD: Yes, sir.
THE COURT: Right. Sure. If you want a written order I am happy to --
MR. GARVEY: I have paperwork here today, if you will so order it, that will be fine.
THE COURT: If you got an order, I can sign it.
MR. TIFFORD: Yes, sir. The second point I must mention, the subject of flight risk, both Mr. and Mrs. Altomare's faith kind of preclude their sojourning to Dubai for the remainder of their lives, or anything in which they would have anything but a very limited visitor's visa, if ever. In my subtlety is a sufficient message for all concerned. Second, Mrs. Altomare, I believe, has shown remarkable courage and support in agreeing to abandon property right under the Florida law. She should be commended not questioned. Third, as far as the money is concerned, the figures announced as being fixed were fixed, they were not a proposal. I am going to deliver the $30,000 check as ordered by the Court.
THE COURT: I did assume that, Mr. Tifford, that that was something that was going to happen. And I also, maybe the word proposal was ill-chosen, I take it, I assume the good faith of you and Mr. Altomare with respect to marketing the apartment and everything else. Why i referred to it as a proposal is that the most tangible parts of it, the biggest numbers that were mentioned in your discussion are things that are contingent by their nature. I suggested some possibilities as ways of making them less contingent, but that's really up to the parties to discuss. We will find out in due course what happens in that regard. Similarly, with respect to the flight issue, certainly, as I said, have no basis at this point for believing that assets are fleeing abroad or people are fleeing abroad, or anything like that. Ms. Hughes mentioned that possibility. It is entirely fair for you to respond and refute that. But one way or the other, it goes over my head, it is until and unless. And this is one of the things that may or may not show up in January. Uuntil and unless I have further information suggesting that there is -- there are assets disappearing, or there are other assets that aren't being attached, but they should be, or that there has been some falsehood or some concealment, it is what it is. And we will find out more by January as to whether, as I said, Mr. Altomare is in a position to demonstrate that he has, in good faith, done his best to comply, or whether the SEC is in a position to demonstrate that he is deficient in some way, or the Court should take some action, or whether, we don't even have to hear about it because everyone is satisfied by that point. So I appreciate why you say what you say. I think you have every right to say it. But I just want to assure you, it is not, at some level, necessary. okay. Thank you all.
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OCR Transcript 10-12-2007
