Pursuant to a motion listing all effected claimants and filed by the Trustee on June 11, 2019 and an order entered by the Bankruptcy Court on June 27, 2019, all creditor distribution checks not timely negotiated by claimants prior to the 90-day deadline have been placed into the Registry of the Court.
To process an application for such unclaimed funds, affected claimants are directed to the Court’s website at: https://www.txwb.uscourts.gov/unclaimed-funds. [Note: The Trustee has no authority and plays no role in the release of unclaimed funds from the Registry of the Court.]
Final distribution checks to allowed claimants with a valid current mailing addresses were mailed on January 30.
The Order Approving Distribution to General Unsecured Creditors and Disposition of Unclaimed Funds sets all approved claim amount, but unfortunately, there was not nearly enough money recovered to pay claims in full. Instead, all approved claimants were paid the same percentage of their allowed claim. Page 5, paragraph of the 13 of the Motion by Trustee for Order Approving Distributions to General unsecured Creditors and Disposition of Unclaimed Funds disclosed that “Expected pro rata distributions are 2.5-3.5 cents per dollar of Allowed General Unsecured Claims to holders of such claims.”
This low recovery percentage is because, over a period of months and years preceding the Chapter 11 filing on July 20, 2015, BDI did not retain assets sufficient to cover BDI’s obligations to its customers. Pursuant to the Disclosure Statement approved by the Bankruptcy Court, at the time of the bankruptcy filing, BDI’s assets had dwindled to less than $1 million, and total obligations were approximately $25 million. Related to that activity, on January 18, 2018, the United States Department of Justice, through the United States Attorney’s Office, indicted Charles McAllister, BDI’s founder and largest shareholder, (“McAllister Indictment”) on charges of wire fraud, money laundering, and engaging in monetary transactions in criminally derived property. The indictment demands more than $16 million in damages. This criminal case is separate and distinct from the BDI bankruptcy proceedings and the Trustee has no control or visibility regarding its status.
On December 13, 2018, the Court entered an Order Approving Distribution to General Unsecured Creditors and Disposition of Unclaimed Funds. The Receiver anticipates all approved creditors distributions will be issued before January 31, 2019.
On November 8, 2018, the Trustee filed his Motion for Order Approving Distributions to General Unsecured Creditors and Disposition of Unclaimed Funds and the related Proposed Order.
A hearing will be held on this Motion on December 12, 2018 at 1:30 p.m. local Austin time before the Honorable Tony M. Davis, United States Bankruptcy Judge, at the Homer J. Thornberry Federal Judicial Bldg., 903 San Jacinto Blvd., Courtroom No. 1, 3rd Floor, Austin, Texas. If no timely response is filed with the Clerk of the Court by December 5, 2018, the relief requested herein may be granted without a hearing being held.
If the Trustee’s motion is approved on December 12, 2018, it is anticipated that final distribution payments, as provided in the order entered by the Court, will be issued before December 31, 2018.