Letter from Class Counsel to Net Winner Class Members September 2015
On September 14, 2015, Judge Graham C. Mullen appointed me to serve as class counsel for all persons and entities who were Net Winners of more than $1,000 in the ZeekRewards program. A copy of the Court’s order can be accessed here.
The Receiver, Kenneth D. Bell, has filed claims against the Net Winners for (1) fraudulent transfer of Rex Venture Group funds in violation of the North Carolina Fraudulent Transfer Act; (2) common law fraudulent transfer; and (3) constructive trust. On February 10, 2015, the Court certified the class. (See Order Granting Motion for Class Certification here).
The class issues before the Court relate to the alleged liability of the Net Winners and the potential obligation to return money the Net Winners received in the ZeekRewards program. In appointing class counsel, the Court noted:
The common questions related to the Net Winner Class are “whether ZeekRewards operated as a Ponzi and/or pyramid scheme and whether net winnings received by the Defendants should be returned to the Receiver.” The Court has further held that the details of each class member’s participation in ZeekRewards do not need to be addressed in answering these common and controlling questions and that the final amount of each Net Winner Class member’s net winnings and any Judgment against them will be set later in the proceedings after the liability of the class, if any, has been established.
In other words, class counsel will represent the net winner class in connection with the Receiver’s pending legal claims against the net winners. However, class counsel has not been appointed to address the circumstances surrounding the specific funds that any net winner may have received as a result of his or her participation in the ZeekRewards program.
The Court previously authorized the engagement of a forensic accounting firm (Berkeley Research Group) to review a report prepared by the Receiver’s accountant, which concluded that the ZeekRewards program operated as a ponzi scheme. In appointing class counsel, the Court has directed BRG to work with class counsel in examining the conclusions made by the Receiver’s expert, and further ordered to Receiver to pay the expenses associated the work performed by BRG.
Further, the Court has instructed me to communicate the following information to each the Net Winners:
In the event that liability on one or more of the Receiver’s claims is established, the Receiver intends to seek a process to determine the net winnings of each Net Winner Class member. The Receiver will notify the net winner of the amount of his or her net winnings according to the Rex Venture Group records, allow a reasonable opportunity to respond (supported by relevant documentation if the net winner disagrees with the calculation) and then either reach an agreement of the amount or have the amount determined by judicial process. Therefore, it is not necessary for any net winner to communicate with Class Counsel related to determining the amount of his or her net winnings or whether the alleged class member received more that $1,000 because each alleged class member will have an opportunity to address those issues in the damages process, if any, as ordered by the Court.
All members of the Net Winner Class are instructed to gather and preserve any documents or information (including electronic files) related to the amount each paid into and received from ZeekRewards so those documents and that information can be used, if necessary, in the process to determine the amount of their individual net winnings.
Any member of the Net Winner Class or other interested person who objects to the Order Appointing Class Counsel must file such objection no later than October 14, 2015.
Class counsel has established this website as the primary means of communicating with members of the class. Please check back frequently for updates as new information becomes available.
J. Kevin Edmundson, Esq.
Member of the Texas State Bar
Please direct any questions to info@ZeekNetWinnerClass.com.
You can also find additional information about Bell v. Disner case through the court appointed receiver’s website at www.zeekrewardsreceivership.com.