Plein Update RE: Trustee’s Omnibus Objection to Secured Claims

The Bankruptcy Trustee is in the final stages of liquidating/abandoning the remaining assets in the matter and will be doing a final analysis of the remaining claims. The attorney for the Trustee will be filing a Notice advising all of the creditors (including all of our clients) that the Trustee will be asking for all remaining secured claims to be reclassified as unsecured. What this means is that those clients that have not been paid on their claims will all be grouped together in the unsecured class and will be paid a prorate distribution out of the remaining funds after the bankruptcy estate has been liquidated. For those clients that have been paid out of the sale of a specific property, there will be no further distribution as to the secured claim against the property that was sold. If you were not paid anything, or just a nominal amount to clear a lien, your claim will be part of the unsecured distribution.

The Trustee’s Counsel is still reviewing the records of the Plein business to see if there were any “preferred” payments during the period when it was obvious that the company was insolvent. If a determination is made that certain payments were made which should not have been made by the Pleins, the Trustee has the right to seek repayment of those payments. We have asked Trustee’s Counsel to be particularly aware of any payments made to Doug Plein or other family members during the final two years preceding the Bankruptcy.

You should not be overly concerned about the Notice that you receive from the Trustee seeking to object to the reclassifying your loan as unsecured. We have filed claims for each of our clients and we will make sure that you receive whatever share of the unsecured dividend that you are entitled to. Please call us or e-mail us if you have any questions.

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