Q: When will first distribution be?
A: The first distribution for Estate claims was made the week of November 19, 2012. The payout of this first distribution was targeted as 5% of the final allowed claim amount. We will not be issuing any K-1’s of 1099’s related to this distribution. We cannot give tax advice regarding this or any other future distributions. You should consult your own tax advisor regarding the tax consequences and reporting obligations relating to your investment based upon your individual circumstances.
Q: Where is the Trust in the Claims process?
A: The claims adjudication process will be complete as of 10/12/12. The Trustee is in the process of formulating a preliminary distribution. To see your final adjudicated claim amount, see "News". If you did not receive an objection to your claim, your claim was accepted as is.
Q: When can I expect to receive a distribution from the PR Liquidation Trust?
A: The Trustee is planning the first general distribution to all investors in mid November 2012. It is expected to be 5% of your allowed claim. Please be aware that the PR Liquidating Trust is continuing to pursue some major litigation in hopes of receiving material recoveries. The Trust expects to make future distributions to both investors that assigned their claims to the Trustee and those that did not. The amount of future distributions is not determinable at this time.
Q: What is the status of the criminal prosecution of the various principals involved in Provident?
A: Joseph Blimline was sentenced to 240 months in federal prison on May 3, 2012 for his role in the Provident investment fraud. LEARN MORE
Brendan Coughlin and Henry Harrison were indicted on July 12, 2012 for their connection with the Provident investment fraud. LEARN MORE
Q: Why did I receive a letter from the PR Liquidating Trust requesting all kinds of information regarding my investment(s) in the Provident entities?
A: A letter was recently sent to each investor requesting information from them on a number of topics. The purpose of this information is to assist the Trustee in pursuing claims against a variety of Defendants including, but not limited to, Mick and Associates, Sinclair Oil (and related entities), Sovereign Bank, Ruthven, and a number of Brokerage Houses and individual brokers who sold interests in the Provident entities (who have yet to resolve their claims with the Trustee). Please do not contact your broker or any of the defendants in an attempt to gather this information. Send what is in your possession or available to you on line.
Should you need further information regarding the nature of the claims the Trustee is asserting on your behalf please refer to the "Claims Pending in Litigation" page. Your assistance may help maximize recoveries for the PR Liquidating Trust.
Q: If I respond to the document request, how will it be used?
A: The Trustee is collecting information solely to be used in connection with prosecuting claims against various parties on behalf of the PR Liquidating Trust. These documents will not be voluntarily disclosed to anyone other than parties to those proceedings, their counsel and staff, their experts, their witnesses, FINRA administrations, panels or arbitrators, and filed with court documents in either state or federal court.
If documents are produced to an opposing party, counsel and staff, experts, or witnesses, the documents will be subject to a protective order prohibiting public dissemination.
If these documents are filed with a state court, federal court, or in an arbitration proceeding, personal identifying information will be redacted. For example, financial account numbers, credit card numbers, social security numbers, phone numbers and addresses will be redacted to protect your personal information.
Q: Where can I view my bankruptcy proof(s) of claim and the claim numbers given them?
A: All of these details are available here.
What investors want to know:
- I recently received a 2010 Schedule K-1 (Form 1065). What does this mean and how does it effect my potential distribution from the PR Liquidation Trust?
If you invested in one or more of the following entities:
Provident Energy I, LP
Provident Resources I, LP
Provident Energy 2, LP
Shale Royalties 3, LLC
You have been issued a Schedule K-1 (Form 1065) for the tax year of 2010. This form reflects your share of the accounting done to finalize and close this entity and reports your ownership interest therein.
In the Fourth Amended Consolidated Plan of Liquidation, the Court extinguished the partnership interests and the Plan Agent is winding up the entities. While former partnership interest holders are now beneficiaries of the PR Liquidating Trust, the partnerships themselves are now closed. The Trust is in the process of liquidating the remaining assets of the Provident entities including pursuing claims brought by the Trust against numerous third parties. In the future, you will receive a pro-rata distribution from the Trust of any recoveries received from these efforts.
We cannot give tax advice. You should consult your own tax advisor regarding the tax consequences and reporting obligations relating to your investment based upon your individual circumstances.
The Trust has filed suit against numerous broker-dealers seeking to recover both the commissions paid them and additional damages caused by the broker-dealers. You can review pending claims here.
- What do I do about taxes?
The Trust does not provide tax advice. Please consult a qualified tax advisor or the IRS regarding Revenue Procedure 2009-20 and other tax advice pertaining to your investment in Provident Royalties, LLC.
You and your tax professional may find the attached documents useful in determining the appropriate tax treatment for your situation:
- Who has been sued and what lawsuits are presently being pursued by the Trustee on behalf of the Provident Royalties' investors?
Milo H. Segner, Jr., Liquidating Trustee of the PR Liquidating Trust, has undertaken significant litigation efforts to maximize the recovery for all investors in the Provident Royalties family of companies. Attached to this update you will find a table listing the pending litigation the Trustee has commenced. For example, the Trustee has commenced litigation against numerous different broker-dealers for their role in soliciting investors without conducting adequate due diligence on the Provident companies. The broker-dealer litigation also seeks the return of over $30 million in commissions these various broker-dealers received from the Provident Royalties companies. The litigation is still pending and will likely remain pending for some time, but progress is being made.
The Trustee, in conjunction with counsel for a class of Provident investors, has reached a global settlement with Securities America, Inc. and Ameriprise. The settlement has been approved by the United States District Court for the Northern District of Texas and the Trustee has received $6.7M in settlement monies. The Trustee is negotiating settlements with other broker-dealer Defendants and has taken steps to attempt and accelerate the litigation and, hopefully, the recovery process.
The Trustee has also commenced litigation against the former directors and officers of the Provident Royalties companies, Sinclair Oil & Gas, PFM, Inc. and numerous other individuals and companies that received monies from the Provident entities without providing fair value in return. The Trustee also commenced litigation against the Jordan River Liquidating Trust and has reached an agreement to compromise and settle those claims as well. The attached chart provides a summary of the existing litigation and the numerous lawsuits the Trustee is prosecuting.
The Trustee and the Trust Oversight Committee are committed to prosecuting these claims aggressively to maximize the recovery for the investors and are working hard towards being in a position to make distributions to investors.
- How much money has the Trustee recovered on behalf of the Provident Royalties' investors?
The Trustee has achieved substantial success since the establishment of the Trust. The Trustee has collected approximately $18.8 million in gross settlements. Most of this money, however, has not been actually collected or received into the Trust at this time. Some settlements are subject to Court approval, some settlements are structured payments over time, and other settlements simply permit the Trustee to free up monies that have already been reserved in the Trust. The Trustee does expect, however, to have received the majority of these monies by the end of the fourth quarter of 2012.
Several settlements have been reported by the press or media outlets; however, some of these reports were inaccurate. Other articles reported the settlements, but the proceeds have not yet been received by the Trust. Administrative costs and the economies of scale for distribution to all investors must be taken into account by the Trustee before actual distribution to keep costs at the lowest possible price point to maximize pro rata distributions to the individual investors.
- How much money can I expect to receive from the PR Liquidating Trust?
At this time, the Trustee does not have sufficient information to be able to provide an accurate estimate of the exact amount of monies to be distributed and what each investors' pro rata share will be. The ultimate answer to this question depends on many factors not entirely within the Trustee's control, including, for example, the financial health and solvency of the defendants sued, the total amount of recoveries collected, the total amount of litigation costs to achieve the recoveries, the actual amount of allowed claims, and how many or what claims the Bankruptcy Court may disallow.
- The Trustee recently requested an extension of the objection deadline to stockholder claims. Does that affect me and what does that mean?
With respect to investor distributions or payments, the Trustee has requested that the Court abate or suspend the Trustee's deadline to object to investor claims. The Trustee believes it is essential to a fair, cost-effective and efficient claim administration process. The Court entered an order abating the deadline and requiring the Trustee to file quarterly status reports to monitor the claims process.
Before any distributions can be made to investors, the Trustee is obligated under the Fourth Amended Joint Plan of Liquidation and the Bankruptcy Code to ensure that each claimant or interest holder's claim is accurate. Put another way, every investor's claim (and there are over 10,000 of them) must be analyzed to ensure that no one is being paid too little or too much. That takes significant time and expense because distributions are likely to only be made after significant progress is made in the pending litigation referenced above, the Trustee believes in his professional judgment that the best use of resources now is to focus on the litigation and let some of those recoveries flow into the Trust before resolving all claims. The recently filed motion requesting an extension will not affect the status of your claim in the bankruptcy case.
- How do I contact the Trust with other questions?
You can submit all questions and comments to us through our Contact page and we will get back to you as quickly as we can.