Slatkin assets help pay for lawyers working against him
The legal team that uncovered the scope of the $593 million Reed Slatkin
financial scandal will receive its first payments since beginning to
unravel the massive case last May.
U.S. Bankruptcy Court Judge Robin Riblet on Wednesday awarded
approximately $2.8 million to seven of the eight legal firms and
consultants, who had requested $4.4 million in fees and expenses.
Money to pay these bills comes out of the Slatkin estate. Its assets --
ranging from stock to a wine collection to Mr. Slatkin's real estate
holdings -- are being discovered and sold to raise money, some for legal
expenses and some to repay investors.
Although the money comes from a common pool, no one objected because the
creditors are impressed with the efforts of former FBI agent and
court-appointed trustee R. Todd Neilson and his team, plus Richard Wynne's
team at the Los Angeles law firm Kirkland & Ellis.
"Without this effort, there would be no way for the innocent victims to
gain any recovery at all -- so that's why it's been a bargain," said John
Poitras of Santa Ynez, who lost $15 million to Mr. Slatkin. "I told both
Todd (Neilson) and Rick (Wynne) way back that I was very happy they were
leading our team -- it is even more true today. This whole thing could
have easily gotten out of control and been a complete failure in lesser
hands."
Mr. Poitras, who reviewed all of the expenses and fees, said he is
"extremely pleased" with the performance of the entire team.
"I believe the costs are reasonable, if not a bargain," he said.
More expenses are coming, but do not include fees for any of the attorneys
defending Mr. Slatkin. Investors stand to receive only a fraction of their
investments, minus legal expenses -- all of which are a matter of public
record.
The sizable sums reflect the nature of the case: 2 million documents,
about 800 victims, more than 7,000 hours of investigation, and numerous
assets to evaluate and sell, all without significant cooperation from Mr.
Slatkin.
Among the assets recently sold was Mr. Slatkin's wine collection, which
was appraised at $35,000 but sold for $133,614.
Mr. Neilson said Wednesday that he has purchase offers for Mr. Slatkin's
Goleta house on Kellogg Avenue and for a property near Solvang.
Mr. Neilson also sold some of Mr. Slatkin's EarthLink stock for $3.2
million. He plans to sell millions of dollars of additional EarthLink
stock this year.
Mr. Slatkin spent 15 years perfecting and perpetrating a scheme that
eventually took in $593 million from about 800 people, investigators said,
including Hollywood celebrities, Internet moguls and hundreds of families
who entrusted him with their life savings, college tuition and retirement
funds.
These revelations are in a December report detailing the inner workings of
the scheme, run since 1986 by Mr. Slatkin from his Goleta office and Hope
Ranch estate. A News-Press review of court records found approximately 75
people in Santa Barbara County among the investors.
Mr. Slatkin received $593 million from investors from 1986 to 2001 and
distributed $535 million to investors, the report said. That left $59
million. However, 450 investors received $195 million more than they
invested, so, adding the two sums together, investigators believe Mr.
Slatkin duped people out of $255 million.
Mr. Slatkin has not been charged with any crime. While he has provided
limited assistance to investigators, the trustee said, he has not agreed
to formal questioning under oath. Mr. Neilson said he will continue
investigating and seeking more assets, and wants to have a liquidation
plan ready by April.
Return to The Reverend Reed Slatkin main index page
Return to The Skeptic Tank's main index page.
Santa Barbara News-Press
1/10/02
By MARK VAN DE KAMP
The views and opinions stated within this web page are those of the author
or authors which copyrighted and wrote them and may not reflect the views
and opinions of the ISP or account user which hosts the web page. The
opinions may or may not be those of the Chairman of The Skeptic Tank. The
term "Scientology"® is trademarked to the Scientology crime
syndicate. This information is provided in Fair Use for the public safety
in the hopes that others don't fall for Scientology's related frauds.