2015 03 27 Amended Motion For Approval of Plan of Distribution

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 1 of 8
HOLLAND & HART LLP

David K. Broadbent, #0442
Doyle S. Byers, #11440
Cory A. Talbot, #11477
222 S. Main Street, Suite 2200
Salt Lake City, UT 84101
Telephone: 801-799-5800
Facsimile: 801-799-5700
Attorneys for Gil A. Miller as Court-Appointed Receiver
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
SECURITIES AND EXCHANGE

COMMISSION,
AMENDED MOTION FOR APPROVAL

OF PLAN OF DISTRIBUTION
Plaintiff,
Civil Action No. 2:11-cv-01165
vs.
MANAGEMENT SOLUTIONS, INC., a
Texas Corporation; WENDELL A.
JACOBSON; ALLEN R. JACOBSON,
Judge Bruce S. Jenkins
Defendants.
Gil A. Miller, the Court-appointed receiver in this matter (the Receiver), submits the
following Amended Motion for Approval of Plan of Distribution (the Motion).
The Receiver first submitted his Motion for Approval of Plan of Distribution on February
27, 2015, attaching the proposed Plan of Distribution. (CM/ECF No. 2311 (the Original
Motion and Exhibit B thereto.) The Receiver now seeks to make a minor modification to the
proposed Plan of Distribution with respect to the treatment of Class 8.1 No other portion of the
proposed Plan of Distribution would be affected by this amendment.
As explained in the Original Motion, in the event the Plan of Distribution is approved,
there is a strong possibility that Class 5 Claimants (Investor Claimants) will receive 100% return
of their Adjusted Investor Claim when considering the combined payments they received from
MSI prior to the initiation of the receivership and the projected distributions they may receive
pursuant to the Plan of Distribution. Thereafter, if funds are available to make distributions to
Class 8 Claimants (also made up of Investor Claimants), those Claimants will receive additional
distributions in excess of 100% of their Adjusted Investor Claim.
The original Plan of Distribution states the following regarding the distributions to Class
8:
Class 8. Amounts available for distribution, if any, after payment
in full of Classes 1, 2, 3, 4, 5, 6, and 7 Allowed Claims shall be
paid to the Class 8 Claimants proportionate to their Adjusted
Investor Claim.
(Article IV, Section 8.) This could be read to mean that all Class 8 Claimants will receive
distributions solely based on the amount of their Adjusted Investor Claim amount without
considering whether they had already received payments from MSI in excess of 100% of their
Adjusted Investor Claim. This is not the intention of the Receiver. As illustrated on the
schedule attached hereto as Exhibit A in the column entitled % Returned Before Distribution,
there are eight Investor Claimants that received amounts from MSI (prior to the receivership) in
Unless otherwise defined herein, capitalized terms are defined in the Original Motion and/or
the Plan of Distribution attached thereto as Exhibit B.
2
excess of 100% of their Adjusted Investor Claim (the Winners).2 The Receiver does not
believe it would be equitable for the Winners to begin receiving distributions simultaneously
with other Investor Claimants in Class 8. Instead, a rising tide method of distribution, as
described in the Original Motion, should be used so that other Investor Claimants will receive
distributions first. A specific Winner will only begin to receive distributions (if at all) when the
other Investor Claimants have received sufficient distributions to allow them to receive the same
Percentage Return as that particular Winner. This is the most equitable way to treat Class 8
Claimants, and the Receiver seeks to modify the proposed Plan of Distribution to effect this
method of distribution. Therefore, the Receiver seeks to modify the language of Article IV,
Section 8 to read as follows:
Class 8. Amounts available for distribution, if any, after payment
in full of Classes 1, 2, 3, 4, 5, 6, and 7 Allowed Claims shall be
paid to the Class 8 Claimants pursuant to the rising tide method
of distribution as described in the discussion regarding the
treatment of Class 5 above, except that, by definition, the
distributions (if any) to Class 8 Claimants will be beyond 100%
Percentage Return.
Attached hereto as Exhibit B is a new version of the proposed Plan of Distribution (exclusive of
exhibits) that incorporates this change.
Attached as Exhibit F to the Original Motion, the Receiver provided the Preliminary
Claims Analysis that provided a preliminary calculation of the anticipated recovery for each
Claimant. For Class 5, the last column indicated a Class 8 Percent Allocation that will now be
Because the Preliminary Claims Analysis is subject to change, the list of Winners may change
too, but that is unlikely.
3
inapplicable. The Receiver has updated3 the Preliminary Claims Analysis and posted it to the
website www.managementsolutionsreceivership.com.4 It also now reflects how a hypothetical
distribution to Class 8 would be calculated.
The Receiver believes that this change is more equitable and is necessary to clarify the
proposed Plan of Distribution. Because the change can only negatively impact the Winners, in
additional to filing this Amended Motion with the Court and providing notice to all parties
participating in this action, the Receiver will also provide notice to the Winners at their last
known address. The Receiver requests that the Court approve the proposed Plan of Distribution
as modified.
RESPECTFULLY SUBMITTED this 27th day of March, 2015.
HOLLAND & HART LLP
/s/ Doyle S. Byers

David K. Broadbent
Doyle S. Byers
Cory A. Talbot
Attorneys for Gil A. Miller as Court-Appointed
Receiver
As stated in the Original Motion, the numbers in the Preliminary Claims Analysis are subject to
change, and some minor changes have already occurred. Those changes are also incorporated in
the new Preliminary Claims Analysis posted to the website.
4
Courtesy copies of the schedules regarding Class 5 and Class 8 distributions are also provided
to the Court herewith.
4
CERTIFICATE OF SERVICE
I hereby certify that on the 27th day of March, 2015, I caused to be electronically filed
the foregoing with the Court by CM/ECF, and the Court will send electronic notification to all
counsel.
I also certify that I caused the foregoing to be served via first-class mail, postage prepaid,
on the following:
Lanny Waite
Maxine Waite
P. O. Box 192
Logandale, NV 89021
Pro Se
I also certify that I caused the foregoing to be served via Priority Mail, postage prepaid,
on the following:
Red Castle Inc Retirement Trust
P. O. Box 257
Fountain Green, UT 84632
Daley, Scott R or Ellen

300 West 4000 South
Vernal, UT 84078
Carlson, Sue
1038 West 1750 North
Nephi, UT 84648
Lovell, Brett or Emily

P. O. Box 398
Jacobson, Bradley G
P. O. Box 372
Sun Winds, LLC

P.O. Box 372
Sun Winds, LLC

P. O. Box 372
Barrett, Dustin
P. O. Box 94
Foutnain Green, UT 84632
Golden J, LLC
P. O. Box 372
Bailey, Greg B. or Jenny J.

P. O. Box 298
Provident Development Group, LLC

P. O. Box 372
Sagewood Capital, LLC

P. O. Box 92819
Southlake, TX 76092
Parkwood Capital, LLC

P. O. Box 92819
Southlake, TX 76092
EJ Edwards Ranch, LP
P. O. Box 92819
Southlake, TX 76092
Dixie Winds, LLC

P. O. Box 76092
Southlake, TN 76092
Circle J Farms Limited Partnership

P. O. Box 92819
Southlake, TX 76092
APS as Admin for the Benefit of Gloria S.

Atienza
4168 West 12600 South, Suite 300
Riverton, UT 84096
Fotheringham, Bob and Kathy

4439 Lily Meadows Lane
Colonial Stone Brook Apartment

Homes II, LLC
4515 King Goerge Court
Perry Hall, MD 21128
Thueson, Bryan and Marlynae

9448 South 2100 West
South Jordan, UT 84095
Welling, Eric C. and Mary Katherine

2732 East 6200 South
McDermott, Eugene and Mary Ann

1778 Oakridge Drive
Nielson, Matthew A and Jill R. etal

7715 North 2625 East
Ephraim, UT 84627
Jacobson, Melba
P. O. Box 400
Boca Raton, LLC

P. O. Box 400
Boca Raton, LLC TIC Member of the

Edwards Ranch Development
P. O. Box 400
Jacobson, Melba
P. O. Box 400
Wool City, Inc.

P. O. Box 92819
Southlake, TX 76092
Starwood Management Company, Inc.

P. O. Box 92819
Southlake, TX 76092
Jacobson, Brandon W. and April C.

436 W. Bountiful Way
Saratoga Springs, UT 84045
Jacobson, Cami
5184 Caldwell Mill Rd., Ste 204-345
Birmingham, AL 35244
Nycom Apartments, LLC

West Jordan, UT 84088
Pheasant Wood, LLC

West Jordan, UT 84088
Jacobson, Laney V.
498 East 100 South
Manti, UT 84642
Douthitt, Sam and Carol

1801 Ritter St.
Chesterton, IN 46304
Coutts, Jason W. and Casey J.

12584 Lucky Ct.
Eastvale, CA 91752
/s/
Doyle S. Byers
INDEX OF EXHIBITS
List of Winners.
Proposed Plan of Distribution (with modification to Article IV, Section 8).
7681804_1
Case 2:11-cv-01165-BSJ Document 2377-1 Filed 03/27/15 Page 1 of 2
EXHIBIT A

Management Solutions, Inc., Receivership
Class 5: Investor Claims
Summary of Preliminary Investor Claim Analysis (subject to further review and modification)
SORTED BY NAME
As of March 25, 2015
% Returned
Before
Distribution
Estimated
Receivership
Distribution(s)
Percent of AIC
Returned After
Receivership
Distribution(s)
Class 8
Percent
Allocation
((D+G)/C)
(C / Sum(C))
Amounts Based on Currently Available Information
Claimant Name
Filed
Cash In
Adjusted
Claim Claim Basis at Since
Investor
Payments
Unpaid
Number
12/31/08 12/31/08 Claim ("AIC") Since 12/31/08 Claim
(A + B)
Douthitt, Sam and Carol

Nycom Apartments, LLC
Pheasant Wood, LLC
Fotheringham, Robert and Kathy
American Pension Services as Administrator for the Benefit of Gloria S. Atienza
McDermott, C. Eugene and Mary Ann
Thueson, Bryan or Marlynae
Welling, Eric C. and Mary Katherine
0576
0527
0528
0438
0376
0457
0445
0455
1,211.00
(153,683.00)
205,030.00
11,867.00
5,511.00
6,175,591.00
84,881.00
1,491,239.00
1,211.00
(8,051.34)
(153,683.00)
(733,645.86)
205,030.00
(717,930.01)
11,867.00
(37,815.73)
5,511.00
(11,106.00)
6,175,591.00 (8,446,186.09)
84,881.00
(103,872.85)
1,491,239.00 (1,525,041.65)
(C - D)
-
(D / C)
664.85%
477.38%
350.16%
318.66%
201.52%
136.77%
122.37%
102.27%
664.85%
477.38%
350.16%
318.66%
201.52%
136.77%
122.37%
102.27%
0.00%
-0.08%
0.11%
0.01%
0.00%
3.23%
0.04%
0.78%
Comments
EXHIBIT B
HOLLAND & HART LLP

David K. Broadbent, #0442
Doyle S. Byers, #11440
Cory A. Talbot, #11477
222 S. Main Street, Suite 2200
Telephone: 801-799-5800
Fax: 801-713-6259
Attorneys for Gil A. Miller, as Court-Appointed Receiver
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
SECURITIES AND EXCHANGE

COMMISSION,
PLAN OF DISTRIBUTION
Plaintiff,
Civil Action No. 2:11-cv-01165
vs.
MANAGEMENT SOLUTIONS, INC., a
Texas Corporation; WENDELL A.
JACOBSON; ALLEN R. JACOBSON,
Judge Bruce S. Jenkins
Defendants.
The Receiver, Gil A. Miller, hereby submits this proposed Amended Plan of Distribution
(the Amended Plan).
ARTICLE I-INTRODUCTION AND DEFINITIONS
When used in this Plan, the capitalized terms will have the following definitions:
1.
Adjusted Investor Claim shall refer to the resulting amount after the Receiver
calculates and adjusts an Investor Claim pursuant to the following methodology: As part of the
Claims Analysis Report, the Receiver will calculate the Claim Basis for each Investor Claim as
of the Claim Basis Date. The Receiver will add to the Claim Basis the amounts of any additional
investments the Investor made following the Claim Basis Date, the sum of which is the Adjusted
Investor Claim. Although payments MSI made to an Investor following the Claim Basis Date
(whether characterized as return of principal or interest) are not included in the calculation of the
Adjusted Investor Claim, such payments are accounted for in the distribution process (see Article
IV, Section 5).
2.
Administrative Expense Claims shall refer to all costs, expenses, and fees
incurred by the Receiver and his agents in connection with his administration of the receivership,
including, but not limited to, consultant fees, accountant fees, auctioneer and/or liquidator fees,
data management and storage fees, legal fees, and all other reasonable costs and expenses.
3.
Allowed Claim shall refer to a Claim that was submitted to the Receiver in a
timely fashion, or is otherwise accepted by the Receiver in his sole discretion, by a Claimant in
accordance with the provisions set forth in the Plan, and that has been approved by the Court as
compensable.
4.
Allowed Claimants shall refer to Claimants with Allowed Claims.
5.
Approval Order shall refer to the order of the Court approving the Plan.
6.
Bar Date shall refer to that date by which a Claim was required to be filed in
order to receive a distribution from the funds or assets held by the Receiver pursuant to this Plan.
The Bar Date was established by order of the Court as September 2, 2014 (see Order at CM/ECF
No. 1955). Claims submitted after the Bar Date are considered untimely, and will not participate
in the Plan unless accepted by the Receiver in the Receivers sole discretion.
7.
Claimant shall refer to a Person who claims to be owed money by one or more
receivership entities. A married couple, and any of their wholly-owned affiliates, will be
considered a single Claimant.
8.
Claim shall refer to all of a Claimants purported right(s) to distribution,
whether or not such purported right(s) is (are) reduced to judgment, liquidated, unliquidated,
fixed or contingent, asserted or unasserted, matured, disputed, undisputed, legal, secured or
unsecured, regardless of whether a Claimant submitted multiple claim forms.
9.
Claims Analysis Report shall refer to the report of all Claims submitted to the
Receiver, and such report shall set forth, among other things, the individual Claims, including the
Claim Basis and Adjusted Investor Claim for Investor Claimants (see Article V, Section 2).
10.
Claim Basis shall refer to the amount of an Investors Claim as of the Claim
Basis Date as determined by the Receiver based on capital account balances as reported on K-1s,
principal balances on promissory notes, and other information.
11.
Claim Basis Date shall refer to December 31, 2008.
12.
Claims Process shall refer to the procedure established by the Receiver and set
forth in Article V of the Plan.

13.
Class shall refer to a group of Claims that are substantially similar to each other
as classified pursuant to the Plan.

14.
Case shall refer to SEC v. Management Solutions, Inc., et al., Civil No. 2:11-
cv-01165.
15.
Creditor shall refer to any person or entity owed money by MSI who is not an
Investor.
16.
Home Owners Association or HOA shall refer to any entity that claims a
lien on, or right to payment of dues or other expenses related to, receivership property pursuant
to a recorded declaration of conditions, covenants, and restrictions or similar document.
17.
Investor shall refer to a person or entity who holds an Investor Claim.
18.
Investor Claim shall refer to a Claim for investments made in or with MSI,
whether characterized as debt or equity by MSI, but shall not include Secured Claims. The term
Investor Claim includes any Claim for unsecured debt made by an Investor.
19.
MSI shall refer, individually and collectively, to Management Solutions, Inc.,
Wendell A. Jacobson, Allen R. Jacobson, Parkwood Management, LLC, Starwood Management

Company, Inc., and the companies and individuals listed in Exhibit A hereto.
20.
Non-Participants shall have the meaning set forth in Article II, below.
21.
Person shall refer to an individual, corporation, partnership, limited liability
company, trust, association, retirement or pension plan, or other entity.

22.
Personal Injury Claim shall refer to a Claim based upon a tort (negligence or an
intentional act) resulting in personal injury or death to a person or damage to tangible property
committed by, or for which, a receivership entity is allegedly responsible.
23.
Secured Claims shall refer to Claims held by Creditors holding perfected liens
on or security interests in property of MSI, and shall include property tax claims.
24.
Secured Creditors shall refer to Creditors holding Secured Claims.
25.
Tax Claims shall refer to Claims of government authorities for the payment of a
tax, including, but not limited to, income taxes, withholding taxes (including FICA and
Medicare), personal property or intangible taxes, payroll taxes, and sales taxes, but excluding
property tax claims.
26.
Trade Creditor Claims shall refer to Claims for goods or services provided to
27.
Winner shall refer to an Investor that, following the Claim Basis Date, received
MSI.
from MSI funds in excess of its Adjusted Investor Claim.
ARTICLE II-DEFINITION OF NON-PARTICIPANTS OF THE PLAN

1.
Non-Participants of the Plan will not be considered Allowed Claimants and shall
receive no distribution from the Plan.

2.
Non-Participants of the Plan are defined by the following five categories:

a. Insiders, i.e., individuals or entities that were involved in MSIs investment
scheme, and the affiliates of such individuals or entities. The Receiver
considers MSI as defined above, and the individuals and entities listed on
Exhibit B hereto to be insiders.
b. Investors and Creditors who have settled their Claims with the Receiver and,
in connection with the settlement, waived their Claims.
c. Persons who have valid tenant-in-common (TIC) ownership interests in real
property will not participate in the Plan with respect to such TIC ownership
interests. Nothing in this section will prevent a TIC owner from participating
in the Plan based on other non-TIC Claims.
d. Any HOA that claims an interest in any receivership property that has been
(or will be) abandoned by the Receiver. Also, any HOA that claims an
interest in any receivership property for which the proceeds from the sale of
such property are insufficient to satisfy the claim of such HOA will be a NonParticipant to the extent of any deficiency.
e. Any Tax Claim that is specifically for property taxes related to any
receivership property that has been (or will be) abandoned by the Receiver.
Also, any Tax Claim that is specifically for property taxes for any receivership
property for which the proceeds from the sale of such property are insufficient
to satisfy such Tax Claim will be a Non-Participant to the extent of any
deficiency.
f. Investors and Creditors who have not filed a Claim by the Bar Date, unless
otherwise permitted by the Receiver.
3.
The definition of Non-Participants of the Plan may be modified both before and
after approval of the Plan, on such notice and hearing as the Court deems appropriate.
ARTICLE III-CLASSIFICATION OF CLAIMS AND INTERESTS

The Claims are classified as set forth in this Article. The rights of all Claimants, and the
responsibilities of the Receiver with respect to such Claimants, shall be based upon their
classification herein:
1.
Class 1 shall consist of the portion of Secured Claims for principal, contract rate
interest, and reasonable attorneys fees (exclusive of default interest, penalties, late fees,
servicing fees, etc.), but shall not include any amounts that exceed the proceeds from the sale of
the collateral securing the Secured Claims, i.e., deficiency claims. Class 1 shall also consist of
HOA Claims for HOA assessments (exclusive of default interest, penalties, late fees, etc.), but
shall not include any amounts that exceed the proceeds from the sale of the receivership property
related to such HOA Claim, i.e., deficiency claims, after payment of Secured Claims.
2.
Class 2 shall consist of Administrative Expense Claims.
3.
Class 3 shall consist of Tax Claims, but for Tax Claims specifically for property
taxes, Class 3 shall not include any amounts that exceed the proceeds from the sale of the
receivership property related to such Tax Claim, i.e., deficiency claims. Also, Class 3 shall not
include any Tax Claim that is specifically for property taxes related to any receivership property
that has been (or will be) abandoned by the Receiver.
4.
Class 4 shall consist of Trade Creditor Claims.
5.
Class 5 shall consist of Investor Claims.
6.
Class 6 shall consist of Claims of Secured Creditors for any amounts in excess of
the principal amount of their claims, contract rate interest, and reasonable attorneys fees, and
any amounts which exceed the proceeds from the sale of the collateral securing the Secured
Claims, i.e., deficiency claims. Class 6 shall not include any Claims by persons or entities
defined as a Non-Participant of the Plan.
7.
Class 7 shall consist of Personal Injury Claims.
8.
Class 8 shall consist of Investor Claims for amounts in excess of the total of the
Adjusted Investor Claims.

9.
Class 9 shall consist of Non-Participants.
The Receiver reserves the right to dispute any Claim or to move a Claim from one Class
to another with approval from the Court or by stipulation with the Claimant.
ARTICLE IV-TREATMENT OF CLASSES

1.
Class 1. Class 1 Allowed Claims shall be paid upon sale of the MSI property
securing such Class 1 Allowed Claims from the proceeds of such sale. Class 1 Allowed Claims
shall have priority over all other Allowed Claims.
2.
Class 2. Class 2 Allowed Claims shall be paid from the funds held by the
Receiver pursuant to the procedures set forth in the Courts (1) Order Appointing Receiver
Freezing Assets and Other Relief dated December 15, 2011(CM/ECF No. 4); (2) Order Granting
Receivers Motion for Order Establishing Monthly Fee and Expense Reimbursement Procedures
dated July 7, 2014 (CM/ECF No. 1986); and (3) Order Granting Receivers Motion for an
Extension to the Monthly Fee and Expense Reimbursement Procedures dated August 12, 2014
(CM/ECF No. 2054). Class 2 Allowed Claims shall be accorded priority over all other claims,
except Class 1 Allowed Claims.
3.
Class 3. The Receiver may pay Class 3 Allowed Claims at the time they are due
or at any time thereafter as determined by the Receiver. In the event a Class 3 Allowed Claim
has not been paid when due, funds shall be reserved from the funds held by the Receiver for
payment, and such Class 3 Allowed Claim shall be accorded priority over all other Claims,
except Classes 1 and 2 Allowed Claims.
4.
Receiver. Class 4 Allowed Claims shall be accorded priority over all other Claims, except
Classes 1, 2, and 3 Allowed Claims.
5.
Class 5. Claimants holding Class 5 Allowed Claims shall be eligible for a
distribution from the funds held by the Receiver as follows:
Some MSI Investors received payments from MSI and/or made additional cash
investments in MSI following the Claim Basis Date. These payments and investments will be
taken into account in determining distributions under this Plan as described below. In
determining distributions to Class 5 Allowed Claims, the Receiver shall first determine the
Adjusted Investor Claim amount for each Investor Claim. For each Adjusted Investor Claim, the
Receiver will analyze the payments received by the Investor following the Claim Basis Date and
calculate the percentage of the Adjusted Investor Claim returned to the Investor subsequent to
the Claim Basis Date (the Percentage Return). The amount distributed to each Class 5
Claimant will be calculated using the rising tide method of distribution as described below:
a. The first Investors to receive a distribution will be those who did not receive
any payments from MSI following the Claim Basis Date. Those Investors
who did not receive any payments from MSI following the Claim Basis Date
will receive distributions until they have received a Percentage Return equal
to the Percentage Return of the Investors with the lowest non-zero Percentage
Return since the Claim Basis Date. Thereafter, those Investors who did not
receive any payments from MSI following the Claim Basis Date, together
with the Investors with the lowest non-zero Percentage Return since the Claim
Basis Date will receive distributions until they have received a Percentage
Return equal to the Percentage Return of the Investors with the second lowest
non-zero Percentage Return since the Claim Basis Date. This distribution
method will be followed until funds to be distributed are exhausted, or until all
Investors have received 100% Percentage Return.
Illustration of Rising Tide Distribution: The following illustration assumes there are only
three investors:
Investor
Adjusted
Investor Claim
$100,000.00
Cash-out
Post Claim
Basis Date
$0.00
Percentage
Return
$200,000.00
$40,000.00
20%
$100,000.00
$80,000.00
80%
0%
Given the above scenario, Investor A would be the first to receive a distribution. Investor
B will not receive a distribution unless and until Investor A has received a 20% Percentage
Return or, in this illustration, distributions of $20,000.00. In the event Investor A receives
$20,000.00 in distributions and there remain additional funds to distribute, Investor B will begin
receiving distributions with Investor A proportionate to their Adjusted Investor Claims. Based
on the above illustration, in the event there is an additional $6,000.00 to distribute, Investor A
would receive $2,000.00, and Investor B would receive $4,000.00. Investors A and B will
continue to receive distributions to the exclusion of Investor C until Investors A and B have both
received a 80% Percentage Return. In the event Investors A and B receive distributions
sufficient for both to receive an 80% Percentage Return and there remain additional funds to
distribute, Investor C will begin receiving distributions with Investors A and B proportionate to
their Adjusted Investor Claims.
Distributions on Class 5 Allowed Claims, plus the total of payments Investors received
from MSI following the Claim Basis Date, shall not exceed the total of the Adjusted Investor
Claims.
10
Class 5 Allowed Claims shall be accorded priority over all other Claims, except Classes
1, 2, 3, and 4 Allowed Claims.
6.
Receiver. Class 6 Allowed Claims shall be accorded priority over all other Claims, except
Classes 1, 2, 3, 4, and 5 Allowed Claims. The amount each Class 6 claimant will receive will be
calculated on a pro rata basis, i.e., in proportion to the amount of each Class 6 Allowed Claim.
7.
Class 7. Class 7 Claimants must first look to MSI insurance for recovery on their
Claims. In the event such Claimants are unable to recover through MSI insurance, and their
Claims are allowed by the Court, Class 7 Allowed Claims shall be paid from the funds held by
the Receiver and shall be accorded priority over all other Claims, except Classes 1, 2, 3, 4, 5, and
6 Allowed Claims.
8.
Class 8. Amounts available for distribution, if any, after payment in full of
Classes 1, 2, 3, 4, 5, 6, and 7 Allowed Claims shall be paid to the Class 8 Claimants pursuant to
the rising tide method of distribution as described in the discussion regarding the treatment of
Class 5 above, except that, by definition, the distributions (if any) to Class 8 Claimants will be
beyond 100% Percentage Return .
9.
Class 9. No distribution shall be made to any Class 9 Claimant, and no funds will
be held in reserve for Class 9 Claimants.

The nine (9) classes of claimants set the ordinal priority for payment.
ARTICLE V-CLAIMS PROCESS

1.
Administrative Claims (Class 2) shall be paid pursuant to the procedures set forth
in the Courts (1) Order Appointing Receiver Freezing Assets and Other Relief dated December
11
15, 2011(CM/ECF No. 4); (2) Order Granting Receivers Motion for Order Establishing Monthly
Fee and Expense Reimbursement Procedures dated July 7, 2014 (CM/ECF No. 1986); and (3)
Order Granting Receivers Motion for an Extension to the Monthly Fee and Expense
Reimbursement Procedures dated August 12, 2014 (CM/ECF No. 2054). Tax Claims (Class 3)
shall be paid when due and without need for further approval by the Court.
2.
Once the Receiver has reviewed and analyzed all Claims, the Receiver will
prepare the Claims Analysis Report (see Article VI), which will include an analysis of each
Claim submitted. The Claims Analysis Report will include, among other things, the Receivers
proposed classification of each Claim, his calculations of the Claim Basis and the Adjusted
Investor Claim for each Investor Claim, and his proposed amounts for all other Claims.
3.
The Receiver shall complete his proposed Claims Analysis Report within 7 days
of the entry of the Approval Order and shall serve it on all Claimants at their last known address
and post it on the Receivers website at www.managementsolutionsreceivership.com.
Thereafter, Claimants are encouraged to communicate with the Receiver regarding the proposed
classification and treatment of their respective Claims, and may submit additional documentation
or information regarding their respective Claims. The Receiver, in his discretion, may make
alterations to the proposed Claims Analysis Report based on communications and additional
information received from Claimants. The Receiver shall file a motion for approval of the
Claims Analysis Report with the Court within 30 days of the entry of the Approval Order.
4.
Within 14 days of the Receiver filing his motion for approval of the Claims
Analysis Report, Claimants may file and serve any objections they may have to the Claims
Analysis Report, including, without limitation, objections to the Receivers proposed
12
classification or amount of Claims. All objections shall be served upon the Receiver and filed
with the Court. Responses to any objections shall be filed by the Receiver no later than 28 days
following the filing of his motion for approval of the Claims Analysis Report.
5.
If a Claimant does not file and serve an objection within 14 days following the
filing of the motion for approval of the Claims Analysis Report, such Claimant has waived any
right to object to the Claims Analysis Report. Moreover, if no Claimant objects to a particular
Claim and its treatment in the Claims Analysis Report, the Claims Analysis Report shall be final
and binding as to that particular Claim.
6.
Claimants objections, which are not otherwise resolved, will be adjudicated by
the Court.
ARTICLE VI-INTERIM DISTRIBUTIONS

Following entry of the Approval Order, and in conjunction with the Claims Process
outlined in Article V, including approval of the Claims Analysis Report, the Receiver will seek
Court approval to begin distributing funds on an interim basis pursuant to the priorities described
herein. The Receiver will hold in reserve any amounts necessary to pay amounts in dispute
based on Claimants objections pending the determination of such objections. The Receiver will
seek approval of subsequent distributions, as well, as additional proceeds become available for
distribution.
ARTICLE VII-RETENTION OF JURISDICTION

1.
The Order Appointing Receiver, Freezing Assets and Other Relief dated
December 15, 2011 (CM/ECF No. 4), and any related orders of the Court dealing with the
Receivers power and authority, shall remain in full force and effect, except as modified in the
13
Approval Order, or any subsequent order entered by this Court, until this Court enters an order
concluding this Case and discharging the Receiver.
2.
The Receiver shall retain all powers and authority provided in the Order
Appointing the Receiver until the discharge of the Receiver by this Court.
3.
This Court shall retain jurisdiction over the Case for all purposes allowed by law
including, but not limited to, the following:

a. the interpretation, implementation, enforcement, and consummation of the
Plan;
b. the allowance or disallowance of any Claim;
c. the determination of validity and priority of any Claim;
d. the modification of the Plan as may be necessary to carry out its purposes and
intent;
e. the resolution of all litigation that has been or may be filed by or against the
Receiver;
f. any future plans of distribution; and,
g. the entry of an Order concluding the Case and discharging the Receiver.
ARTICLE VIII-MISCELLANEOUS PROVISIONS.

1.
Upon application of the Commission, the Receiver, or any party of interest, this
Court may issue an order directing any necessary party to execute, deliver, or join in the
extension or delivery of any instrument or document and perform any other act necessary for the
consummation of the Plan.
14
2.
The Receiver shall be authorized to exclude from distribution any funds he deems
necessary to pay for the ongoing operations and obligations of the receivership. This amount
shall be used, subject to this and other orders of the Court, to pay administrative expenses of the
receivership, pay any applicable taxes, and for any other purpose approved by this Court.
3.
The Receiver shall be authorized, empowered, and permitted to enter into an
agreement or agreements with any Claimant, subsequent to the Approval Order, which
provide(s) for payment or treatment of such Claimant's Claim, subject to Court approval.
4.
The provisions of the Plan, upon confirmation through the Approval Order, shall
be binding upon all Claimants and parties in interest.

5.
The Plan may be modified both before and after approval, on such notice and
hearing as this Court deems appropriate.

6.
Distributions under the Plan shall be made by sending a check in the name of the
Claimant to the last known address of said Claimant or to the address specified by any change of
address notices received by the Receiver before the funds are distributed. Claimants are required
to advise the Receiver, in writing, of any change of address or party in interest.
7.
In the event that a Claimant fails to negotiate a distribution check within 90 days
after the date of the check, which was mailed to the last known address for said Claimant, such
Claim shall be considered abandoned and disallowed in its entirety. The funds, which would
otherwise be distributed to such Claimant, shall revert to the receivership estate.
8.
In the event the Receiver sends a check to a Claimant for payment on a Claim and
receives the check back as undeliverable, the Claim shall be considered abandoned and
15
disallowed in its entirety and, the funds, which would otherwise be distributed to such Claimant,
shall revert to the receivership estate.
9.
In the event the Receiver requires information or forms from a Claimant in
relation to making a payment (such as tax forms), the Receiver may condition any payment upon
receiving such information or forms from the Claimant.
10.
The Receiver, his agents, attorneys and employees, shall be held harmless for any
damages or liability that may arise through the discharge of his duties under the Plan, in
accordance with this Courts December 15, 2011, Order Appointing Receiver, Freezing Assets
and Other Relief dated December 15, 2011 (CM/ECF No. 4).
11.
When the Receiver determines that further efforts to liquidate the assets of MSI
are not required or would not be economical, he shall file a motion with this Court to close the
Case wherein he may request such relief as he deems necessary for the final resolution of this
Case.
DATED this ____ day of ______________, 2015.
BY THE COURT:
_________________________________
HONORABLE BRUCE S. JENKINS
U.S. DISTRICT COURT JUDGE
16
INDEX OF EXHIBITS
MSI Entity List.
Insiders.
7678753_2
17

2015 03 27 Amended Motion For Approval of Plan of Distribution

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2015 03 27 Amended Motion For Approval of Plan of Distribution

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Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 1 of 8

HOLLAND & HART LLP

SECURITIES AND EXCHANGE

AMENDED MOTION FOR APPROVAL

Judge Bruce S. Jenkins

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 2 of 8

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 3 of 8

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 4 of 8

/s/ Doyle S. Byers

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 5 of 8

Daley, Scott R or Ellen

Lovell, Brett or Emily

Sun Winds, LLC

Sun Winds, LLC

Bailey, Greg B. or Jenny J.

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 6 of 8

Provident Development Group, LLC

Sagewood Capital, LLC

Parkwood Capital, LLC

Dixie Winds, LLC

Circle J Farms Limited Partnership

APS as Admin for the Benefit of Gloria S.

Fotheringham, Bob and Kathy

Colonial Stone Brook Apartment

Thueson, Bryan and Marlynae

Welling, Eric C. and Mary Katherine

McDermott, Eugene and Mary Ann

Nielson, Matthew A and Jill R. etal

Boca Raton, LLC

Boca Raton, LLC TIC Member of the

Wool City, Inc.

Starwood Management Company, Inc.

Jacobson, Brandon W. and April C.

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 7 of 8

Nycom Apartments, LLC

Pheasant Wood, LLC

Douthitt, Sam and Carol

Coutts, Jason W. and Casey J.

Case 2:11-cv-01165-BSJ Document 2377 Filed 03/27/15 Page 8 of 8

Proposed Plan of Distribution (with modification to Article IV, Section 8).

Case 2:11-cv-01165-BSJ Document 2377-1 Filed 03/27/15 Page 1 of 2

Case 2:11-cv-01165-BSJ Document 2377-1 Filed 03/27/15 Page 2 of 2

As of March 25, 2015

Amounts Based on Currently Available Information

Douthitt, Sam and Carol

Case 2:11-cv-01165-BSJ Document 2377-2 Filed 03/27/15 Page 1 of 18

Case 2:11-cv-01165-BSJ Document 2377-2 Filed 03/27/15 Page 2 of 18

HOLLAND & HART LLP

IN THE UNITED STATES DISTRICT COURT

SECURITIES AND EXCHANGE

Judge Bruce S. Jenkins

Case 2:11-cv-01165-BSJ Document 2377-2 Filed 03/27/15 Page 3 of 18

Allowed Claimants shall refer to Claimants with Allowed Claims.

Case 2:11-cv-01165-BSJ Document 2377-2 Filed 03/27/15 Page 4 of 18

Claim shall refer to all of a Claimants purported right(s) to distribution,

Claim Basis Date shall refer to December 31, 2008.

forth in Article V of the Plan.

as classified pursuant to the Plan.

Case 2:11-cv-01165-BSJ Document 2377-2 Filed 03/27/15 Page 5 of 18

Investor shall refer to a person or entity who holds an Investor Claim.

MSI shall refer, individually and collectively, to Management Solutions, Inc.,

Wendell A. Jacobson, Allen R. Jacobson, Parkwood Management, LLC, Starwood Management

Person shall refer to an individual, corporation, partnership, limited liability