A SSH student's legal fantasy?

[fry]

Posted by a former SSH student regarding retaining a attorney:

 

...certain lawyers are better than others at finding hidden assets and such. The idea is also to try to show the Jerry ran his company into the ground, probably paying himself millions, which was guarenteed to leave us screwed. That would open Jerry's property and other assets open to be sold to pay back creditors, along with whoever else got an outragious salary.

 

Think about it, they went from something like $78 million in profits to bankrupt in about 6 months. Something is NOT right.

 

Also, by proving there were fraudulent intents on the parts of SSH and the student loan companies, it would make the loans null and void.

 

Apparently Wells Fargo and another bank was asked to sell student loans but they turned down the offer because they smelled something fishy.

 

But personally, I think $800 for a shot at this is better than doing nothing. $800 isn't THAT much.

 

A response:

 

As far as “finding hidden assets and such” goes, that’s the job of the bankruptcy trustee. It is not likely that an attorney representing a student or students is going to get involved in that. Besides, even if attorneys for individual unsecured creditors did that sort of thing whatever they might find would benefit all the unsecured creditors equally. So why pay for something that other unsecured creditors with more money (e.g., Robinson) would do if it would actually result in any benefit…which it won’t so they won’t.

 

Regarding “Jerry ran his company into the ground, probably paying himself millions, which was guarenteed to leave us screwed”, yes, of course he did that. But it is not necessarily illegal and it probably does not “open Jerry's property and other assets open to be sold to pay back creditors”.

 

For the sake of discussion, Jerry’s lawyers will argue that the students’ advanced loan funds were spent in trying to grow a business that would provide jobs to new CFIs and to pursue business opportunities that would provide jobs in commercial helicopter operations. They will say that the students signed on with SSH knowing this and also knowing that no jobs were guaranteed. But they signed SSH’s contract and allowed their loan funds to be advanced because they believed that they would have a better chance at a job as a CFI at SSH because of it size than at a smaller school. And in fact, SSH did provide such jobs until it went belly up. It was just unfortunate that the company went broke but, hey, that’s business. Companies go bust everyday.

 

Jerry probably did pay himself millions but, that is not illegal and is likely not actionable in a civil suit. SSH was a private company; he could pay himself anything he wanted. As long as he paid the income taxes there is probably nothing that can be done about that. (And you can forget about pursuing “whoever else got an outragious salary”. That could never be proven and no attorney would even attempt it.)

 

As far a proving fraud by the lenders goes, it would be a long and expensive legal battle. And since the attorneys are being paid only by the students…i.e., there will be no big damages awards…there is not much chance the students can outspend the lenders.

 

The students can rage about the injustice of it all but at the end of the day they signed the contract and loan agreement. It must be assumed that they read and understood the terms...and the implications. Specifically, that their money was going to be advanced to the company without any security and that there were no restrictions on what the company could spend that money on.

 

So before you spend money on lawyers who are saying they will sue everyone in sight ask them how they would address the arguments above. (And $800 is not going to go far for attorneys who charge $350 an hour so you might as well just throw that money in the crapper.)

[fry]

Posted at another forum board:

 

From a newspaper piece on 2/19:

 

Building A Case Of Fraud

 

"As of Feb. 17, I've talked to more than 1,000 students or student instructors," Reed said. "On Feb. 1, only two days before closing its facilities at 5 p.m., Silver State withdrew $23,300 from 90 student's tuition accounts. That's nearly $2.1 million. We'd like to know what those funds were used for. Keep in mind, that's only 90 students' tuition funds withdrawn on that one day; the overall damage is far greater.

 

"Do you think on Friday, Feb. 1, the company didn't have Chapter 7 papers ready to go? We intend to file a class-action lawsuit against Silver State and Eos for fraud, breech of contract and other causes of actions. By mid-March, we'll move to get Silver State out of Chapter 7. If that's granted, we'll file suit immediately."

 

According to the schedules of assets and liabilities filed by SSH yesterday with the bankruptcy court the company has on hand about $2.6 million of cash. That would be the cash from that February 1st disbursement. The disbursements were probably on auto-pilot for the first of the month. The cash is still there and can be refunded. No fraud, no case. You're done Reed.

[Mr. Will Hellme]

You are right. I shouldn't go telling people to STFU. Thats me and a bottle of hornitos. Sorry. But it isn't all legal fantasy. Some of it's fact.

 

connect the dots

 

http://www.votegibbonsout.blogs.com/

 

The first paragraph on the NY times is the important part.... Prominent republican fund raiser

http://www.nytimes.com/2008/02/13/us/13vegas.html?ref=us

 

Then there is Sam

http://www.kvbc.com/Global/story.asp?S=7839745

 

Now think back to the NY times article. If he spent my tuition and the tuition of 2700 student on his bid for sheriff, what stopped him from giving to his other republican buddies?

 

More on America's worst governor

http://www.msnbc.msn.com/id/21134540/vp/18046265#18046265 Check the video here: http://www.msnbc.msn.com/id/21134540/vp/18046265#18046265

 

Then there is this one... YOU guys will LOVE THIS ONE

http://www.airolahelicopters.com/

 

Look who owns the Airola Helicopters domain:

http://www.networksolutions.com/whois/resu...helicopters.com

 

Silver State?!?! WTF

Look when it was updated.

 

I have many facts at my finger tips that I cannot discuss here. Only public info. But given what myself and some others know. This is not just legal fantasy.

 

Again fry,

Sorry. I shall try to refrain from drinking and posting. Alas old habits die hard.

Edited February 21, 2008 by Mr. Will Hellme

[Fiasco]

Wow fry,

You should STFU But you need to STFU.

 

Please save telling other members to STFU for Just Helicopters. m'kay?

[TheLorax]

seriously. and, you didn't even take the time to type it out? how can anyone even take you seriously ms. will?

[Tenacious T]

As much as I hope Fry is wrong he has turned out to be right about a lot of things over time, personally I hope he does not "STFU".

[fry]

I would think that a concern of the students should be that their issue is going to fade in the public's...and the public officals'...mind as time goes by. And time is going by quickly...the press is already moving on to other things.

 

The last...actually still current...bankruptcy case that Airola was involved in, in Utah, was filed in 2004 and comes to trial this June. Those folks are still trying to get back $3.5 million.

 

Toiling in the depths of the legal system with a three-man firm from Utah doesn't seem to me to be the way to go after this guy. What's more likely to generate some action, a criminal fraud suit by the US Attorney or a civil fraud suit filed by some guy who was an insurance salesman six months ago?

 

This case is big enough (plaintiffs in 15 states) and involves enough interesting players (a wannbe Las Vegas Sheriff candidate with political connections to the Governor; a NY investment firm; a Dallas asset lender; and, multiple large student loan lenders) that some politician is going to want to get his face in the news by supporting the students' cause. They just have to find him.

 

Start with this guy, he's sponsoring the College Consumer's Bill of Rights in the US Congress, but an even better target would be your local representative to the US House.

 

Students and parents who take out loans to pay for college deserve a College Consumer’s Bill of Rights, said U.S. Rep. George Miller (D-CA) today.

Tomorrow, the U.S. House of Representatives is voting on legislation (H.R. 4137) to make college more affordable and accessible for all qualified students. The legislation includes a number of key consumer protections for student and parent borrowers. Together these protections form a Bill of Rights for college consumers, said Miller, the chairman of the House education committee and sponsor of the legislation.

 

http://www.house.gov/apps/list/speech/e ... 20608.html

 

Contact him. Our country needs an educated workforce and that includes vocational training as well as traditional college programs. But people trying to do better for themselves and their families should not be preyed upon by unscrupulous school operators and greedy lenders. The College Consumer's Bill of Rights should apply to vocational school students too. Contact him and tell him your story. Ask him to urge the US Bankruptcy Trustee to appoint an attorney to represent the students as a creditor class in Silver State Helicopter bankruptcy proceedings. Here's his contact information:

 

Honorable George Miller

U.S. House of Representatives

2205 Rayburn House Office Building

Washington, DC 20515

 

If you're in Southern California drop it off personally at one of his District offices:

 

http://georgemiller.house.gov/contactus/

[Mr. Will Hellme]

Fry,

Thanks for the waring about Dan Reed

Not many of us are going to be jumping in bed with Dan Reed. A few signed on but, They were the people who probably didn't do a ton of research on the matter. Most of us have been more methodical about the matter. Every attorney I spoke with told me that I wanted a bankruptcy attorney out of NV.

 

Furthermore, it does not appear that he specializes in bankruptcy. His $500 fee does not cover any work that might be done by different people in the firm. That work runs from $200-$325 per hour. Oh yea and it appears that they can change the terms of the agreement at anytime. Furthermore his site appears to have been set up in Nov, yet every link is under construction. Currently all you see is silver state info. Anyone else find that fishy? You can find this info here: danreedlaw.com

 

It appears that most all of the CA schools are going with a bankruptcy attorney in LA. Same with Tacoma. TX is going lone star and staying with a firm out there. AZ is unknown. And the lucky jerks in Idaho are getting represented by the state's attorney general. I received a letter from the CA attorney general basically saying, try to get the loan discharged (Which will be a pain as I thought the loan I was getting was a student loan. It's a consumer loan), and get a lawyer. Hopefully there are not many out there who are running around like chickens with their heads cut off.

 

SSH Alumni has been instructed to contact:

State Attorney General, Attorney General of NV

US Attorney General

The Governor of NV (Although he appears to be a cook)

The Governator or Governor of student's school

States Senator

Local Congressman

FBI

BBB

 

Again thanks for your concern.... Again, sorry for telling you to STFU.... But I do like hornitos. The fact that you posted the about contacting Mr. Miller info shows the content of your character. Thanks man.

[fry]

Don't overlook contacting your representative to the US House...he/she is local so you can get access and is federal which is where this case should go.

 

It appears that an issue that may be a point of contention at the bankruptcy hearing is the status of the $2 million plus of student loan funds that was drawn down by SSH on February 1st just before the February 4th bankruptcy filing. The cash is apparently still in SSH's bank account but...here's the issue..., can it be refunded to the students' accounts from which it was drawn or is it part of the assets of the debtor's bankruptcy estate and available for distribution to all unsecured creditors?

 

Even in its last act as an operating company SSH managed to screw somebody. Someone should write a book about this...it's all just so freakin obscene.

[500E]

I f you have any money left in your loan account write that letter to loan Co pointing out that the SSh is in chapter 7 and don't pay any further draw downs, remember you are liable for your loan.

If you tell them what is going on in writing with proof of delivery and the worst happens and they do pay by some Mistake you at least have a case in court to reclaim