Have you heard of the National Association of Federal Equity Receivers (NAFER)? If you are an insolvency/restructuring professional, you need to know about it (you could start by looking at www.nafer.org).
When we first learned of NAFER, we were somewhat skeptical of the need for yet another organization in the space. Our skepticism has turned to fandom, however, as a result of our attendance at the NAFER fourth annual conference recently held in San Diego.
For those readers who do not know, a federal receivership is an equitable remedy employed to protect the interests of persons and entities harmed or potentially harmed by a business or property that is subject to federal jurisdiction. Federal district courts appoint federal receivers at the request of harmed persons (like creditors or defrauded parties) or of federal regulatory entities, like the Securities and Exchange Commission or the Federal Trade Commission, which represent the diffuse interests of people protected by federal laws and regulations.
The federal receivership remedy is not well known even among insolvency professionals – though it has grown in use in recent years and we anticipate that its use will continue to grow. A federal receiver can quickly and efficiently gain control over a defaulting or fraudulent business in order to maximize returns to the receivership’s beneficiaries. Federal receiverships are often imposed on businesses that engaged in Ponzi schemes and other securities fraud. (Editor’s Note: For an in-depth discussion of federal equity receiverships, we recommend this webinar from the expert faculty of Financial Poise Webinars.)
Everything about the NAFER conference was excellent. From the choice of venue (the city, hotel, and even specific rooms in the hotel) to the substantive content, our reporters were impressed with the execution of the event. The audience at the three day conference- about 185 people- was composed largely of receivers and professionals who represent receivers.
The Judges Panel, moderated by Robert Mosier (Mosier & Company), included the Hon. Ann D. Montgomery (United States District Court, District of Minnesota); Hon. David O. Nuffer (Chief Judge, District of Utah); and Hon. Christopher A. Boyko (Unites States District Judge, Northern District of Ohio). With wit and wisdom the panel discussed, among other things, the infamous Petters fraud in Minnesota. Judge Montgomery appointed and supervised the federal receiver in that matter, who was Doug Kelly, who himself was in the audience.
An entire panel was devoted to advanced fraudulent transfer issues in connection with such receiverships, which recalled many of the issues confronted by Irving Picard as trustee of the Madoff estate (e.g., what can be clawed back from “winners”? should “net losers” be sued?), and which may arise in federal receiverships initiated by secured creditors over a defaulting borrower. Efforts to resolve Ponzi schemes and other far-flung matters in federal receiverships are helped in that, unlike receiverships under state law, federal receiverships can operate nationally. Gianliuca Morello (Wiand Guerra King, Tampa FL) and panelists Robert Wing (Ray Quinney & Nebeker, Salt Lake City), Gil Miller (Rocky Mountain Advisory, Salt Lake City), and John Berry (Trial Counsel, Div. of Enforcement, LA. Regional Office, SEC) all did a bang up job on this panel.
Other panels included:
The Keynote was delivered by Martin S, Kenney, of Martin Kenney & Company Solicitors of the British Virgin Islands, who provided exciting tales of search and capture of assets located in foreign jurisdictions by the canniest of malefactors, but who also emphasized non-swashbuckling aspects of preparing legal strategies for such efforts.
We found the written conference materials to be ample, pertinent, and well-organized. That they were downloadable from an app provided by NAFER underscored the practical and problem-solving spirit that the context of the work of a receiver requires. Kudos to NAFER President, Ira Bodenstein (of Shaw Fishman Glantz & Towbin LLC), Conference Chair Robert Mosier, and NAFER Executive Director, Maureen Whalen (of MCorr Consulting) for their great work in putting together such a lively and highly substantive conference.
The editors and editorial board of DailyDAC include preeminent restructuring and insolvency professionals, journalists, and editors. They are devoted to providing reliable and plain English education and deal intelligence about assignments, corporate bankruptcy, receiverships, out-of-court workouts an similar topics.
Review of the NAFER 2018 Annual Conference in Chicago
NAFER 2017 Annual Conference: The Biggest and Best So Far!
NAFER 2017 Annual Conference [Oct. 18-20]: Miami, and a Ponzi Schemer Speaks!
90 Second Lesson: Bankruptcy vs Receivership
Platinum Partners: A Ponzi Scheme Hiding in Plain Sight
CONFERENCE REVIEW: NAFER Fifth Annual Conference, Washington D.C, Oct. 13-15, 2016
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