RECEIVERSHIPS: National Note of Utah, LC

WAYNE KLEIN, RECEIVER FOR
National Note of Utah, LC

10 Exchange Place, 502
Salt Lake City, UT 84111
(801) 456-4591

This site contains updates and filings related to the National Note of Utah Receivership. Updates are posted chronologically with the relevant links. This information is summarized quarterly by the Receiver in a status update to the court. The latest quarterly report can be found here.

Claims Process
Initial Claims Report

Recommended Distribution Plan

Allowed Claims

Reduced Claims

Disallowed Claims

Property Auction and Sale Notices
Expressway Land

Elkhorn Land: Auction Date – 8/30/2016 at 1:00 p.m.

Almond Heights Lots 21 and 22

Current (2016) Events

August 24, 2016: Distribution Plan Proposed. The Receiver filed a motion recommending a distribution plan and an initial distribution to claimants. The Receiver proposes an initial distribution in the amount of $4,500,000. The Receiver recommends distributing allocating $1.5 million to all allowed claimants on a pro-rata basis. The remaining $3.0 million would be distributed to claimants who have received less than 20% of their investment funds from National Note. If approved, this distribution will result in all investors having received a return of at least 20% of their investment principal. Any claimant wishing to object to this distribution plan must file any objections with the Court by September 20, 2016. No distribution can be made until the Court has approved a distribution methodology and the actual payment of funds. Here are links to copies of the Motion, Exhibits A&B, Exhibit C, and Exhibit D.

August 24, 2016: Summary Judgment Granted. The court granted the Receiver’s motion for summary judgment against Joel Blakeslee. The Receiver previously obtained a judgment against the Blakeslee Family Living Trust. Today’s judgment is the last piece of litigation in this matter. A copy of the court order can be found here.

August 24, 2016: Kiang Motion to Intervene. Danny and Barbara Kiang have filed a motion to intervene in the Receivership case. Their motion seeks to permit them to file claims even though the claims deadline has passed. A copy of their motion can be found here.

August 24, 2016: Fee Application Filed. The Receiver filed an application to pay his fees and the fees of his counsel for the three months ending June 30, 2016. A copy of the fee application can be found here.

August 16, 2016: Notice of Auction Results. The Receiver filed a notice with the Court summarizing the results of the public auction of the Fairfield land. The auction resulted in bids approximately $61,000 higher than the original bid. The net sales proceeds were $242,656.49. A copy of the notice can be found here.

August 15, 2016: Motion for Sale of Toquerville Lots at Auction. The Receiver filed a motion today seeking approval to conduct an auction for the sale of the remaining two lots in the Almond Heights subdivision in Toquerville, Utah. The Receiver received a bid of $5,000 for the two lots, which are believed to be unsuitable for building homes. A copy of the motion can be found here.

August 3, 2016: Appeal Filed by Turpin. The law firm of Michelle Turpin, P.C. filed an appeal of the $78,135.37 judgment entered against her on July 5, 2016. A copy of the notice of appeal can be found here.

July 27, 2016: Sale of Elkhorn Property Approved via Auction. The Court today approved the sale of 217 acres of land near Elkhorn Ridge in Oneida County, Idaho (near Malad) at auction. The Receiver has received an initial bid of $240,000 for the property. An auction has been set for Tuesday, August 30 at 1:00 p.m at the property. Anyone wanting to bid at the auction must prequalify by August 23, 2016. For information on how to qualify for the bid, contact the Receiver at 801-456-4591. A copy of the order can be found here.

July 26, 2016: Order Disallowing Claim. The Court entered an order disallowing Claim No. 1128 based on the claimant having received more in distributions than the amount she invested. A copy of the order can be found here. Orders have now been entered on 463 of the 467 claims submitted to the Receiver.

July 26, 2016: Order Allowing Claims. The Court approved the Receiver’s revised motion approving four claims. A copy of the order can be found here.

July 26, 2016: Claim Settlement Approved. The Court approved a settlement agreement with FT Holding Trust—Katana, by which Katana’s claim for $500,000 will be allowed in the amount of $200,000. A copy of the order can be found here.

July 26, 2016: Litigation Settlement Approved. The Court approved a settlement between the Receiver and Fred Myer by which Myer will pay $2,000 to the Receivership Estate. This settlement concludes a lawsuit that had been ongoing for several years and will result in additional money for the receivership estate. A copy of the order can be found here.

July 22, 2016: Motion for Settlement of Claim Objection. The Receiver filed a motion seeking court approval for a settlement of the claim objection of FT Holding Trust-Katana. Katana filed a late claim for $500,000. The Receiver reached agreement to recommend approval of the claim for $200,000. A copy of the motion can be found here.

July 21, 2016: Motion to Approve Litigation Settlement. The Receiver filed a motion today seeking approval for a settlement agreement with Fred Myer. The Receiver alleged Myer was overpaid by $10,708.86. Myer asserted that he was not overpaid because he transferred some of his investment account to another person and did not receive those funds. Rather than continue litigating, where litigation costs might exceed the amount recovered, the Receiver proposes to settle with Myer for $2,000. A copy of the motion can be found here.

July 20, 2016: Motion to Sell Elkhorn Land. The Receiver filed a motion today seeking court approval to sell 217 acres of land near Malad City, Idaho at auction. The Receiver obtained an offer of $240,000 for the land and proposes to hold an auction to see whether any higher offers will be made. A copy of the motion can be found here. A copy of the auction procedures that will apply to the auction can be found here.

July 20, 2016: Status Report Filed. The Receiver filed his status report today for the period of April through June 2016. A copy of the report can be found here.

July 5, 2016: Summary Judgment Awarded Against Turpin. The court issued a ruling in the Receiver’s lawsuit against Michelle Turpin & Associates, granting the Receiver’s summary judgment motion and entering judgment against Turpin’s law firm for $78,135.37. In the ruling, the court found that the legal services provided by Turpin benefitted Wayne Palmer, not National Note. A copy of the ruling can be found here.

June 30, 2016: Summary Judgment Motion Filed on Blakeslee. The Receiver filed a motion for summary judgment in his lawsuit seeking the recovery of $24,689.36 from Joel Blakeslee. The Receiver previously obtained a summary judgment order against the Blakeslee Family Living Trust. This motion seeks recovery from Blakeslee’s individual assets. A copy of the motion can be found here.

June 29, 2016: Notice of Property Sale Results. The Receiver filed a notice describing the results of the sale of the property at Block 2, Lot 1 in the Byron Industrial Park (Minnesota). The net sale proceeds were $34,019.74. A copy of the notice can be found here.

June 28, 2016: Auction of Fairfield Property Approved. The Court issued an order today approving the sale of an 85-acre parcel of land in Fairfield, Utah at an auction. The auction will determine whether any bidders are willing to pay more than the $213,925 offer already made to the Receiver. The Receiver has set an auction date of August 2, 2016 at 9:00 a.m. at the property. A copy of the order can be found here.

June 24, 2016: Motion for Permission to Sell Fairfield Property. The Receiver filed a motion today seeking permission to sell 85 acres of property in Fairfield, Utah at an auction. The Receiver has received an offer of $213,925 for the property and seeks approval to conduct an auction to see if higher bids are received and to sell the property to the highest bidder. A copy of the motion can be found here.

June 14, 2016: Fee Application Approved. Following a hearing, the Court approved the fee application for the Receiver and his counsel for the six month period ending March 31,2016. A copy of the order can be found here.

June 10, 2016: Revised Motion to Allow Four Claims. The Receiver filed a revised motion recommending that four claims be allowed at the amounts of the claim forms. The revisions came after the Court declined to disallow claims where the Receiver had obtained judgments invalidating ABIs granted to these claimants. Thus, these claims were allowed in the amounts of the proof of claim form. A copy of the motion can be found here.

June 10, 2016: Revised Motion to Disallow Claim #1128. The Receiver filed a revised motion, again recommending that claim #1128 be disallowed. The revision came after the Court earlier declined to disallow the claim based on the Receiver having obtained a judgment invalidating the claimant’s ABI. The revised motion seeks disallowance of the claim because the investment account underlying this claim received more in distributions than the amount of investment. A copy of the motion can be found here.

June 8, 2016: Motion with Revised Recommendation for Six Claims. Based on direction given by the Court at a hearing on May 18, 2016, the Receiver has revised his recommendation for certain claims. Today, the Receiver filed a motion seeking to allow six claims, but at amounts lower than the claim amount. The Receiver’s recommendation is that these six claims be allowed for the net principal investment amount of these claimants. A copy of the motion can be found here.

June 8, 2016: Criminal Trial Set. At a hearing today, the judge overseeing the criminal trial of Wayne Palmer and Julieann Palmer Martin set a three-week trial starting May 1, 2017.

June 1, 2016: Order Approving Harvest Time Claim at Reduced Amount. The Court approved the claim of Harvest Time Ministries at an amount lower than the claimed amount. A copy of the order can be found here.

May 31, 2016: Judgment Awarded Against Andreasen. The Court today entered judgment in favor of the receivership against Max Andreasen, Melanie Andreasen, and M&M Andreasen Investments, Inc. in the total amount of $64,031.72. This includes $49,636.99 in overpayments and $14,394.73 in interest. A copy of the judgment can be found here. This judgment concludes this case.

May 25, 2016: Order on Claims by Olson, Shah. The Court issued an order approving claim no. 1402 for L. Shah and deferring a ruling on three other claims by Shah and Olson—because those claims will be affected by the Court’s ruling in a related lawsuit. A copy of the order can be found here.

May 25, 2016: Order Approving Petty Claim at Reduced Amount. The Court approved the claim of G. Petty at an amount lower than the claimed amount. A copy of the order can be found here.

May 25, 2016: Order Setting Pre-Trial Hearing for Claim by FT Holding Trust-Katana. The Court issued an order setting a pre-trial hearing on the claim by FT Holding Trust-Katana. The Receiver recommends disallowing the claim because it was filed three months after the claims deadline. The hearing is set for June 10, 2016. A copy of the order can be found here.

May 24, 2016: Order Deferring Consideration of Claim by Brasher. The Court entered an order deferring a ruling on the objection filed by K. Brasher. The order defers any ruling on the objection while the Court considers separate litigation relating to the validity of assignments of beneficial interest. A copy of the order can be found here.

May 24, 2016: Order Allowing Reduced Claim by Hoggan. The Court entered an order allowing the claim of R. Hoggan in the amount of $97,542.06, not the amount of $175,000.00 claimed by Hoggan. The Court rejected the Receiver’s recommendation that the claim be disallowed entirely. The claim was allowed in the amount of Hoggan’s net principal investment. A copy of the order can be found here.

May 24, 2016: Order Allowing Proffit Claim. The Court entered an order allowing the claim of L. Proffit, rejecting the Receiver’s recommendation that the claim be disallowed. The claim was allowed in the amount of Proffit’s net principal investment. A copy of the order can be found here.

May 24, 2016: Order Disallowing 25 Claims. The Court today entered an order disallowing 25 claims. These were claims that the Receiver recommended be disallowed and where no objections were filed. Separate orders will be entered relating to the other claims that the Receiver recommended be disallowed. A copy of the order can be found here.

May 24, 2016: Order Denying Objection, Approving Claim at Reduced Amount. The Court today entered an order approving the claim of Verl Jensen in the amount of $37,938.64 rather than the claimed amount of $440,000.00. The Court overruled the objection that Jensen filed, ruling that his claim would be allowed only in the amount of his net principal investment. A copy of the order can be found here.

May 24, 2016: Order Allowing 81 Claims at Reduced Amounts. The Court today entered an order approving 81 claims for the claim amounts recommended by the Receiver—namely the amount of net principal investment of each claimant. The Receiver had recommended approving 82 claims at reduced amounts. One objection was filed. This order covers the 81 reduced claim amounts for which no objections were filed. A copy of the order can be found here.

May 17, 2016: Default Judgments Against Federal Financial, Note Funding. The Court today entered default judgments against two companies owned by Victor Wagner, a former employee of National Note. The Receiver’s litigation against Wagner is on hold based on Wagner’s bankruptcy filing. Today’s judgments are for $123,925.00 against Federal Financial Services, LLC and $70,462.26 against Note Funding, Inc. Copies of the judgments can be found here and here.

May 6, 2016: Reply to Claim Objection of Olson, Shah. The Receiver filed his reply to the objection filed by Olson and Shah, in which they oppose the Receiver’s recommendation to deny their claims. The Receiver recommends that the Court find that Olson and Shah’s continued reliance on assignments of beneficial interest that they hold disqualify them from also seeking recovery from funds that have been recovered. A copy of the Receiver’s reply can be found here.

May 6, 2016: Motion for Sale of Expressway Property. The Receiver filed a motion today recommending to the Court three options for selling the Expressway Business Park property in Spanish Fork, Utah. The first option would be to accept a cash offer of $250,000, which would net the Receivership about $25,000 after paying accrued property taxes and closing costs. The second option would be to accept an offer for the appraised value of $1.25 million, but where the buyer will have eight years to pay the full purchase price. The third option would be for a joint venture between the Receivership and a developer where the Receivership would receive 40% of the net proceeds from development of the property over the next ten years. The Receiver is recommending option #2. A copy of the motion can be found here.

May 5, 2016: Response to Katana Objection. The Receiver filed a response today to the claim objection by FT Holding Trust—Katana. The Receiver argues that Katana’s claim should be denied because it was filed almost four months after the claims deadline and that adequate notice was given to Katana of the claims process. A copy of the Receiver’s response can be found here.

May 2, 2016: Fee Application Filed. The Receiver filed a fee application today seeking approval for fees and expenses for the six month period from October 2015 to March 2016. A copy of the application can be found here.

April 29, 2016: Status Report Filed. The Receiver filed the quarterly status report for the period ending March 31, 2016. A copy of the report can be found here.

April 26, 2016: Summary Judgment Granted Against Andreasen. The Court today granted the Receiver’s motion for summary judgment against Max and Melanie Andreasen. The Court found that the excess profits paid to M&M Andreasen Investments, Inc. were paid to Max and Melanie Andreasen and therefore must be repaid to the Receiver. A copy of the ruling can be found here.

April 12, 2016 Notice of Sale Results. The Receiver filed a notice containing a summary of the results of the public sale of five industrial lots in Byron, Minnesota. The net proceeds from the sale were $270,963.57. A copy of the notice can be found here.

April 12, 2016: Motion to Disallow Late Claim (McCullough). The Receiver filed a motion today seeking to disallow a claim filed after the Initial Claims Report was filed with the Court. The Receiver’s motion noted that the new claim was filed four months after the claims deadline and recommends that the Court disallow this claim. A copy of the motion can be found here.

April 11, 2016: Report on Disallowed Claim Recommendations. The Receiver filed a report today on the status of claims where he recommended that the claims be disallowed. The report notes that no objections were filed for 36 of the 46 claims which the Receiver recommended be disallowed and asks the Court to enter an order disallowing these 36 claims. The Receiver will file separate responses with the Court regarding the ten claims where objections were filed. In addition, the report notes that one additional claim was filed after the Initial Claims Report and indicates that the Receiver will file a separate motion seeking disallowance of that claim. A copy of the report can be found here.

April 11, 2016: Receiver’s Response to Objection on Reduced Claim. The Receiver filed his response to the one objection that was filed opposing the recommendations that claims be approved at reduced amounts. In the response, the Receiver argues that since National Note has been found to have been operating as a Ponzi scheme, the claim should be allowed in the amount of net principal losses—$37,938.64—instead of the $440,000 sought in the claim. A copy of the response can be found here.

April 11, 2016: Report on Reduced Claim Recommendations. The Receiver filed a report today on the status of claims where a reduced amount was recommended by the Receiver. The report notes that no objections were filed for 81 of the 82 claims for which the Receiver recommended reduced claim amounts and asks the Court to enter an order allowing these 81 claims at the amounts recommended by the Receiver. The Receiver will file a separate response with the Court regarding the claim where an objection was filed. A copy of the report can be found here.

April 11, 2016: Order Approving Receiver’s Motion on Allowed Claims. The Court issued an order today approving the recommended claim amounts for 133 claimants with approved claim amounts and 205 claimants who had stipulated to reduced claim amounts. The Court found that none of the 338 claimants filed objections and therefore approved the Receiver’s recommendations. A copy of the Court order can be viewed here.

April 11, 2016: Auction Approved for Minnesota Property. The Court signed an order approving the sale of Block 2, Lot 1 in Byron Minnesota at auction. The Receiver has obtained an initial bid of $280,000 and set an auction date of May 24, 2016 at 9:00. If no other bidders qualify for bidding before the auction, the auction will be canceled and the property will be sold to the initial bidder. A copy of the order can be found here.

April 4, 2016: Motion for Sale of Minnesota Property. The Receiver filed a motion seeking court approval to sell a plot of industrial land in Minnesota at public auction. The Receiver has an offer of $280,000 and intends to hold an auction to see if any other higher bids are offered. A copy of the motion can be found here.

March 16, 2016: Toquerville Property Sale Approved. The Court approved the sale of Lot A-2 in Toquerville, Utah to Rural Housing Development Corporation. A copy of the order can be found here.

March 16, 2016: Settlements Approved. The Court today approved settlements with Kim Colin and The Church of Jesus Christ of Latter-day Saints. A copy of the order approving the settlements can be found here.

March 15, 2016: Motion to Approve Settlements. The Receiver filed a motion seeking court approval of two settlements he has recently reached. One will release $103,000 from the real estate holding account, with $50,000 being paid to the holder of liens on receivership real estate. The second will result in the return of $210,000 in religious contributions that Palmer made since 1998. A copy of the motion can be found here.

March 14, 2016: Motion to Disallow Claims. The Receiver filed a motion recommending that 46 of the claims filed in the claims process be disallowed. These claims asserted a total of $6,508,798.29 in claims. A copy of the motion can be found here. Any claimant whose claim is being recommended for disallowance who wants to object to the Receiver’s recommendation must file an objection with the court by April 8, 2016.

March 14, 2016: Motion to Approve Recommendation for Allowed Claims at Reduced Amounts. The Receiver filed a motion today recommending that the Court allow 82 claims as allowed claims, but in amounts less than the amount asserted by the claimants in their Proofs of Claim. The Receiver is recommending the reductions based on his belief the claimants inflated the amount they sent to National Note, seek recovery for interest that was promised, did not deduct distributions received, seek recovery for net profit interests in ore, seek recovery for higher values of precious metals, or are vendors who are not owed as much as they claim. A copy of the motion can be found here. A copy of the motion and the claim report will also be sent to each claimant affected by this motion. Any claimant whose claim is being recommended for allowance at reduced amounts who wants to object to the Receiver’s recommendation must file an objection with the court by April 8, 2016.

March 14, 2016: Judgment on McDonald. The court entered a judgment against Analee McDonald in the amount of $8,500 plus costs and fees incurred by the Receiver in collecting on the judgment. McDonald had previously entered into a settlement agreement with the Receiver, but had failed to make all payments required by the settlement, resulting in the Receiver seeking this judgment. A copy of the judgment can be found here.

March 14, 2016: Fee Application Approved. The court approved the fee application for the Receiver and his counsel for their work from July to September 2015. At the request of the judge, additional deductions were made in the fee application and the order reflects those deductions. A copy of the order can be found here.

March 11, 2016: Notice that Claim Amount is Not Amount that will be Paid. The Receiver filed a notice with the Court to clarify that the Receiver has only recovered sufficient funds to pay a portion of allowed claims and that a distribution plan will be proposed at a later date regarding how the recovered funds should be distributed to claimants. The Receiver will be sending a copy of the notice to all claimants where the Receiver is recommending that the claims be allowed in the amount claimed or where claimants have accepted the Receiver’s recommendation. A copy of the notice can be found here. This caution is applicable to all approved claims.

March 4, 2015: Motion to Approve Allowed Claims. The Receiver filed a motion today seeking Court approval of the 133 claims that the Receiver is recommending be approved at the full amount of the claims (for a total of $13,354,795.26) and an additional 205 claims that the Receiver is recommending be approved in amounts less than the original claim, but where the claimants have agreed to accept the lower amount being recommended by the Receiver ($23,202,520.67). A copy of the motion can be found here. Motions will be filed in the coming days on other categories of claims where the receiver is recommending that claims be allowed at reduced amounts or disallowed. Any claimants whose claims are being recommended to be allowed in today’s motion have a deadline of April 1, 2016 if they want to object to the Receiver’s recommendation.

March 4, 2016: Report on Claims Process Filed. The Receiver filed his report today on the claims process. The report summarizes the 466 claims submitted to the Receiver. These submissions asserted claims for $67 million. The Receiver is recommending that 420 of these claims be allowed in the total amount of approximately $45 million. Exhibits to the report list the Receiver’s recommendations for each claim. A copy of the report can be found here. The Receiver will be filing motions in the next few days asking the Court to approve his recommendations for each group of claims. The motions explain what a claimant must do if the claimant wants to object to the receiver’s recommendation. The Receiver will be sending copies of the report and motion to each claimant.

February 16, 2016: Motion to Sell Minnesota Property. The Receiver filed a motion today seeking Court permission to hold an auction to determine whether any buyer is willing to pay more than $448,300 for five industrial lots in Minnesota. If no bidders at auction offer to pay more than $448,300, the Receiver seeks permission to accept an offer to purchase the property for $448,300. A copy of the motion can be found here.

February 13, 2016: Minnesota Property Sale Approved. The Court approved the Receiver’s motion to sell five industrial lots in Minnesota for $448,300, subject to getting higher bids at a public auction. The auction is set for March 29, 2015. Any persons interested in submitting a higher bid for these lots is invited to contact the Receiver. A copy of the order can be found here.

February 11, 2016: ABI Default Granted. The Court entered an order today granting a default judgment against Michael Walden. The judgment declares the assignment of beneficial interest granted to Walden void. Out of the 349 ABIs in existence when the Receiver was appointed, only six remain that have not been released or declared invalid. A copy of the Court’s order can be found here.

February 10, 2016: Motion to Sell Toquerville Property. The Receiver filed a motion seeking approval to sell a 5-acre parcel of property in Toquerville, Utah for $148,200. This represents 95% of the appraised value. Notice of the proposed sale will be published in the newspaper. Higher bids are encouraged. A copy of the motion can be found here.

February 9, 2016: Property Sale Approved. The Court signed an order today approving the sale of five residential building lots in Toquerville, Utah. A copy of the order can be found here.

February 4, 2016: Judgment Entered. The Court entered a judgment against Secure American Gold Exchange, LLC (SAGE) in the amount of $112,000. The judgment was entered after SAGE agreed to entry of the judgment. The Receiver will seek to recover funds from the assets of SAGE. A copy of the judgment can be found here.

January 26, 2016: Judgment Entered Against Slaughter. The Court entered judgment for the Receiver today against Carol Slaughter in the amount of $104,254.33, which includes $18,800.05 in prejudgment interest. A copy of the order can be found here.

January 25, 2016: Status Report Filed. The status report covering the period of October to December 2015 was filed today. A copy of the report can be found here.

January 15, 2016: ABI Judgment. The Court today entered a default judgment against Michael Bryant, declaring the assignment of beneficial interest recorded for him on the Expressway property to be void. A copy of the judgment can be found here.

January 15, 2016: Property Sale Approved. The Court issued an order approving the sale of two residential building lots in Toquerville, Utah. A copy of the order can be found here.

January 8, 2016: Notice of Sale Results: Ogden. The Receiver filed a notice describing the results of the sale of the Ogden office building. After paying eight years of property taxes and closing costs, the 49.2% share of the building owned by the Receivership netted $241,836.67 to the Receivership Estate. A copy of the notice can be found here.

January 5, 2016: Publication of Notice of Sale of Almond Heights Lots. The Court today approved the publication of notice of the planned sale of 5 lots in the Almond Heights area of Toquerville, Utah. The Court also set a hearing on the Receiver’s motion to sell the property for February 8, 2016 at 1:30 p.m. A copy of the order can be found here.