Status of the Case

The litigation surrounding Retirement Value has largely ended. The claims by and among the State, Retirement Value, the Receiver, and the various parties involved with Retirement Value have been resolved either by agreement among the parties or by judgments entered by the Court. The completion of the litigation does not mean that the Receivership will end but merely that it will move into a new, less active phase as the Receiver continues to: (i) manage the portfolio of insurance policies for the benefit of the investors; and (ii) collect on the judgments and settlement agreements entered into in the course of litigation.

The State's Claims

The State of Texas filed this case in an effort to end Retirement Value's fraudulent scheme and to recapture as many of the assets taken from the investors as possible. The Court granted the State's motion for partial summary judgment against Retirement Value finding that "Retirement Value engaged in fraud or fraudulent practices in the course of selling unregistered securities" in violation of the Texas Securities Act. The Court ordered Retirement Value to make restitution to the RV investor-victims. While it will not change the total amount of money payable to the investors, the order supports the Plan of Distribution and supports the ability of investors to claim that recoveries from the estate should be treated as the recovery of theft losses for tax purposes.

The State also sued various principals of Retirement Value including Dick Gray, Wendy Rogers, Bruce Collins and Ron James. All of these claims have been resolved by settlement.

The Receiver's Claims

The Receiver has asserted claims against various parties involved with Retirement Value and its fraudulent scheme. He has asserted claims against:

     •     Principals of Retirement Value such as Dick Gray and Wendy Rogers;
     •     Consultants and other affiliated parties such as Ron James and Mike Beste;
     •     The escrow agent, Kiesling Porter Kiesling & Free; and
     •     Licensees such as Michael McDermott and "Doc" Gallagher.

As a result of his efforts, the Receiver has entered into settlement agreements totaling $9.5 million and recovered judgments totaling $6 million.

Four of the licensees (Dan Levin, Salvatore Margaraci, James Poe and Scott Schroeder) against whom the Receiver has judgments filed appeals.  The court of appeals dismissed (Levin Opinion)  Levin’s appeal on the ground that it was not filed on time.  The court of appeals affirmed (Margaraci Opinion)  the judgments against Margaraci and Poe.  The Receiver has moved to dismiss Schroeder’s appeal on the ground that it was not filed on time; however, Schroeder’s appeal is stayed because he filed for bankruptcy.

As of May 31, 2018, the Receiver has recovered approximately $23.1 million for the estate. The Receiver has secured and the Court has approved settlements with various parties totaling approximately $9.5 million, of which $47,000 remains to be funded. In addition, the Receiver has recovered $628,000 on the judgments in his favor. The Receiver has also collected approximately $13 million in non-litigation recoveries.

The Special Receiver's Claims

The Court appointed Janet Mortensen as Special Receiver to investigate and prosecute claims against Wells Fargo. The Special Receiver asserted claims in arbitration against various Wells Fargo entities and employees. The arbitration panel found in favor of the Wells Fargo parties and against the Special Receiver. The Court subsequently entered a judgment confirming the arbitration award and ending the Special Receiver's claims against Wells Fargo. Pleadings related to the Special Receiver's claims are posted on the Related Cases page.

Intervenor's Claims

Several groups of investors intervened in the case to assert claims against Retirement Value and others. The Intervenors and the Receiver agreed to resolve the claims against Retirement Value through an agreed judgment against Retirement Value finding that Retirement Value committed fraud in the sale of securities. The Court entered the agreed judgment in May 2014. The agreed judgment will have no effect on the distribution of funds from the estate to investors or on the amount of any investor's claim.