Kelly & Ron Van Den Heuvel’s Bank Fraud Trial Begins OCT. 23, 2017; ALSO, Latest MUST READ Scathing Filings In Green Box NA Green Bay’s Bankruptcy Case: “[Their] Greatest Wish Is That The SEC & Other Governmental Agencies Would Go Away.”; PLUS, Ron’s On/Off-Again Counsel Ty Willihnganz Facing Pending Decision In Office Of Lawyer Regulation Discipline; BONUS, More Incinerator Schemes Linked To Abdul Latif Mahjoob & American Renewable Technologies Inc. Identified; NEW! Latest Filings From Mahjoob’s American Combustion Technologies Of California Inc. / ACTI Fraud Suit

 

04/11/2017 UPDATE: 

The trial date for a De Pereman and his wife accused of bank fraud has been pushed back again.

Ron Van Den Heuvel and Kelly Yessman Van Den Heuvel were scheduled to go on trial July 31, but at a hearing Tuesday, that was pushed back to [October, 23, 2017].

They are accused of bank fraud for allegedly illegally arranging a series of loans regarding the operations for a company known as Green Box [NA].

Their former banker, Paul Piikkila, agreed to plead guilty and testify against the Van Den Heuvels. His sentencing has not been set.

The federal indictment alleges that Piikkila, a loan officer at Horicon Bank in Appleton, approved a series of loans totaling more than $1 million. The indictment says Horicon Bank had told Piikkila not to loan any money to Van Den Heuvel, so none of the loans mentioned in the indictment were written to him by name. The couple has pleaded not guilty.

 

Ron Van Den Heuvel and Kelly Yessman Van Den Heuvel’s trials were pushed back Tuesday from July 31 to October 23.

The Van Den Heuvels are accused of illegally arranging a series of loans in connection with their business, Green Box [NA].

Paul Piikkila, the Van Den Heuvel’s former banker, has agreed to plead guilty and testify against the couple.

According to the federal indictment, Piikkila approved a series of loans for the Van Den Heuvels when he was a loan officer with Appleton’s Horicon Bank location.  

Bank management reportedly told Piikkila not to approve loans for the Van Den Heuvels so they were made out in other names.



A new trial date has been set for a businessman & his wife charged with fraud.

Ron Van Den Heuvel and Kelly Yessman Van Den Heuvel are now scheduled to stand trial July 31, [2017,] according to court records.

They are accused of bank fraud for allegedly illegally arranging a series of loans.

Their former banker, Paul Piikkila agreed to plead guilty and testify against the Van Den Heuvels. His sentencing has not been set.

The federal indictment alleges that Piikkila, a loan officer at Horicon Bank in Appleton, approved a series of loans totaling more than $1 million. The indictment says Horicon Bank had told Piikkila not to loan any money to Van Den Heuvel, so none of the loans mentioned in the indictment were written to him by name. The couple has pleaded not guilty.

 

Here are the latest updates and documents from PACER regarding U.S. District Court, Eastern Wisconsin, Docket No. 16-CR-64, United States of America v. Ronald H. Van Den Heuvel, Paul J. Piikkila, and Kelly Y. Van Den Heuvel:

  • TELEPHONE STATUS CONFERENCE (COUNSEL ONLY) set for December 21, 2016 at 10:00 A.M. before Magistrate Judge David E. Jones.
  • November 16, 2016 Court MinutesU.S. District Court, Eastern Wisconsin, Docket No. 16-CR-64, United States of America v. Ronald H. Van Den Heuvel, Paul Piikkila, and Kelly Van Den Heuvel

Atty Sanders appears by phone to make sure his appearance isn’t necessary for conference today. Court confirms his participation is not necessary and excuses Atty Sanders from today’s hearing.

Atty LeBell:

– indicated he is not sure if his appointment is appropriate based on recent sealed hearing had with Judge Griesbach [on October 26, 2016]

– was informed to not deal with anything other than CJA [Criminal Justice Act] issue until hear from Judge Griesbach – to date, have not heard back

– will need to clarify with Judge Griesbach after today’s hearing

Govt:

– all material not related to Brown County search warrant has been produced – about 23,000 pgs

– Brown County search warrant material – about 315,000 pgs – two-thirds has been produced

– will have all material produced no later than 12/16

– has to go to outside vendor and due to volume, has been rolling production instead of all in one batch

– at least half are bank records – about 10,000 pgs or less that are pertinent has been produced for awhile

– feel this volume of material should not result in long delay

– do have material from search warrant that will be used in case

– would like case to move quicker – ask to recommend to Judge Griesbach to set trial date – or can file motion

Court suggests:

Motions due: 4/7/17; Responses due: 4/21/17; Replies due: 4/28/17

Atty Porter:

– client is interested in clearing her name as soon as possible

– first hearing about setting of a trial date – had other discussions with Govt but this did not come up

– encourage parties discuss dates – if his client is going to trial, will be serious motions filed and already have a very busy March/April calendar so don’t know these dates will be realistic

– want enough time to be prepared

– strongly object to setting trial date at this time

Atty LeBell:

– feel case has been in hands of Govt for some time

– easy to simplify things, but different from defense perspective

– his client’s situation, need to use program – would require [Criminal Justice Act] approval, which takes time and the cost, need for firewall etc – haven’t had physical ability to review materials – not because haven’t had time

– would also object to setting a trial date at this point – also anticipate serious motions will need to be filed

– suggest parties discuss and come up with proposal instead of just setting dates

– feel June date is not realistic and asks this court to reiterate to Judge Griesbach the extra time needed for CJA approval etc

Court:

– understand what parties are saying so suggest June date for motions and possible August date for trial

– encourage parties to discuss right now if August will work and will go back on the record in 5 minutes

Court resumes.

Govt:

– defense has suggested some dates and Govt does not object

Atty Porter:

– suggest 6/5/17 date for motions; 30 days for response; 14 days for replies; trial date on or after 9/11/17 (2 wks)

– suggest status conference week of 12/19 to confirm balance of discovery has been done and to resolve any remaining issues in regards to Atty LeBell’s appointment

Court:

– will talk to Judge Griesbach about proposed dates and then will issue an order with motions dates

 

  • NOTICE OF HEARING as to Ronald H. Van Den Heuvel, Kelly Yessman Van Den Heuvel. Final Pretrial Conference set for 7/21/2017 10:30 AM and Jury Trial set for 7/31/2017 08:30 AM, both to be held in Courtroom 201, 125 S. Jefferson St., Green Bay, WI 54301 before Chief Judge William C. Griesbach. All plea negotiations are expected to be completed and written plea agreements filed by the time of the final pretrial conference. Due to the inconvenience to jurors and the unnecessary work for the court and its staff resulting from last minute settlements, the court reserves its right to deny any reduction in the offense level for acceptance of responsibility with respect to any plea agreements entered after that time.

 

  • TEXT ONLY ORDER signed by Magistrate Judge David E. Jones on 11/17/16. Judge Griesbach has scheduled this matter for trial on 7/31/17, with a final pretrial conference on 7/21/17. The parties are ORDERED to meet and confer and to submit a proposed pretrial motions schedule. The proposed schedule shall be submitted to the Court on or before 11/30/16.

____________________

 

UPDATE: Two additional hearings are now scheduled for the Green Box NA Green Bay LLC Chapter 11 Bankruptcy Case, Docket No. 16-24179-beh, U. S. Bankruptcy Court, Wisconsin Eastern District: 

  • December 1, 2016 Telephone Hearing at 2 P.M. regarding Jairo Huilar’s Application for Administrative Expenses (related to Brown Co. Case No. 2016SC4089)
  • December 22, 2016 Hearing for 1 P.M. in Milwaukee, WI, U.S. Courthouse, Rm 149, regarding Approval of Green Box NA Green Bay LLC’s 2nd Amended Disclosure Statement and Plan (due December 5, 2016)

 

Here are the latest documents from PACER regarding U.S. Bankruptcy Court, Wisconsin Eastern District Docket No. 16-24179-beh, Chapter 11, Green Box NA Green Bay LLC:

The Debtor’s Plan is no plan at all but a wish, and its greatest wish is that the SEC and other governmental agencies would go away. The Plan purports to discharge the Debtor in contravention of Section 1141(d)(3)(A) and enjoin actions against the Debtor and non-debtors that would impermissibly restrict the SEC from pursuing actions for violations of the federal securities laws.

The SEC is aware that some of these issues may constitute objections to confirmation of the Plan. To avoid the potential waste of time and resources involved in distribution and solicitation with respect to an unconfirmable plan, it is appropriate to raise these objections to the Plan at the disclosure stage of the case. A court may disapprove a disclosure statement if the plan, on its face, does not meet the confirmation standards of Chapter 11. …

The Commission objects to approval of the Disclosure Statement because it describes a Plan that cannot be confirmed because it includes a provision that would permanently enjoin actions against the Debtor and non-debtor third parties in contravention of Section 524(e) of the Bankruptcy Code and the controlling law of the Seventh Circuit. Section 524(e) of the Bankruptcy Code provides that only debts of the debtor are affected by the Chapter 11 discharge provisions. Yet, the Plan includes a broad injunction that would benefit non-debtors from the Debtor’s bankruptcy by effectively obtaining their own discharges with respect to claims arising from past wrongdoing or negligence and estop the SEC from pursuing actions for violations of the federal securities laws. In addition, the Plan purports to discharge the Debtor in contravention of Sections 1141 of the Bankruptcy Code. Since the Debtor has proposed a liquidating plan, under Section 1141(d)(3)(A), [GBNAGB] is not entitled to a discharge. …

I. The SEC is Investigating Whether Ronald Van Den Heuvel or the Green Box-related Entities Violated the Federal Securities Laws.

The SEC is currently investigating whether Ronald Van Den Heuvel, entities he founded or operated, or their officers, directors, owners, or employees, violated the antifraud provisions of the federal securities laws. The Commission is examining, among other things, whether Van Den Heuvel or others, including RTS and [GBNAGB], made misrepresentations to investors in the course of securities offerings, and whether money raised through offerings was misused. Part of this inquiry focuses on whether Van Den Heuvel and his companies, including RTS and [GBNAGB], followed corporate formalities, or if they commingled the assets and liabilities of the various entities. …

Van Den Heuvel has been involved in several securities offerings relating to his “Green Box” paper-recycling process since 2012. [GBNAGB] and its parent company, Environmental Advanced Reclamation Technology HQ, LLC (“EARTH,” a/k/a Reclamation Technology Systems, LLC (“RTS”)) [f/k/a  Nature’s Choice Tissue, LLC, formed in 2011], appear to be responsible for one set of offerings. In addition, another subsidiary of EARTH, Green Box NA Detroit, LLC (“Green Box Detroit”), appears to have participated in a different offering made to investors participating in the EB-5 immigrant investor program administered by the United States Customs and Immigration Service (“USCIS”). It also appears that EARTH offered several different types of guaranties of the EB-5 investments in Green Box Detroit, including guaranteeing, through Van Den Heuvel, the refund of EB-5 investors’ $500,000 investments should their visa application be denied. In addition, EARTH, through Van Den Heuvel, appears to have represented to EB-5 investors that it had pledged up to $40 million of its assets as security for their investments related to Green Box Detroit. …

II. The Plan Impermissibly Discharges the Debtor and Releases Non-Debtors.

Article VII of the Plan contains a broad plan injunction that is tantamount to a third party release and a discharge of the liquidating Debtor. Article VII provides that all actions and claims against not only the Debtor but also the non-debtor, RTS, will be permanently enjoined. Since Van Den Heuvel indirectly owns the majority of RTS, the Plan purports to shield RTS and Van Den Heuvel from the SEC’s police and regulatory power. …

The SEC alerted the Debtor that this provision runs afoul of the Bankruptcy Code and the law of this Circuit and requested that appropriate carve-out language be included in the Plan. Debtor’s counsel assured the SEC that he would include carve-out language and represented to the same to this Court at the original disclosure hearing held on October 19, 2016. However, the SEC was deeply disturbed when the Amended Plan failed to include the negotiated carve-out language. It is clear from representations from Debtor’s counsel that the Debtor intends to use the Plan to impermissibly shield [GBNAGB] and RTS from the SEC’s police and regulatory powers. Email from Paul Swanson to Angela Dodd, dated November 10, 2016. (“We don’t want to see that thwarted mid-stream by problems that RVDH may be embroiled in.”). Attached hereto as Exhibit 1. The Disclosure Statement further makes clear that the Debtor intends to curtail the rightful powers of governmental entities. Disclosure Statement, pp. 24. (The Plan is intended to “provide for a clear and level playing field without external threats due to the prior actions of management of the Debtor or any of its related companies.”) (emphasis added). …

Section 1141(d)(3) of the Bankruptcy Code provides that a corporate debtor cannot obtain a discharge if it has liquidated all or substantially all of its assets and does not engage in business after confirmation. The Debtor cannot secure a discharge through the injunction provision in Article VII to which it is not entitled under the Bankruptcy Code. …

Moreover, it is impermissible to restrict governmental actions through injunctive or release provisions in a Chapter 11 plan. The Seventh Circuit has limited plan provisions that seek to release non-debtors to truly unusual circumstances… The proposed injunction does not grow out of extraordinary circumstances. Despite this clear precedent, however, the Debtor seeks approval of Plan provisions which permanently enjoin and release claims of creditors against non-debtor third parties. …

On its face, the injunction is contrary to controlling law and constitutes an impermissible violation of Section 524(e) that renders the Plan unconfirmable. Accordingly, it is not allowable in the Seventh Circuit and renders the Plan unconfirmable and therefore the Debtor cannot meet the requirements of Section 1125 with respect to any disclosure statement submitted in connection with the Plan.

…[W]hat the 1st Amended [Disclosure Statement] fails to mention is that a Superseding Indictment in the [federal bank fraud] action was filed on September 20, 2016, specifically identifying transactions involving both assets and employees other than Ronald Van Den Heuvel of EARTH [Environmental Advanced Reclamation Technology HQ LLC, now known as Reclamation Technology Systems LLC (RTS LLC), which is Green Box NA Green Bay LLC’s] parent company upon whom the Debtor’s First Amended Chapter 11 Plan is wholly dependent, in Counts 14 through 19. …

8.  The Disclosure Statement states that NewCo has negotiated for warehouse space [at 821 Parkview Road in Ashwaubenon, WI] with Little Rapids to address contiued occupancy. … This is misleading. [Little Rapids Corp.] reached a tentative agreement with representatitves of [Green Box NA Green Bay LLC], but discussions stalled when it became clear that [GBNAGB] would not have funds to pay past due post-petition rent and there have been no further discussions. …

14. [Little Rapids Corp.] objects to the approval of the Disclosure Statement and would show that the Plan contains such fatal defects that the costs and delays associated with solicitation of the Plan is not in the best interests of the estate. …

18. [GBNAGB]’s Plan on its face fails to meet the best interests test for the following reasons: it fails to demonstrate that the treatment of creditors under the Plan is at least as favorable as Chapter 7 liquidation, and it is devoid of any reference to independent appraisals or extrinsic evidence to support the values that are placed on certain assets.

19. Relatedly, the fact that [GBNAGB] is proposing to utilize the Project Funding to pay adminstrative expense claims against the estate strongly suggests that this Plan is simply not feasible.

1.  Crossgate [Partners LLC] and [Advanced Resource Materials, LLC / ARM]’s claims against the estate arise from the extention of $700,000 in credit to [Green Box NA Green Bay LLC] or its affiliates. [GBNAGB] granted Crossgate security interests in a Kool unit on Septemeber 2, 2014, when Crossgate provided Green Box NA Green Bay, LLC, the Debtor, Ronald Van Den Heuvel, the Debtor’s principal, and Environmental Advanced Reclamation Technology HQ, LLC (“EARTH”) a loan for $200,000. [GBNAGB], Ronald Van Den Heuvel and EARTH were co-borrowers on that loan. Crossgate perfected its security interests in the Kool unit by filing a UCC financing statement with the Wisconsin Department of Financial Institutions on September 3, 2014. Crossgate agreed to extend credit on these terms after an attorney representing [GBNAGB] at that time provided an opinion to Crossgate on August 29, 2014, that the Kool unit was the property of Green Box NA Green Bay, LLC, the Debtor, and was free and clear of all liens.

2.  On March 18, 2015, ARM wired $500,000 to [GBNAGB] under the terms of an Operating Agreement for GB-ARM, LLC, an entity in which Crossgate’s affiliate, ARM, and [GBNAGB] had an interest.

3.  The Disclosure Statement refers to certain “intellectual property related to the process” in which [GBNAGB] contemplated the Kool units would be operated. … The Disclosure Statement fails to identify the nature of these intellectual property rights, and, more importantly, the owner of such rights.

4.   Elsewhere in the Disclosure Statement, the Debtor states that it “can supply certain proprietary information on the configuration and operation of both of the units.” [GBNAGB] also claims that it can “cause the proprietary information to be licensed with any purchaser of such unit, at no charge, but only to be used with the unit sold and no others.” The value of this “proprietary processes” is apparently considerable, as [GBNAGB] avers that the Kool units are likely to be sold at a lower price without it as “any purchasers would have to engage in significant trial and error in order to utilize” the Kool units “in any effective manner.” [GBNAGB] warns, “The intellectual property does not travel with those units and belongs to a related third party.” … But who owns this intellectual property? What form does the intellectual property take? Is it a patent, a software license, or a trade secret? The reader is left guessing.

5.  The Disclosure Statement leaves too much play in the joints concerning just what intellectual property rights are required to operate the Kool units, and who holds such rights. The purpose of a disclosure statement is to provide a party with sufficient information to determine whether to vote for the plan. A disclosure statement that is confusing is not adequate. If [GBNAGB] does not own the intellectual property rights associated with the operation of the Kool units, how can it cause a third party to provide such intellectual property rights to the purchaser of a Kool unit, should one be sold as contemplated by the Disclosure Statement? What consideration would be provided to the third party for the transfer of these rights? The Disclosure Stament fails to say. Given the apparent reliance on a third party to provide the intellectual property associated with the Kool units, one wonders why the Debtor, in the latest iteration of the Disclosure Statement and Plan, now proposes to sell the Kool units instead of surrendering them, as was contemplated in [GBNAGB]’s prior filings.

6.   The Disclosure Statement’s statement that intellectual property rights must be obtained from third parties to operate the Kool units is at odds with [GBNAGB]’s prior undertakings with  [Crossgate and ARM]. [GBNAGB] and EARTH executed a Security Agreement in favor of Crossgate on September 2, 2014, which states that the collateral includes all general intangibles relating to or arising from the Kool unit. Further, [GBNAGB], with ARM, is party to the Limited Liability Company Operating Agreement of GB-ARM, LLC, which requires [GBNAGB] to deliver to GB-ARM, LLC, all intellectual property necessary for the operation of each of the Kool units purchased and installed by GB-ARM, LLC. For the reasons stated above, Crossgate and ARM object to the Disclosure Statement.

A.  What access does “NewCo” realistically have to the funding and/or cash flow necessary to pay the creditors?

Debtor admits it has no income, and that all expenses related to this case are being funded by Glen Arbor (a non-debtor). (Doc. 116, p. 14). The Amended Disclosure Statement is void of any suggestion that Glen Arbor (or any other party) is committed and able to fund this case through confirmation. Accordingly, Debtor’s life-line continues to be dependent on the grace of third parties.

The Amended Disclosure Statement now makes clear that payment to creditors will come from two sources: (1) an initial payment from new money funded by new investors, and (2) subsequent payments from the future cash flow of NewCo. Each of those payment sources are discussed below.

1.  Funding from Investors. Debtor boasts that it has engaged a “nationally recognized investment bank” to assist it in soliciting new investors for the “project.” However, Debtor concedes that it has not fully complied with all conditions required to proceed with a public offering (Doc. 116, p. 14 states that Debtor has satisfied “many” prerequisites, but does not itemize what other prerequisites are left open). The open issue expressly identified in the Amended Disclosure Statement is Debtor’s need to raise $2.5 million in capital to complete certain due diligence items required by the investment bank to proceed with the offering. To date, that initial capital is uncommitted. (Doc. p. 14).

This is where Debtor’s momentum stagnates: Debtor admits that this Court cannot address feasibility until the due diligence is completed to the satisfaction of the investment bank (Doc. p. 25); however, the due diligence cannot be completed without a $2.5 million investment of capital (Doc. p. 40); however, the $2.5 million cannot logically be raised without confirmation of this Court that the plan can move forward; however, the court cannot confirm the plan without addressing feasibility.

Without evidence of a firm commitment to fund (or, in this case, invest), a plan whose success depends on such financing does not satisfy “feasibility” requirement for confirmation. … Debtor has provided nothing to assure creditors that the investment bank will be able to move forward with the initial financing of the Project (for example, an engagement letter, terms sheet, etc.) or that investors are willing to invest, leaving creditors to guess about whether months of continued waiting could result in any payment at all.

2.  Projected Cash Flow. This Court should not lose sight of the fact that NewCo is a new operating entity, embarking on a new reclamation process, using new technology, in new markets, with essentially no historical market or financial statistics. Despite the lack of historical data, Debtor now provides financial projections suggesting that NewCo will not only have sufficient cash flow to pay creditors over the next seven 7 years, but that the operating cash flow of NewCo will increase 4 fold in the first 3 years. (Doc. 116, page 64). While creditors would like nothing more than to be paid from such a healthy stream of cash, Debtor provides little by way of support for its projections.

Debtor does not disclose the author of the projections, nor does Debtor provide any information regarding the assumptions made by the author to buttress the projections. Among other things, the Disclosure Statement should clearly identify all assumptions made in calculating pro forma information and should set forth those facts supporting all estimates; information regarding accounting and valuation methods used in preparation of statement’s financial exhibits must also be included. …

B.  Is the “roll up” fair and equitable to creditors?

1.  Jurisdiction of Court to alter non-debtor property rights. Debtor states that RVDH has been removed from all management activities, and that his continued ownership interest in Debtor is now “held” by an unidentified trust. (Doc. 116, pp. 12, 24, 38). The Amended Disclosure statement purports to strip RVDH (and only RVDH) of his right to receive dividends from the Debtor, the payments instead being held in a trust for the benefit of Class 8 creditors. Because RVDH is a non-debtor, Ability questions whether this Court has jurisdiction to affect RVDH’s property rights in this manner. In any event, Debtor has offered no evidence regarding this alleged trust or the entity(ies) who are control of such trusts. Accordingly, even if this Court does have jurisdiction to affect the property rights of RVDH, individually, the Amended Disclosure Statement provides no information on how (or against whom) that provision will be enforced.

2.  Continued Violation of the Absolute Priority Rule. The Absolute Priority Rule states that junior classes of creditors cannot receive any property on their claims until senior classes of creditors are paid in full. … That is not the structure that the Disclosure Statement proposes. Instead, presuming that cash dividends are made from NewCo to Debtor, all current equity owners will receive their prorate share of the dividend. While Class 8 claims would get the RVDH’s share of the dividend, the Class 8 claims are not given priority over other current equity holders. For example, if NewCo is wildly successful in year 2 and makes a distribution to Debtor of $100,000, approximately $21,000 of that amount will be paid to non-RVDH equity owners at the same time that Class 8 claims are paid the reaming $79,000. This is a clear violation of the Absolute Priority Rule. To be clear, the debt owed to Ability is not a debt of RVDH – it is a debt of Debtor. Therefore, Ability must be paid in full before any property of this estate falls to any equity owners.

3.  Lack of Competitive Bidding. The Amended Disclosure Statement purports to sell Ability’s collateral to NewCo in exchange for $7.6 million, with Ability retaining those sale proceeds in full satisfaction of its secured claim. The Amended Disclosure Statement evades any competitive bidding process wherein Ability could make a credit bid for the amount Debtor owns, or wherein other bidders could submit a bid for more than $7.6 million. This structure is contrary to established law in this Circuit, which requires competitive bidding to “prevent the funneling of value from lenders to insiders…” … It is not fair or equitable for Ability to be stripped of its collateral without first testing the market and without giving Ability the opportunity to credit bid.

4.  Lack of consideration for certain “related” assets. It does not appear that NewCo is paying any money to Patriot Tissue for its transfer of the converting line portion of the Project, or is there any valuation for that transfer. NewCo should be required to pay Patriot the value of its assets which should, in turn, use those proceeds to pay creditors (including an undisputed $1,000,000 account payable due to the Debtor). Instead, Debtor simply writes Patriot off as being “uncollectible.”

C. Who is paying the outstanding real estate taxes?

The Amended Disclosure Statement is silent on the treatment of a significant real estate
tax claim – nearly $500,000.00 – made by the Brown County Treasurer stemming from multiple years of unpaid taxes. This claim is secured by a tax lien on the real estate in which Ability has a mortgage, and the Debtor must provide for its full payment.

D. Why is an injunction necessary?

The Disclosure Statement creates an injunction against collection against the Debtor and non-debtor insiders (i.e. RTS). (Doc. 116, p. 24). That release includes the guaranty executed by RTS in favor of Ability. Debtor fails to detail why creditors should agree to such a release (other than Debtor’s claim that it is “crucial to maintain the timeline” of the roll up), or whether the non-debtor insiders will contribute any consideration to support such a release. Absent a release, Debtor may be able to collect some or all of its debt from RTS.

SUMMARY

Debtor’s Amended Disclosure Statement fails to provide “adequate information” that would enable Ability to make an informed judgment whether to accept or reject Debtor’s proposed Plan, as required by 11 U.S.C. § 1125(a)(1). Ability respectfully requests that the Court deny Debtor’s request for approval of the Disclosure Statement.

As a threshold matter, it should be noted that the Debtor has significantly delayed progress in this case, particularly with respect to Cliffton’s collateral and disclosure in general. Cliffton’s requests for Debtor to honor its stated intention to surrender Kool Units has been ignored. Creditors’ requests for specific information related to financing, appraisals, projections, and documents have been ignored. In addition to being generally nonresponsive, the Debtor’s Initial Disclosure Statement required that, in order for the creditors to have access to the Debtor’s financial information – ostensibly due to its sensitive nature – any interested party was required to execute a Non-Disclosure Agreement (“NDA”). However, after going through the time and expense of negotiating the NDA, the Debtor has still not provided Cliffton with most of the information requested. It is plain that the Debtor cannot legitimately reorganize its financial affairs.

Similar to its Initial Disclosure Statement, the Debtor’s Amended Disclosure Statement should not be approved because it lacks sufficient and necessary information. As more fully set forth below, the lack of necessary information in the Amended Disclosure Statement relates to fundamental disclosures, including basic financial information such as sources of funding, financial projections, and information related to intellectual property, among others. In spite of Cliffton’s requests for more information in these areas, the Amended Disclosure Statement does not provide any additional useful or adequate information. While Debtor did provide some additional information in the Amended Disclosure Statement, and notwithstanding the fact that the Debtor’s liquidating plan has been revised to a plan of reorganization, the result is the same as the Initial Disclosure Statement: the lack of information available to creditors, including Cliffton, prevents them from making an informed voting decision regarding the 1st Amended Plan of Reorganization Dated November 9, 2016 (the “Amended Plan”).

Debtor’s Amended Disclosure Statement fails to provide any concrete or specific information related to confirmation of its Chapter 11 Amended Plan. Accordingly, the Amended Disclosure Statement should not be approved. …

i. Claimed Intellectual Property Rights

Debtor’s Amended Disclosure Statement continues to emphasize that the Debtor has intellectual property rights in the processes that have “significant value” (See Amended Disclosure Statement, p. 20, ¶ 1.), but there is no real explanation about such issues as whether the intellectual property is actually vested and owned by the Debtor, whether it has any value, and if it is transferrable.

The Debtor vaguely alludes to processes that are “proprietary to the debtor and held by a related entity” (See Amended Disclosure Statement, p. 8, ¶ 1.) but fails to fully meaningfully identify anything about these processes. Although the Debtor claims ownership in intellectual property rights, it simultaneously provides that it has been “secured in an entity…PC Fibre Technology, LLC” with which it has a “license agreement” (See Amended Disclosure Statement, p. 13, ¶ 3.) The Debtor includes an attachment in the Amended Disclosure Statement labeled “Intellectual Property Rights” which states that it has a Process Patent, FDA Approval for Use with Food Handing (sic) Tissue Products, and Industry Leading Manufacturing Technologies. However, the short, bullet-point descriptions do nothing to clarify the extent of the Debtor’s intellectual property rights, if any.

First, the Debtor states that it has a pending patent, serial number 13/385,218 which was filed in February 2011. This appears to be the application for which [Ron Van Den Heuvel] had applied. (See Amended Disclosure Statement, p. 7, ¶ 2.) However, the Debtor cannot have intellectual property rights in an application; only a granted patent vests such rights. Indeed, the Amended Disclosure Statement conjectures that “it is expected that the final process patent will be issued sometime in 2017.” (See Amended Disclosure Statement, p. 7, ¶ 3.) Thus, the Debtor does not actually have any intellectual property rights and it cannot assert any corresponding value to the estate, as there is no value in an application for a patent.

Second, this particular application appears to have been rejected several times. There is no specific information listed in the Debtor’s bankruptcy about which steps it has taken to renew its application in this patent and why this time it is likely to be granted a patent.

The Debtor also lists Patent Number 6,174,412 B1, which refers to processes related to tissue manufacturing and the conversion of cotton. The Debtor’s information related to alleged intellectual property rights is insufficient and paints a thoroughly incomplete picture about the Debtor’s intellectual property. …

The Debtor admits that it has actually reviewed very little financial information, casting serious doubt on the credibility of the details of the Amended Plan and any assumptions upon which the Debtor relies. The Debtor provides that financial projections are not yet complete. Additionally, the valuable intellectual property that the Debtor touts and appears to rely on for its processes is exaggerated, poorly described, likely valueless, and not likely owned by the Debtor in the first place.

In this case, in spite of its duty to provide full and transparent information to its creditors, the Debtor has continued to muddy the waters. The Debtor has failed to file complete and accurate schedules disclosing any insider transactions that have taken place, including the potential ownership of intellectual property by an insider. The Debtor has obfuscated the disclosure process by purporting to require creditors to enter into non-disclosure agreements before permitting creditors to view the Debtor’s financial projections, then providing only the disclosed information already included in this Amended Disclosure Statement.

The United States Trustee, by Attorney Amy J. Ginsberg, objects to the approval of the Debtor’s First Amended Disclosure Statement (“Disclosure Statement”) because it fails to provide adequate information including: (1) facts supporting its pro forma financial projections; (2) information related to the $2.5 million necessary to perform the due diligence before equity investment can be sought on the capital market; (3) information about unpaid real estate taxes in excess of $450,000; (4) the absolute priority rule; and (5) transactions with insiders.

Ms. Dodd expressly reserved the SEC’s right to maintain its objection to plan confirmation on the basis that the debtor is actually liquidating its assets and therefore should not receive a discharge. See 11 U.S.C. § 1141(d)(3)(A).

 

RELATED:

 

See also:

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Public Wisconsin Court records show that Ron Van Den Heuvel’s on-again/off-again associate/counsel Ty Willihnganz, owner of Ty Will Law, LLC, recently had his Wisconsin Bar license re-suspended by the Office of Lawyer Regulation for failure to pay dues…

UPDATE 11/23/2016: 
TY C. WILLIHNGANZ HAS NOW PAID HIS FEES

…but he is also awaitng a pending decision in a disciplinary case against him in the matter of:

 

Related:

 

See Oneida Eye’s previous reporting:

____________________

 

Oneida Eye has been alerted to other fronts linked to Ron Van Den Heuvel’s and Oneida Seven Generations Corporation’s incinerator scheme partner…

Abdul Latif Mahjoob

…of American Combustion Technogies Inc. / ACTI

…a/k/a American Combusiton Technologies of California Inc.

American Renewable Technologies Inc. / ARTI

arti-logo

 

American Renewable Energy Inc.

 

…and will be posting more information about:

 

 

promaxx-af-logo

 

promaxx-af-asia-logo

 

gander-corporation-logo

 

In the meantime, here are some recent court documents from a lawsuit alleging Fraud by American Combustion Technologies of California, Inc. / ACTI:

This action arises out of a business dispute. … Plaintiff purchased specialized equipment from Defendants, which allegedly did not perform as promised. …

Additionally, Defendants did not provide certain documents that Plaintiff asserts they were contractually required to provide. … Plaintiff therefore brought claims for fraudulent inducement, negligent misrepresentation, breach of contract, breach of warranty, and revocation

The Court agrees with Plaintiff. Plaintiff’s complaint alleges that Defendants provided equipment that, “as designed and manufactured,” cannot “function at the levels promised and warranted by Defendants.” … The information Plaintiff seeks is relevant and necessary to determining whether manufacturing defects exist.

 

If you have any information about the corporations named above or other fronts affiliated with Abdul Latif Mahjoob, please contact Oneida Eye (see ‘About‘ tab at top of page for our email address).

Abdul Latif Mahjoob – man of many shady enterprises.

Abdul Latif Mahjoob – man of many shady enterprises.

Watch Ron Van Den Heuvel make his pitch in his home town at the April 15, 2014 De Pere Common Council Meeting:

  

See Oneida Eye’s previous reporting:

 


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Tags

Abdul Latif Mahjoob / ACTI / AREC / AREI / ARTI ACF Leasing ACF Services Alliance Construction & Design / Alliance GC (Global Conservation) American Combustion Technologies Inc. (ACTI) / American Combustion Technologies of California Inc. (ACTI) / American Renewable Energy Inc. (AREI) / American Renewable Technologies Inc. (ARTI) Artley Skenandore Jr. / Swakweko LLC Atty. William Cornelius Bruce King City of Green Bay Fmr. OBC Chair Cristina Danforth / Tina Danforth Fmr. OBC Chair Ed Delgado Fmr. OBC Sec. Patty Hoeft Fmr. OBC Vice-Chair Greg Matson Fmr. OBC Vice-Chair Melinda Danforth General Tribal Council / GTC Generation Clean Fuels Green Bay Renewable Energy LLC / GBRE Green Box NA Green Bay LLC Incinerators / Gasification / Pyrolysis / Plastics-to-Oil / Waste-to-Energy Jackie Zalim Kelly Van Den Heuvel / Kelly Yessman Kevin Cornelius Mike Metoxen Mission Support Services Nevada LLC / Mission Support Services LLC Nathan King Nature's Way Tissue Corp. OBC Chief Counsel Jo Anne House OBC Law Office / OLO OBC Vice-Chair Brandon Lee Stevens / Brandon Yellowbird Stevens Oneida Business Committee / OBC Oneida Energy Blocker Corp. Oneida Energy Inc. Oneida ESC Group LLC / OESC Oneida Nation of Wisconsin / Oneida Tribe of Indians of Wisconsin / Indian Country / Thornberry Creek LPGA Classic Oneida Seven Generations Corporation / OSGC Oneida Total Integrated Enterprises / OTIE OPD Lt. Lisa Drew-Skenandore Owen Somers / Oneida Internal Security Director Paul Linzmeyer Pete King III / King Solutions LLC Ron Van Den Heuvel Sustainment & Restoration Services LLC Todd Van Den Heuvel Tsyosha?aht Cathy Delgado Wisconsin Economic Development Corporation / WEDC

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