SEC v. Pacific West Capital Group, Inc., et al

Case Summary:

On February 16, 2018, Thomas C. Hebrank of E3 Advisors was appointed permanent receiver for PWCG Trust (“Defendant”), pursuant to an Order entered by the United States District Court for the Central District of California in an action against Defendant filed by the Securities and Exchange Commission.

Document Links (PDF Format):

This monthly Case Update is being provided to the investors in PWCG Trust who have signed up to receive email updates from the receivership website. You will note below that brief descriptions are provided, along with a link to the applicable Court filings. You are strongly advised to read these filings in order to have a better understanding of the case, as well as to answer many of the questions you may have.

 

Case Updates: September 2019

 

SUMMARY

There has been no major case activity in July or August 2019.

 

POLICY STATUS REPORT

The link below provides the status of each of the policies in the PWCG Trust portfolio. Policies are listed as 1) Active Policies, 2) Maturities, or 3) Negative Value Policies. The Negative Value Policies listing further provides the status of each of these policies.

 

PWCG Trust September 2019 Policy Status Report

 

08/28/2019 – Receiver’s Sixth Interim Report

FREQUENTLY ASKED QUESTIONS:

 

Who is the Receiver? Why was there a Receiver appointed? Thomas C. Hebrank was appointed by the Federal District Court on February 16, 2018. The Receiver was appointed after a complaint was filed by the Securities and Exchange Commission against Pacific West Capital Group, Inc. (“Pacific West”); Andrew B. Calhoun IV; PWCG Trust, et al. Your life insurance investment interest was created by PWCG, and is one of the subjects of the litigation between the SEC and PWCG.

 

Who can I talk to about my investment? You can periodically visit the Receiver’s website for additional updates as far as the case, Receiver’s Reports and other legal filings (www.ethreeadvisors.com/cases/pwcg). The Receiver and his staff are happy to take your questions, however to keep expenses low we ask that you check the FAQ or website first. Please direct inquiries to the Receiver to pwcg@ethreeadvisors.com.

 

Do I still need to make premium call, administrative fee or other payments? The Receiver has suspended the collection of both investor premium calls and shortfall payments, as well as the $200 or other administrative fees.

 

Do I still own interests in specific policies? The Court has approved the “pooling” of all investor policy interests meaning that all premium payments and all policy maturities are pooled together for the benefit of all of the investors. Once sufficient surplus funds become available, which is expected to occur in approximately five to seven years (based on current projections), the Receiver will propose that distributions be made to investors based on total amounts contributed by investors (including cash calls). It is important to understand that, due to the insufficiency of cash reserves set up by PWCG, if the reserves and death benefits for the policies were not pooled, and the Receiver was unable to borrow funds to meet anticipated cash needs over the next few years, the vast majority of the policies would lapse, meaning investors would recover little or nothing. Therefore, the pooling and anticipated borrowing is critical to maximizing the recovery from the policies for investors.

 

Will the Receiver be collecting the Final Judgments against defendants Pacific West Capital Group, Inc.; Andrew B. Calhoun IV; and Andrew Calhoun Jr.? Copies of the Final Judgments against Andrew B. Calhoun IV, Andrew Calhoun, Jr. and Pacific West Capital Group, Inc. can be found at the below links under Court Filings. These Final Judgments were entered in favor of the Securities and Exchange Commission on June 15, 2018 and June 26, 2018.

 

The SEC is responsible for collecting each of these Judgments. The Receiver will not engage in direct collection activities with regard to these Judgments. It should be noted that if the SEC is successful in recovering money from these Defendants, it is possible that the recovered funds will be turned over to the Receiver. In other words, in the normal course of a federal equity receivership, the SEC will turn over funds that are collected on judgments to the Receiver for distribution to the investors who were victims of the underlying wrongdoing. In the meantime, the Receiver will continue his work pursuant to the Court’s orders to maximize the recovery and distribution to investors in connection with the PWCG Trust.

 

Initial Investor Notification Letter

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Court Filings:

 

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Email Thomas C. Hebrank: pwcg@ethreeadvisors.com