Senate Acceptance Corp’s Alleged Ponzi Scheme Gives Investors few Choices
Senate Acceptance Corp., an auto premium finance company, was the subject of an involuntary petition for a Chapter 7 Bankruptcy filing made on December 2, 2103 by major investors in the company. Senate Acceptance Corp. raised capital funds from investors to finance operations through the sale of unsecured promissory notes. According to the Chapter 7 petition, Senate Acceptance Corp. had not paid interest to a petitioner-investor on their promissory notes since August 31, 2013 and was allegedly operating a Ponzi scheme.
According to the Bankruptcy petition, Senate Acceptance Corp. has five (5) private individual and corporate note holder groups. Furthermore, the books and records of the company are not in order, resulting in an unclear picture as the true size and extent of the alleged Ponzi scheme. However, the Bankruptcy petition states that Senate Acceptance Corp. “is unable to pay its debts as they become due, including monthly interest payments on the Lender Notes and approximately $900,000.00 due to three different insurance carriers for insurance policy premiums.”
In order to protect their interests, major unsecured promissory note investors filed the Bankruptcy petition in an attempt to prevent further losses. In light of these developments, Senate Acceptance Corp’s alleged Ponzi scheme gives investors few choices except seek competent legal advice from lawyers with experience in investment fraud and bankruptcy proceedings.
Our lawyers have a significant experience in these types of matters. For example, Silver Law Group, was recently designated as, Special Counsel, to Soneet R. Kapila, Chapter 7 Trustee in re Certified, Inc., U.S. Bankr. Ct. – S.D. Fla. bankruptcy proceeding. Silver Law Group prosecuted and ultimately negotiated a favorable settlement for the bankruptcy estate in a proceeding involving operators of a Ponzi scheme. Despite complex legal issues including, the suitability of the forum, challenges to the Trustee’s standing, and the interplay of numerous Bankruptcy Code provisions, we resolved the matter in only six months and secured for the bankruptcy estate a significant recovery that will maximize the distribution each of the claimholders will receive with respect to the losses they suffered in the Ponzi scheme.