Coral Gables, FL (Vocus) September 23, 2009
The Law Firm of Tramont Guerra & Núñez, PA (TGN) comments on the second report issued by Thomas A. Seaman, the court appointed Permanent Receiver (“the Receiver”) for Medical Capital Holdings, Inc. (“MCH”), and its subsidiaries and affiliates. While the investigation and forensic accounting continues the Receiver’s second report makes it abundantly clear that MCH investors will sustain significant losses and would be able to recover only a small percentage of their investments from MCH assets. As of the release of this report, the Receiver has determined that the Medical Provider Funding Corporations 1-6 (MPFC) raised $1.733 billion, with investors still owed $1.079 billion from that sum. The Receiver has uncovered “Significant Assets” with a book value of $407,600,000, well short of the $1.079 billion due investors. The report details, but does not place a value upon, a series of obstacles to realization of the value of those assets. Of the $407,600,000 uncovered to date, $183 million is invested in non-performing loans and non-operating hospitals. Additionally, a forensic accounting has revealed that 53 of the 104 medical accounts receivable clients listed on various Net Collateral Coverage Ratio reports by MCH, or $542,894,528 of the $625,332,141 in total receivables, no longer exist. Of the $80,637,383 in verifiable accounts receivable $74,523,150 is aged more than 180 days.
Investors should consider whether an individual securities arbitration claim filed with the Financial Industry Regulatory Authority (FINRA) is an effective method to recover their investment losses. The brokerage firms who distributed the securities issued by MCH and its affiliated entities were obligated to conduct due diligence of facts concerning the risks associated with the investments. Financial advisors told many investors that these securities were suitable for current income investment objectives. Brokerage firms are obligated to give, and investors are entitled to rely upon, brokerage firms for competent, suitable investment advice in accordance with FINRA Rules and Regulations. Recommendations of unsuitable investments and/or failure to conduct adequate due diligence are both causes of action that form the basis for individual securities arbitration claims filed with FINRA.
The Securities Law Firm of Tramont Guerra & Núñez, PA, is a nationally recognized, Martindale Hubbell “AV” rated securities law firm. To request a confidential consultation from a TGN attorney to assist you in determining whether you have a viable individual claim for investment losses that exceed $100,000 from a full service brokerage account, contact us on our website. To speak directly with an attorney, call (800) 578-0137 and ask for Benjamin Fernandez, Esquire.
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