NEWARK—A distribution plan that provides $5.15 million to investors who were defrauded by Robert Brennan has been approved, marking a significant milestone to a case the New Jersey Bureau of Securities began in 1995.
Defrauded investors can submit a claim to the receiver who is implementing the distribution plan, following approval of the plan in State Superior Court.
The Bureau of Securities in August, 1995 filed suit against Brennan and L.C. Wegard, an investment firm which Brennan controlled, and other defendants, alleging violations of the New Jersey Securities Law and the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act.
Brennan that same month filed a voluntary Chapter 11 bankruptcy petition. In June, 1999, the Bureau obtained a $45 million non-dischargeable judgment against Brennan and L.C. Wegard.
A protracted effort to find assets to satisfy the judgment then began, as Brennan claimed he did not have assets. Ultimately, Bureau investigators tracked down assets which Brennan had attempted to hide. A pension fund that Brennan had set up for himself was among the assets seized.
“The Bureau of Securities is working with the receiver and other securities industry regulators in the massive undertaking to inform the estimated 27,000 affected investors of this distribution plan,” said Marc B. Minor, Bureau Chief. “We want to get as much of the recovered funds as possible into the hands of these long-suffering investors.”
L.C. Wegard customers during the period October 1, 1991 to September, 1994 may be qualified to file a claim if they purchased any of the following securities during this time period:
• Chefs International, Inc.
• Consolidated Technology Group, Ltd. (f/k/a Sequential Information Systems, Inc.)
• Diamond Entertainment Corp.
• Common stock
• Futurebiotics, Inc.
• Gates / FA Distributing, Inc.
• Gentner Communications Corp.
• Great American Recreation, Inc.
• Common stock
• Zero Coupon Subordinated Debentures
• Subordinated Pay in Kind Debentures
• Immunotherapeutics Corp.
• Lafayette Industries, Inc.
• Linkon Corp.
• Metalclad Corp.
• Nacoma Consolidated Industries, Inc.
• Non-Invasive Monitoring Systems, Inc.
• Officeland, Inc.
• PDK Labs, Inc.
• Primedex Health Systems, Inc.
• Common stock
• Subordinated Convertible Debentures
• Process Equipment, Inc.
• Sanyo Industries, Inc.
• Site Holdings, Inc. (f/k/a Site-Based Media, Inc.)
• US Transportation Systems, Inc.
If the above criteria are met, investors can obtain a “Proof of Claim” online at www.mercadienclaimsadministration.com or by writing to: Donald F. Conway, Receiver, P.O. Box 7648 , Princeton , N.J. 08543 -7648 .
L.C. Wegard had offices in a number of states including New Jersey, Pennsylvania , New York , Rhode Island and Illinois . The North American Securities Administrators Association has agreed to work with regulators in these states in an effort to publicize information about the distribution plan to affected investors.
Deputy Attorney General Anna M. Lascurain, Chief of the Securities Fraud Section, represented the Bureau in this matter.
Order Approving Plan of Distribution [pdf]
Plan of Distribution of the Litigation Estate [pdf]
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