Receiver's Motion.pdf

The Securities and Exchange Commission (SEC) commenced litigation against BioChemics, Inc., John J. Masiz, Craig Medoff, and Gregory S. Koning on December 14, 2012, alleging violations of the Securities Act and the Exchange Act. The court entered judgments in favor of the SEC on March 17, 2015, and August 18, 2017. A modified judgment was entered against BioChemics on May 25, 2016, as part of a negotiated settlement, which included granting a first-priority security interest to the SEC in BioChemics' assets, including intellectual property.

The court appointed a receiver, Mark G. DeGiacomo, on October 9, 2018, to take control of the receivership assets. The receiver has completed the liquidation of the assets and is holding $76,153.69 in liquidation proceeds. The SEC has also transferred $906,183.91 in civil penalties, disgorged funds, and interest to the receiver. The total distribution fund is $982,337.60.

The receiver has proposed a distribution plan to distribute the funds to 120 eligible investors who were harmed by the defendants' conduct. The plan defines key terms, including "eligible investors," "harm amount," and "distribution fund." The receiver will pay administrative creditors, including accountants and lawyers, before distributing funds to eligible investors. The distribution procedure involves paying administrative creditors and then distributing the remaining funds to eligible investors based on their harm amount.

Key points:

Total distribution fund: $982,337.60
Number of eligible investors: 120
Administrative creditors: Verdolino and Lowey, P.C., Sunstein, Kahn, Murphy & Timbers, LLP, and others
Distribution procedure: pay administrative creditors, then distribute remaining funds to eligible investors based on harm amount.