Free Order - District Court of Colorado - Colorado

Case 1:01-cv-00645-JLK

Document 106

Filed 10/26/2005

Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Judge John L. Kane Civil Action No. 01-cv-645-JLK SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. KENNETH ROY WEARE, a/k/a ROY WEAVER, J & K GLOBAL MARKETING CORPORATION, and AAA-AUCTION.COM, INC., Defendants.

ORDER APPOINTING RECEIVER Kane, J. The Court has reviewed the Notice and Submission of Proposals to Act as Receiver (doc. #105), filed October 20, 2005, and based on those submissions, has determined that the firm of Patten, McPhee and Associates, Inc., located at 1775 Sherman Street, Suite 2900, Denver, Colorado, shall be appointed to act as receiver in this case. The receiver is appointed to establish and administer a claims process for investors and to propose a distribution plan to the court for funds collected from various bank accounts in the United States and abroad. To date, the SEC has collected funds in the amount of $803,728.49. They continue to pursue recovery of an additional $2,877,515.79 through litigation abroad. The court has determined that a receiver is necessary to administer a distribution plan for these recovered funds. The receiver is, therefore charged with the following duties and other such acts as the receiver determines necessary for the completion of this plan:

Case 1:01-cv-00645-JLK

Document 106

Filed 10/26/2005

Page 2 of 3

1.

Based on an Access data base containing approximately 48,415 record lines of historical investor information eliminate multiple entries by the same person for purposes of creating a contact list to use in soliciting claims from investors. There are approximately 23,000 unique investor names.

2.

Compare Access data base to summaries of deposit items listing investors' names and identification numbers, which deposits were received in several bank accounts located in the United States, Luxembourg and Canada to determine those investors who made deposits and received back any payments in order to identify the full group of potential claimants.

3.

Devise an efficient and comprehensive method of establishing the current location of the approximately 23,000 investors.

4.

Establish a claims procedure: Determine the form of the notice to be sent to investors and the information investors need to submit to establish their claim. Set length of time for investors to submit claims. Establish the level of proof investors must submit to support their claim. Have claims process approved by Court.

5.

Give notice to investors to begin claims process: Send initial email and other communications, including advertisements soliciting claims from individuals with valid email addresses. Create a website, if necessary, to obtain initial information.

Case 1:01-cv-00645-JLK

Document 106

Filed 10/26/2005

Page 3 of 3

Determine which email addresses are no longer valid. Send notice by regular mail to investors without valid email addresses and engage in appropriate follow-up to locate investor claimants. 6. 7. Receive claims from investors and evaluate the validity of claims. Prepare distribution proposal assigning investors a pro rata share of funds collected after costs of distribution plan have been deducted and submit plan to the Court for approval. 8. 9. Give notice to claimants of process to contest final distribution plan. Administer distribution of funds from registry of the Court in coordination with the Clerk' office and prepare any tax forms related to interest earned on s the funds to be distributed. Additionally, the receiver shall submit reports to this court on a quarterly basis outlining the status of the process. The receiver may apply for payment of fees and costs on a monthly basis. Dated this 26th day of October, 2005. BY THE COURT:

S/John L. Kane JOHN L. KANE, SENIOR JUDGE UNITED STATES DISTRICT COURT