Sentinel bankruptcy trustee Frederick J. Grede says he has a very good idea what happened to the rest of the money that disappeared in the Sentinel scandal. “We think there are significantly more sources of recovery,” he says, including the Bank of New York and “the accountants,” and adds that there will be other lawsuits to recovery more of the Sentinel customer funds going forward.
In the two settlements with Philip Bloom and son Eric Bloom, Grede recovered $10.7 million of the missing $350 million, and released Philip Bloom, Eric Bloom, their trusts and Sybille Bloom, Philip’s wife, against any pending or future lawsuits from the creditors.
“Part of the agreement requires these two gentlemen to provide us with sworn financial statements,” Grede says. “If it ultimately is revealed or uncovered that there are additional funds, then the settlement agreement is off.” Grede explains that his role is to recover as much money as possible for the benefit of the Sentinel creditors.
“Undoubtedly, the insiders have other issues to contend with: CFTC, SEC and regulatory authorities. That is not my role. My role was to recover the funds, as much as I possibly can, on behalf of the creditors and I am confident we have done that here.” He also makes the point that his recovery of the funds for the creditors is separate from the other legal issues confronting the Blooms and that the cooperation agreement acknowledges Eric Bloom’s Fifth Amendment rights and is worded such that Eric can provide cooperation in the future. “Practically speaking, Eric’s attorneys are not going to let him sit down with us and give sworn testimony and depositions. He’s got other issues to contend with. That’s where we try to recognize that. That’s where he will be more concerned with protecting his rights.”
For those of you who slept through high school civics, here’s the Fifth Amendment:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Over the course of the conversation, Grede stressed that the recovery is a separate issue from the other legal problems the Blooms face. “My issue is money,” he says.
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Thank you to Kate Mullen, Futures’ office manager and aspiring paralegal, for sorting through the settlements and offering plain English explanations.
Tags: Eric Bloom, Grede, Philip Bloom, Sentinel, settlement
