Phenoms going under (3 Viewers)

[cstu]

lol @ all the tinfoil hats in this thread throwing out "It was a scam from the beginning" narrative.

Anyone a copy of the filing yet? Wonder what company the money was actually paid to.

 

[CletiusMaximus]

lol @ all the tinfoil hats in this thread throwing out "It was a scam from the beginning" narrative.

Anyone a copy of the filing yet? Wonder what company the money was actually paid to.

The petition itself has very little information - there is some very basic data with broad ranges showing 5,000 to 10,000 total creditors, scheduled debts $1m - $10m and scheduled assets $100k - $500k. The Statement of Financial Affairs is also available, and contains much more information, but is about 1,700 pages so would entail a cost to download. Meeting of creditors scheduled for 2/24.

 

[wakelawyer]

lol @ all the tinfoil hats in this thread throwing out "It was a scam from the beginning" narrative.

Anyone a copy of the filing yet? Wonder what company the money was actually paid to.

The petition itself has very little information - there is some very basic data with broad ranges showing 5,000 to 10,000 total creditors, scheduled debts $1m - $10m and scheduled assets $100k - $500k. The Statement of Financial Affairs is also available, and contains much more information, but is about 1,700 pages so would entail a cost to download. Meeting of creditors scheduled for 2/24.

The cost to download may not be that expensive. I believe that PACER only charges for the first 30 pages of a download.

 

[jon_mx]

lol @ all the tinfoil hats in this thread throwing out "It was a scam from the beginning" narrative.

Anyone a copy of the filing yet? Wonder what company the money was actually paid to.

The petition itself has very little information - there is some very basic data with broad ranges showing 5,000 to 10,000 total creditors, scheduled debts $1m - $10m and scheduled assets $100k - $500k. The Statement of Financial Affairs is also available, and contains much more information, but is about 1,700 pages so would entail a cost to download. Meeting of creditors scheduled for 2/24.

Based on those sketchy limits and what Mike claimed, I think 30 percent is a best case scenario. Probably lucky to get 20 percent though.

 

[hamhocs]

The only winner in this is some guy named Mortimer

 

[Dr. Octopus]

Questions about this case? Email the Bankruptcy Clerk or call 1-801-524-6687 to speak with a Case Administrator.

 

[jon_mx]

Questions about this case? Email the Bankruptcy Clerk or call 1-801-524-6687 to speak with a Case Administrator.

Can we still email his lawyer at phenomslawyer@gmail.com?

 

[Dr. Octopus]

represented by Jeffrey P. Mortimer

Rulon T. Burton & Associates

6000 South Fashion Blvd.

Murray, UT 84107

(801) 288-0202

Fax : (801) 288-0947

Email: jeff@rulontburton.com

 

[ROCKET]

So at best he has 20-30% of the money owed? That all goes to secured creditors and Uncle Sam (not to mention his lawyers). There will be nothing left beyond that. I hate to say it but he most likely had a great time blowing everyone's $$ and now will just walk away. What a pos. Karma is a beitch.

 

[Dr. Octopus]

He's claiming to have only $224,500.00 in assets.

 

[Dr. Octopus]

only $109,000 left in Wells Fargo account, $43,000 in Paypal and $5,000 in a DWolla.com business account

 

[Dr. Octopus]

His other assets are $70,000 (value for a New Fantasy League Hosting platform)

$2,500 for Phenoms.com domain name

 

[Dr. Octopus]

No secured creditors.

 

[ROCKET]

I can't believe he didn't just blow all of it, might as well let it ride and see if he can win it back.

 

[Dr. Octopus]

He does list over 1,000 unsecured creditors by name - guessing it's the winners/players.

 

[Dr. Octopus]

lol @ all the tinfoil hats in this thread throwing out "It was a scam from the beginning" narrative.

Anyone a copy of the filing yet? Wonder what company the money was actually paid to.

The petition itself has very little information - there is some very basic data with broad ranges showing 5,000 to 10,000 total creditors, scheduled debts $1m - $10m and scheduled assets $100k - $500k. The Statement of Financial Affairs is also available, and contains much more information, but is about 1,700 pages so would entail a cost to download. Meeting of creditors scheduled for 2/24.

The cost to download may not be that expensive. I believe that PACER only charges for the first 30 pages of a download.

You are correct - it only cost $3.00.

 

[Long Ball Larry]

lol @ all the tinfoil hats in this thread throwing out "It was a scam from the beginning" narrative.

Anyone a copy of the filing yet? Wonder what company the money was actually paid to.

The petition itself has very little information - there is some very basic data with broad ranges showing 5,000 to 10,000 total creditors, scheduled debts $1m - $10m and scheduled assets $100k - $500k. The Statement of Financial Affairs is also available, and contains much more information, but is about 1,700 pages so would entail a cost to download. Meeting of creditors scheduled for 2/24.

The cost to download may not be that expensive. I believe that PACER only charges for the first 30 pages of a download.

If you guys want to pool your money and send it to me, I'll take care of it for you.

 

[ROCKET]

No secured creditors.

Other than Uncle Sam who will no doubt swoop in to grab his share. I wonder what he personally will be claiming for income in 2014?

 

[CletiusMaximus]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

 

[cstu]

His other assets are $70,000 (value for a New Fantasy League Hosting platform)

His $600k non-functioning hosting platform?

 

[Dr. Octopus]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

He's claiming $1,000,000 in gross receipts for 2014 (pre tax, estimated)

$727,190 in income for 2013

(looks like he killed a pretty good gig)

 

[Dr. Octopus]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

$20,000 to PayPal

$1,300 to American Express

$156,413 to Secure Bancard

 

[ROCKET]

My guess is he probably owes about what he's got left in cash to the IRS and his lawyers and knows it. He blew everything he could (or hid it some of it?) but wasn't dumb enough to blow the $$ he needs to keep the IRS off his back. Well played.

 

[ROCKET]

700K income on 1million$ gross sales

 

[ROCKET]

Just a thought: Assume he somehow made/stole 700K in 2013. He then owes Uncle Sam most likely 250K + or -. So he knows he's screwed and takes 600K out of the entry fees and blows it on some bogus internet platform (thru a buddys business or a conspirator) and racks up other expenses he can write off as a loss for the business in 2014.

Now he claims a net loss of 600-700K+ for the business and himself in 2014 that offsets all the money he owed the IRS in 2013. He now files bankruptcy, owes the IRS or any creditors nothing. The conspirator claims the 600K, pays the taxes on it and still has roughly 350-400K in profit. He kicks back 100K to Mike, keeps 200K and everyone rides off into the sunset happy as Mike folds the business and moves on. Brilliant.

 

[jon_mx]

So at best he has 20-30% of the money owed? That all goes to secured creditors and Uncle Sam (not to mention his lawyers). There will be nothing left beyond that. I hate to say it but he most likely had a great time blowing everyone's $$ and now will just walk away. What a pos. Karma is a beitch.

Uncle Sam will not get a dime. If there is a tax liability that will all be on Mike personally. That will screw him.

 

[jon_mx]

Just a thought: Assume he somehow made/stole 700K in 2013. He then owes Uncle Sam most likely 250K + or -. So he knows he's screwed and takes 600K out of the entry fees and blows it on some bogus internet platform (thru a buddys business or a conspirator) and racks up other expenses he can write off as a loss for the business in 2014.

Now he claims a net loss of 600-700K+ for the business and himself in 2014 that offsets all the money he owed the IRS in 2013. He now files bankruptcy, owes the IRS or any creditors nothing. The conspirator claims the 600K, pays the taxes on it and still has roughly 350-400K in profit. He kicks back 100K to Mike, keeps 200K and everyone rides off into the sunset happy as Mike folds the business and moves on. Brilliant.

If he tried something like that and gets audited, I don't think it flies.

 

[jon_mx]

And if tries to lie and hide stuff from the court, he will do time.

 

[GreenNGold]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere around 75k per year, and that would be his cut before deducting any other expense, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

 

[cstu]

Just a thought: Assume he somehow made/stole 700K in 2013. He then owes Uncle Sam most likely 250K + or -. So he knows he's screwed and takes 600K out of the entry fees and blows it on some bogus internet platform (thru a buddys business or a conspirator) and racks up other expenses he can write off as a loss for the business in 2014.

Now he claims a net loss of 600-700K+ for the business and himself in 2014 that offsets all the money he owed the IRS in 2013. He now files bankruptcy, owes the IRS or any creditors nothing. The conspirator claims the 600K, pays the taxes on it and still has roughly 350-400K in profit. He kicks back 100K to Mike, keeps 200K and everyone rides off into the sunset happy as Mike folds the business and moves on. Brilliant.

Does he have to prove that the money he gave to the web development company is legitimate if it's over 90 days prior to the bankruptcy?

 

[cstu]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere between 50-75k per year, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

That was part of the scam so could avoid tax evasion charges.

1. Report a 700k income in 2013

2. Pay a co-conspirator that money for a pretend website

3. File bankruptcy

4. Keep the so-called 'earnings' from 2013

 

[fridayfrenzy]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

He's claiming $1,000,000 in gross receipts for 2014 (pre tax, estimated)

$727,190 in income for 2013

(looks like he killed a pretty good gig)

The fact that Phenoms claimed the prize money as revenue is not a good sign in my opinion. It shows that he accounted for it as if was the company's to spend and does not agree with his statement of it being held securely.

The prize money received should not be gross income and with a "prize money expense" on the income statement. It should have been set up as a payable the moment he received it and not even hit the income statement. Only his % of it should have been recorded on the income statement. To be regarded as "revenue" you actually have to have provided a service and the only service he provided was his management related to the leagues.

ETA: Phenoms recording the prize money as gross income is like if a bank recorded all deposits customers made as gross income and then all withdrawals as an expense.

 

[cstu]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

He's claiming $1,000,000 in gross receipts for 2014 (pre tax, estimated)

$727,190 in income for 2013

(looks like he killed a pretty good gig)

The fact that Phenoms claimed the prize money as revenue is not a good sign in my opinion. It shows that he accounted for it as if was the company's to spend and does not agree with his statement of it being held securely.

The prize money received should not be gross income and with a "prize money expense" on the income statement. It should have been set up as a payable the moment he received it and not even hit the income statement. Only his % of it should have been recorded on the income statement. To be regarded as "revenue" you actually have to have provided a service and the only service he provided was his management related to the leagues.

Damning evidence for a fraud case. Let's see if happens.

 

[CletiusMaximus]

Just a thought: Assume he somehow made/stole 700K in 2013. He then owes Uncle Sam most likely 250K + or -. So he knows he's screwed and takes 600K out of the entry fees and blows it on some bogus internet platform (thru a buddys business or a conspirator) and racks up other expenses he can write off as a loss for the business in 2014.

Now he claims a net loss of 600-700K+ for the business and himself in 2014 that offsets all the money he owed the IRS in 2013. He now files bankruptcy, owes the IRS or any creditors nothing. The conspirator claims the 600K, pays the taxes on it and still has roughly 350-400K in profit. He kicks back 100K to Mike, keeps 200K and everyone rides off into the sunset happy as Mike folds the business and moves on. Brilliant.

Does he have to prove that the money he gave to the web development company is legitimate if it's over 90 days prior to the bankruptcy?

The Chap. 7 Trustee has authority to pursue any actions he may think are available to recover additional assets for the estate. He'll review the filings, ask questions at the creditors meeting on 2/24 and do whatever investigating he thinks is appropriate. He's got a $150k warchest to fund his activities. The problem of course is that he might spend that $150k chasing dead ends, further eroding any dividend unsecureds may otherwise have received and not recover any cash.

 

[Touchdown There]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

$20,000 to PayPal

$1,300 to American Express

$156,413 to Secure Bancard

Secure Bancard? He had $156k on a personal credit card he paid off in the last 90 days?

 

[Dr. Octopus]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

$20,000 to PayPal

$1,300 to American Express

$156,413 to Secure Bancard

Secure Bancard? He had $156k on a personal credit card he paid off in the last 90 days?

It looks like its a credit card service company.

 

[cstu]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere between 50-75k per year, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

That was part of the scam so could avoid tax evasion charges.

1. Report a 700k income in 2013

2. Pay a co-conspirator that money for a pretend website

3. File bankruptcy

4. Keep the so-called 'earnings' from 2013

Interesting theory but I don't think that would work for purposes of tax avoidance. You cannot use Year 2 losses to offset Year 1 taxable income. You can use Year 2 losses to establish a tax loss carry forward to be applied against years 3+ taxable income.

I didn't say he's trying to avoid paying taxes, he's avoiding going to jail for tax evasion. $500k out of $650k is still $500k.

 

[jon_mx]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere between 50-75k per year, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

That was part of the scam so could avoid tax evasion charges.

1. Report a 700k income in 2013

2. Pay a co-conspirator that money for a pretend website

3. File bankruptcy

4. Keep the so-called 'earnings' from 2013

Why would a co-conspirator do that. He would be on the hook for a tax liability.

 

[cstu]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere between 50-75k per year, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

That was part of the scam so could avoid tax evasion charges.

1. Report a 700k income in 2013

2. Pay a co-conspirator that money for a pretend website

3. File bankruptcy

4. Keep the so-called 'earnings' from 2013

Why would a co-conspirator do that. He would be on the hook for a tax liability.

For a cut of the action plus the taxes.

 

[Touchdown There]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

$20,000 to PayPal

$1,300 to American Express

$156,413 to Secure Bancard

Secure Bancard? He had $156k on a personal credit card he paid off in the last 90 days?

It looks like its a credit card service company.

I am owed $0 and never played in the this league. The winners are not grabbing what is happening here.

 

[Touchdown There]

Everyone that charged back to PayPal successfully just got paid. His PP acct was negative and he paid the balance. He then paid off 156k to his personal cc and then filed bankruptcy.

You cannot chose some creditors over others in the 90 days leading up to bankruptcy. That is up to the courts for allocation.

 

[Soaring Eagle]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

$20,000 to PayPal

$1,300 to American Express

$156,413 to Secure Bancard

Secure Bancard? He had $156k on a personal credit card he paid off in the last 90 days?

That may be baseball winnings he had to pay off in october

 

[jon_mx]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere between 50-75k per year, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

That was part of the scam so could avoid tax evasion charges.

1. Report a 700k income in 2013

2. Pay a co-conspirator that money for a pretend website

3. File bankruptcy

4. Keep the so-called 'earnings' from 2013

Why would a co-conspirator do that. He would be on the hook for a tax liability.

For a cut of the action plus the taxes.

It makes zero sense.

 

[Dr. Octopus]

Everyone that charged back to PayPal successfully just got paid. His PP acct was negative and he paid the balance. He then paid off 156k to his personal cc and then filed bankruptcy.

You cannot chose some creditors over others in the 90 days leading up to bankruptcy. That is up to the courts for allocation.

Not necessarily. Some payments (such as those made pursuant in your normal course of business) will not be clawed back into the bankruptcy.

That doesn't seem like his personal credit card, but rather a service that processes credit card payments. Those payments will likely be allowed, even if they were considered to be preferential payments during the 90 day window, because I'd guess they'd be considerd secured creditors anyway.

 

[Dr. Octopus]

No secured creditors.

That's good news. Any tax debt? Any large payments in the 90 day window?

$20,000 to PayPal

$1,300 to American Express

$156,413 to Secure Bancard

Secure Bancard? He had $156k on a personal credit card he paid off in the last 90 days?

That may be baseball winnings he had to pay off in october

Good point. And if that is the case they could be clawed back in - although it would be difficult to go after each individual winner if Secure Bancard, PayPal and AE already distributed the money to those winners.

 

[ROCKET]

He did not have 700k net profit in 2013, that must have been gross sales too, people have already run the math on what his share of the leagues would be and it comes out to somewhere around 75k per year, and that would be his cut before deducting any other expense, still a decent gig but there is no way he was anywhere close to that profitable. He should not owe much to uncle sam at all, and in the case of this year, where it would be a net loss he would not owe anything, so all of the money after lawyer fees should be going back to the players. I know the situation still sucks but I don't understand where the recent numbers are coming from.

I don't where the 700K came from, I assume it was in the filing. Let's assume he in fact did earn 700K in 2013. If that is what he earned you know he basically stole most of the entry fees and blew the money in 2013. In 2014 it all fell to pieces.

Is there any way to tell if he has IRS debt and how much from the bankruptcy proceedings? Also does the IRS trump any other creditors, secured or otherwise when it comes to collecting? I think it is fairly obvious that Mike fleeced everyone in 2013 and now is worming his way out of it thru bankruptcy. POS confirmed IMO.

 

[jon_mx]

How could he have stolen $700k in 2013 and paid the winners that year? There would not be enough money for that.

The IRS does not come into play here at all. Phenoms LLC would not have a tax liability. Those are owed by Mike personally. If Mike did take out money for gambling debts or other personal things he will have a large tax debt which no bankruptcy can wipe out.

 

[ROCKET]

How could he have stolen $700k in 2013 and paid the winners that year? There would not be enough money for that.

The IRS does not come into play here at all. Phenoms LLC would not have a tax liability. Those are owed by Mike personally. If Mike did take out money for gambling debts or other personal things he will have a large tax debt which no bankruptcy can wipe out.

He could have paid the winners thru credit, loans and with the 2014 entry fees. I think the 700K reported income in 2013 pretty much tells you everything. It wasn't income, it was him stealing the entry fees. Maybe he was smart enough to steal enough money to pay the taxes on the 700k too. Either way I think it's pretty transparent what happened here.

 

[jon_mx]

How could he have stolen $700k in 2013 and paid the winners that year? There would not be enough money for that.

The IRS does not come into play here at all. Phenoms LLC would not have a tax liability. Those are owed by Mike personally. If Mike did take out money for gambling debts or other personal things he will have a large tax debt which no bankruptcy can wipe out.

He could have paid the winners thru credit, loans and with the 2014 entry fees. I think the 700K reported income in 2013 pretty much tells you everything. It wasn't income, it was him stealing the entry fees. Maybe he was smart enough to steal enough money to pay the taxes on the 700k too. Either way I think it's pretty transparent what happened here.

The only thing that is apparent is Mike took out a lot of money. I am not sure anyone knows from this filing what happened. Obviously the winners are screwed out of almost all their winnings. But there is a lot of speculation here that just does not fit the facts. It would be good to have an FBGer attend the meeting with creditors and see more of the story.

 

[fridayfrenzy]

Income does not mean net income. 700K of income means before expenses.