Genesis Leasing IX, Inc. et al.
On February 5, 2003, the SEC obtained permanent injunctions and other relief against Genesis Leasing IX, Inc., Lisa and Brian Paonessa, and corporate entities they controlled. One other defendant, George Hoffman, was previously enjoined. The SEC alleged that the defendants made at least 21 fraudulent mini-tender offers for the securities of five publicly traded limited partnerships. The SEC further alleged that the defendants misled approximately 2,000 investors by designing the offering circulars so as to conceal the true offering price. As a result, the SEC claimed that investors who tendered their units received only a small fraction of the offering price. For more information about the SEC's action, you can read Litigation Release Nos. 17304 (Jan. 11, 2002), 17332 (Jan. 23, 2002), and 18010 (Mar. 3, 2003).
The Court appointed Russell Weigel III as Special Master to take control of the assets and to propose a plan for distribution to defrauded investors. The Court has approved Mr. Weigel's plan, and he is in the process of sending letters to potential claimants.
The Special Master has obtained the Court's approval to rescind the suspended transfers to the defendants of several thousand limited partnership interests in Polaris Aircraft Income Fund II, LP (Polaris II) and Polaris Aircraft Income Fund III, LP (Polaris III).
The remaining units, which are held in the names of the defendant entities, are controlled by the Special Master. Polaris II and Polaris III are expected to effect final liquidating distributions later this year. In anticipation of such distributions, the Special Master has decided to hold on to the partnership units in his control. If the partnership liquidations are effected before December 2004, the Special Master expects to make final payouts in 2004 or early 2005 to the investors who sold their units to the defendants from the total funds collected.
In December 2005, the Special Master distributed approximately $360,000 to eligible claimants. There are no further monies for distribution.
If you have questions, you can contact the Receiver at:
Russell C. Weigel, III, Esq.