Judge Worried MedCap Investor Payouts Could Shaft Creditors

Law360, Los Angeles (September 19, 2012, 9:25 PM EDT) -- A California federal judge on Wednesday raised concerns that a proposal by Medical Capital Holdings Inc.'s receiver to distribute money collected from litigation over the company's alleged $1.7 billion Ponzi scheme solely to investors would unfairly deprive creditors of recovery for their losses.

U.S. District Judge David O. Carter took issue with receiver Thomas A. Seaman's proposal to segregate funds collected through the sale of MedCap assets and civil ligation over the scheme and leave creditors to claim just a share of the $105 million collected...
To view the full article, register now.