Securities and Exchange Commission v. Nadel et al

Filing 1415

NOTICE by Burton W. Wiand re 1412 MOTION for miscellaneous relief, specifically to Overrule Objection to Claim 17 of filing Redacted Exhibits 1 and 5 (Attachments: # 1 Exhibit 1, # 2 Exhibit 5)(Perez, Jared)

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I EXHIBIT 1 -- - · . -·- · -·-· .. - J~I <;A Ruth P. Artlsuk ea t. ~ ...... . ... _ -- -- ---------- Sep 22 01 05:16p :(j) Quest Energy Management 325-762-3284 p.3 l Amount Loaned:$- - - - - Number of Notes; _ _ _ _ __ O}JpsTIJi ENERGY MANAGEMENT GROUP INC0R.POltATCD SUBSCRIPTION DOCUMENTS OFFERING OF SEVENTY (70) SENIOR PREFERRRED NOTES WITH CONVERSION OPTION FIFTY THOUSAND ($50,00Gj DO:..LJ'..~!;; f'~~ SUBSCRIPTION INSTRUCTIONS (please read carefully) 30 r.:~::: -21-09;15:29 ;Quest_Energy_Management_Group 13122400799 ENERGY MANAGEMENT GROUP INCOltf'ORATEO BROKER TRANSACTION RECORD KPC Production Project- Quest Austin Chalk Program (1,,.~,tn,rl, ,.r , .. :'"'-"'':' """" L - -•-&.l:rl.--A ":· ·~'." !'~-~?"' S;:-,.msor anu fully disclu:,ul in !he • ·-·····-··_:_ ••• -··-·· ..•.•... -, :... -J•·· _.. ,: :.. •:.• :':.::·;~.;;.:;; .4,i;;=-:ii1c:nt. Before rccommcndi11g purchase uf an ln~t. the undel"lligned ha~ a rea.9onablc grounds to hclieve, llnd in fuel believes on die basis of informution ~uppliod hy the [)l'OclpGC!ive invc:itor conoeming its invc:.'ltmem obJcctives, other investments, lin!lllcial &itu11tion and needs, anrl other peninent infonna!ion t!:~!: {~) !!!~ ;~::~::::·:: :::·::::!:: :: :::: ":::::-::'.::~.: :::·.:::::" :::: .:~!::::.: in Seel ion 501(a) of Regulation D of lhe Securitie~ Act of 1933, as 11mr11,:l~~ ...~.t '"'.':'~•-· •1 ~---:-- .. ,_, .·~ suitability and oth~:;:-~::-:-~..:-~:~ :::;·'··:·.:::-· :·:: =-~-• · ·• ·' · the prospective ir,ir·w~c:,; !,..:..~.: '····· -~~ ··, · ~~~: .... ~;::. - ....: : ... --~·-- ...... :... ______ ..... .., ______ ............- ......... -..................--...... , including los~ of investment and lack of liquidity; (c) there is an ndlXJUlllc plt,-CJ\i~1ing relotionshlp (one that ~~~~!':! !~ ~!!!~~~~!~ !~ ~-~!~~~ =::;::?::::!:;::.:!vr. :.a.cl f;;;uiicir1J circumsrnnccs oftht potcnliaf investor) •• . . . . . . ! . _ ! , . 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HUU.h.'-'Uh-'"'"J Vt lfll. jJH'-'•""-:tl.:f _t -·· uwu,6 UIC ll:UU U1 :~ ~--- -:~ -:-·:~~·::::: _::: • ••___:::.~.-.. ~ .-.. :~ .. ::.. :: •·•• •• ut ----··-··•· ,nc •• ~'-r~t;{Qf --·- _ ···----·- _ ---~,--· ------~ . . J)iu ,..rt...... ,..cj.t~- , ... , ... - .... ;...... ,i.,.. :"'~""··;--:-~: ....,. ~~!·:~stor. <'r~~~q~'f1Tt'f4::- ,,~k;,;~~f~'~;o/Zi;·•W~~R,tt~1'1~7¥fo4'.1 ~-c{•[c.e~~--A----·-· ~~i;7:f~~Rt~tj)f~::+;~-g.f,::£ ,~}>_.~,s.S-A_r-- ,_____ r.•.. Cily, State, Zip: ;C..~~-5.-~.-s:~-------;c L- __'.__~-=-- •~, ~~.~rwicll Flax:_ _ ....... ---------------·-·-·--··-- '\ \ \ I 11.. I ' e'I", ~ . .. ,, Dick Harris, Attorney at Law Law Office of Dick Harris, P .C. P.O. Box 3835 Abilene, TX 79604-3835 Phone (325) 677-3311 Hinds Square Building, Suite 103 100 Chestnut, Abilene, TX 79602 Telecopy (325) 677-3314 dharris_law_firm@swbell.net Certified in Business and Consumer Bankruptcy Law, Texas Board of Legal Specialization August 11, 2014 Mr. and Mrs. Alexander Artisuk Re: Case No. 14-10069-7; Jeffry Paul Downey and Pepper Marie Downey Dear Mr. and Mrs. Artisuk: I attended the second creditors' meeting for Jeff Downey on July 18. Mr. Downey appeared and answered a few more questions, but did not add much to what we already knew. He was told by the Bankruptcy Trustee to tum over a gun collection and a small amount of money that was on hand when he filed bankruptcy and the meeting was concluded. I have also spoken with the court appointed Receiver for Quest Energy Management Group, Inc: and-lie indicates that he wilTbenlmg mi objectioii'fo :tvfr:bowney'iciiscliarge.-Irso~ this shoufcf be beneficial to you and all investors as, if successful, it would mean that Mr. Downey would not . be lll:>le to esca ehis_Habili du~yo~ and all_the mvestors who wered~frauded. At this time, Tdo f< -. , _;f;s ;;i~Jt:ttg' _ _ :._;_, , JJ:V~ni: wil be l that a::'! happen, it is not likely that your spen ili!{money objecting a good investment as it does not appear that Jeff Downey has funds from which you could recover at this time. The Receiver is also attempting to collect from Paul Downey and that may be of more benefit to you in the future. Please call or write if you have any other questions. Yours very truly, LAW OFFICE By:_ _ _ _ _ _ _ _ _ _ _ _ __ DICK HARRIS DH:me C:ISharelWP-DIRSIArtisuk\c/ient Z/et 8-/ 1-14.wpd Dick Harris, Attorney at Law Law Office of Dick Harris, P.C. Hinds Square Building, Suite 103 100 Chestnut, Abilene, TX 79602 Telecopy (325) 677-3314 P.O. Box 3835 Abilene, TX 79604-3835 Phone (325) 677-3311 dharris_law_firm@swbell.net Certified in Business and Consumer Bankruptcy Law, Texas Board of Legal Specialization May 20, 2014 Mr. and Mrs. Alexander Artisuk Re: Case No. 14-10069-7 Jeffiy Paul Downey and Pepper Marie Downey Dear Mr. and Mrs. Artisuk: I attended the creditors' meeting in the Jeff Downey bankruptcy case as you requested. Mr. Downey appeared with his wife. Also in attendance were a representative from the United States Trustee's office and Harvey Morton, Mr. Downey's Chapter 7 bankruptcy trustee. Mr. Downey testified that he is living in a rented house in Abilene, Texas; that he is cun-ently unemployed and his "family" is giving him approximately $4;000.00 per month to live on. He claims he owns no real estate, that he has two vehicles which are financed, that he has already cashed in his IRA and pension, and that he has no other assets. Mr. Downey "forgot" to list that he owns seven guns, three of which he has recently sold. He also testified that he sold his wife's gold necklace. Mr. Downey testified that Quest started in 2005. He was initially Vice-President but has been President for the past two years. He testified that his salary was $190,000.00 per year and that his father's salary was $162,000.00. He claims he had none of the books and records but he did have a list of investors so that is how he listed you in his bankruptcy. Mr. Downey claimed he had no interest in any other corporations although it was revealed that he is ihe Registered Agent for a corporation his father recently formed. The Trustee was not satisfied with Mr. Downey's answers in many area~ and continued the meeting until June 19, 2014 at 3:00 p.m., when Mr. Downey will be expected to appear and bring additional dQcuments. Since I spoke with you, I have also been contacted by an attorney in Atlanta representing investors who lost over $2,000,000.00, and the Receiver for Quest Management Group who has been pursuing Mr. Downey and his father. Whether or not the Trustee, the Receiver, or anyone else pursues Mr. Downey fm1her will probably depend on his answers at the continued meeting on June 19. I will update you following that meeting. Call or write if you have any questions. US. BANKRUPTCY COURT NORTHERN DISTRICT OF TEXAS ENTERED TAWANA C. MARSHALL. CLERK Till, DA TE OF r?.NTR\' IS ON THE COl lRT'S DOCKET The following constitutes the ruling of the court and has the force and effect therein described. Signed September 24, 2014 United States Bankruptcy Judge BTXN 077 (rrv. 10/02) UNITED STATES BANKRUPTCY COURT NOH.THERN DISTRICT OF TEXAS § In Re: Jeffry Paul Downey Pepper Marie Downey § § Dehtor(s) Case No.: 14-I0069-rlj7 Chapter No.: 7 & ~ The Court, after review of the file and docket in the above entitled and numbered case, finds that an onier discharging the debtor was inadvertently entered, due to clerk's error. on 9/22/14; it is therefore ORDERED that the above referenced onier is set aside and VACATED. # # # End of Order# # # nu 1-n '7.c.on~n,-i 1.'71.n-i ,. (j) B18 (Ofiklal Form 18) (12/07) United States Bankruptcy Court Northern District of Texas Case No. H-10069-rlj7 Chapter7 In re Dchtnr(s) (namc(s) used by the debtor(s) in the last 8 years, including married. maiden, trade, and address): Jeffry Paul Downey Pepper Made IJowney Social Secmity / Individual Taxpayer ID No.: Employer Tax ID / Other nos.: DISCHARGE OF DEBTOR II appearing that the debtor is entitled to a discharge, IT IS ORDERED: The debtor is granted a discharge under section 727 of title 11, United States Code, (the Bankruptcy Code). BY THE COURT Dated: 9/22/14 Robert L. Jones United States Bankruptcy Judge SEE THE BACK OF THIS ORDER FOR IMPORTANT INFORMATION. 030147 76605030177017 PROOF OF CLAIM FORM SECURITIES AND EXCHANGE COMMISSION, Plaintiff, V. ARTHUR NADEL, SCOOP CAPITAL, LLC, SCOOP MANAGEMENT, INC., Defendants, SCOOP REAL ESTATE, L.P., VALHALLA INVESTMENT PARTNERS, LP., VALHALLA MANAGEMENT, INC., VICTORY IRA FUND, LTD., VICTORY FUND, LTD., VIKING IRA FUND, LLC, VIKING FUND, LLC, AND VIKING MANAGEMENT, LLC, Relief Defendants. Name and address of Claimant (Please print or type): l-(u-r tt P ~) }1LtXA"1i>t:l(.A, AR,1..SJ I Case Number:8 :09-CV-00087 -T-26TBM U.S. District Court Middle District of Florida (Tampa Division) ATTENTION: On May 24, 2013, the Honorable Richard A. Lazzara of the United States District Court, Middle District of Florida, entered an Order appointing Burton W. Wiand as Receiver of QUEST ENERGY MANAGEMENT GROUP, INC. ("QUEST"). On June 17, 2016, the Court issued an Order establishing a Claim Bar Date for all claims and approving this Proof of Claim Form and the basic procedures to administer any claims. To be eligible to receive a distribution from QUEST's assets, you must complete and return this entire Proof of Claim Form and provide the requested documentation, so that it is received on or before October 12, 2016, to Burton W. Wiand, Receiver, c/o Maya M. Lockwood, Esquire, Wiand Guerra King P.A., 5505 West Gray Street, Tampa, Florida 33609. The proper filing of this completed claim form may entitle you to receive a distribution from the Receivership. Altered forms will not be accepted. The information provided in this Proof of Claim Form will be used to calculate your distribution, if any, from the Receivership. The Receiver has the right to dispute and/or verify any information you have provided in order to determine the proper distribution amount, if any, to which you may be entitled. IMPORTANT INFORMATION TO READ PRIOR TO SUBMITTING THIS FORM ANY PERSON OR ENTITY SUBMITTING THIS PROOF OF CLAIM FORM SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA FOR ALL PURPOSES, INCLUDING, WITHOUT LIMITATION, AS TO ANY CLAIMS, OBJECTIONS, DEFENSES, OR COUNTERCLAIMS THAT COULD BE OR HAVE BEEN ASSERTED BY THE RECEIVER AGAINST SUCH CLAIMANT OR THE HOLDER OF SUCH CLAIM IN CONNECTION WITH THIS RECEIVERSHIP, INCLUDING THOSE ARISING OUT OF (1) ANY DEALING OR BUSINESS TRANSACTED BY OR WITH QUEST OR (2) ANY DEALING OR BUSINESS TRANSACTED THAT RELATES IN ANY WAY TO ANY RECEIVERSHIP PROPERTY. FURTHER, CLAIMANTS WAIVE ANY RIGHT TO A JURY TRIAL WITH RESPECT TO SUCH CLAIMS, OBJECTIONS, DEFENSES, ANO COUNTERCLAIMS. IF THIS COMPLETED FORM, SIGNED UNDER PENALTY OF PERJURY, IS NOT RECEIVED BY THE RECEIVER AT THE ABOVE-REFERENCED ADDRESS BY OCTOBER 12, 2016, YOU WILL BE FOREVER BARRED FROM ASSERTING ANY CLAIM AGAINST QUEST AND ITS ASSETS AND YOU WILL NOT BE ELIGIBLE TO RECEIVE ANY DISTRIBUTIONS FROM THE :C' f IVtl\ RECEIVER. .. l, SEP 16 20f6 Page 1 of 5 j ; ,-,11· ... ..,.., _ _ _ s,»•_,..,,~ .... -· .- • •• ···- 0020 General Instructions: You J!!Y!! answer each and every question. Please answer each question as fully as possible. If you need additional space to complete an answer, please attach a separate sheet of paper and indicate the number of the question for which you are providing the additional information. If the question does not apply to you, please write "not applicable." If the answer to the question Is "no" or "none," please answer as such. · 1. Full name, current address, telephone number, and email address of the Claimant (the person or entity making this im to QUES~assets)._.,.._ _ _ _ _ _ _ _ _ _...,..__ _ _ _ _ _ _ _ _ __ vTl-t- _.....__ _ 2. If this form is being completed by a person other than the Claimant or on behalf of an entity, please provide the full name, address, telephone number, and email address of the person completing this form and the basis for that person's authority to act on the Claimant's behalf._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 3. If this form is being completed on behalf of an entity, please provide the full name of the entity and all of its trustees, officers, directors, managing agents, shareholders, partners, beneficiaries, and any other party with an interest in the entity. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ A-P.p J...I (l.r1 Bi.--.E. 4. Provide one mailing address where the Claimant authorizes the receipt of all future communications relating to this claim, including any possible distribution payment the Claimant may receive. It is the Claimant's sole responsibility to advise the Receiver of any change to this address after the submission of this form. [ ~eek here to use the same address provided in response to question number 1. Use the lines below to designate a mailing address different than the address provided in response to question number 1. 5. Provid~the basis for your claim (please check applicable boxes): M'lnvestor [ ] Provided Goods or Services to QUEST [ ] Other (specify basis) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ If you are not an investor, write "Not Applicable" to questions number 6 through 13. If you are an investor, write "Not Applicable" to questions number 14 through 16. All Claimants must answer question number 17. Page2of 5 0020 ./"' /, (_1) Questions Specific to Investors 6. Please provide the following information regarding your investment in or with, or interest in QUEST or any project or venture promoted by QUEST, and attach copies of all checks, bank or other financial account statements, invoices, wire transfer confirmations, and other documents relating to your answer. 1st investment in or with QUEST: $~fJ4. Ooo -,.;;, c'. tot~ 0 °~ /!)/) and was made on (or indr/'i?~r) made payable to - - - - with "C'tAT£ BAAJ IC .:Z.7 ~IJf?~ t 1£.. ~" 0 (date); through a check and drawn on account number {identify financial institution). '"t5 F- .1),4-Vt,5 [)AVIS , L. 6 ' &111,-u;~ /0/9 If applicable, 2nd investment in or with QUEST: J/ totaled$ /v1 ____ (date); through a check (or wire ___c and was made on __ 0 transfer) made payable to t/4 -;/i'--ei_______ and drawn on account number with --~--"-o _ _ _ _ _ _ _ _ _ {identify financial institution). _ If additional investments were made, please attach a separate sheet identifying (1) those amounts, (2) the dates on which they were made, (3) the payee of the check (or recipient of the wire transfer), and (4) the account number and financial institution on which the check was drawn or the wire transfer initiated. Total amount you invested with QUEST: $ 7. /jj a ~ ,pO /0° Have you ever received any money from QUEST, including as an "interest" ayment or "return of principal" on your investment or for any other reason? ✓'Yes ___ o. If yes, please provide the following information for each amount received, and attach copies of all checks, bank or other financial account statements, wire transfer confirmations, and other documents relating to your answers. Date if~ ). 0 tJ1 A. ~,"µj/1~ JQ'J..t>tOB. ° C. Amount R 7/1:i..fttJ ).{), 1- 01 Jq ,-l)f0 o. ~ '"/;,;/to r I ,.J. / tJ Reason for Payment Payor/Payee of check/wire /;l,t). t-}-o /J.33-,0o t214• Jt, o3/JJ.1,/to ~ 5 ~ ~f'!!rrl Pl/~ l;\ !Alr -A,t-- ~ ~J-1-e.! ,, ,4-tJ I I t. ' ' ,s1- 3 t f I 2.octf 7--0/11> ~ c., If any additional amounts were received from QUEST, please attach a separate sheet identifying those )- ~,eJv,) amounts, the dates on which they were received, the payor and payee of the check(s) or wire transfers, and oJfli the reasons for the payments. Total amount you received from QUEST, S 15P7, ,fZ ( +Jz;.,, ~ 1-k-~) 8. State the total amo"!:of .your claim (this is the amount that you are claiming you are owed from QUEST): $ . f/71 z;l,lf: va ~ 5/ !,12-- /;i._5:J ~~~ ~ 4 J f31 ~ s::. itf:2.,15vc) 0 4 ~ r,"L~/.2- "u/ ~·~'J::: 0020 /iJ ' ') 9. Did you receive any other funds or anything of value other than money (for example, a car or shares of stock) from QUEST, · Paul Downey, Jeffry Downey, or anyone acting on their behalf? _ _ Yes ·;/ No. If yes, please identify how much or what you received, from whom, the date it was received, and the reason it was paid to you. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ 11. Please explain the way in which you came to learn about QUEST and thereafter invest in or with it, including the person who introduced you to this entity, the statements made by that person, any documents provided by that person, meetings you had with the representative(s) of those entities, information that you relied on, and any other information. . •-:J n I IA w,/(5,, f'N, D ✓/501<. L_?ol3 DASS~Rl p+ uJlfRK/--t~AI.S / f3Rcd,(g ,MALS n p f_l) DU C.T tDIU PRo-::S-E~-- 'l)E,sr A-u.s-r11v {!_ f!IJ Lf::::._ Ro6-?I-V'1 $CH-]) 1-'1t' .5[' /t!Jff_ RfFFEf<f!'P J{01C5 ·tvR A J jR ftJ\{-zs,-,/Vl[tJ, 8+/JI\J6 /tJ ~ ;A/re~~sr .AAIP ;;;i_s-6/4/<Erut<..v k k Ptt 1,!J 3 ·PR I L ;2 D /;? r yyi,c-~J-- VHA,"e✓-1 ~ i-t,-.e~ • -fu g '% a...,+ -Ckd-~ . {,S µJt( $ C<..- d c<l_ I'/ V. >I 1~ f: T/ ,e-EJJ C,, 10/.../ /( Pe 12. Are you related by blood or marriage to any of the Defendants rn this matter (see case ~cg~J1f~f> for names), s~agents, Paul or Jeffry Downey, or any current or former employee of QUEST? __ Yes __ No. If yes, identify to whom are you related and the nature of the relationship. • 13. Did you reczany commissions or other compensation of any nature from QUEST? __ Yes No. If yes, please identify how much or wl1at you received, from whom, the date it was received, and the reason it was paid to you. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Questions Specific To Non-Investor Claimants 14. If you were not an investor, state with specificity how you claim an interest in any distribution by QUEST (for example, you.provided goods or services to QUEST for which you have not been paid}._ _ _ _ _ __ No f A.Ph I UBhZ-: Page4of 5 0020 tJ", APPL/ 15. State the amount you claim you are owed by QUEST.$ e,_ f\ ,?;. L [ Attach copies of all documents relating to your claim {for example, copies of all invoices submitted to QUEST and copies of records of all payments received from same). If you delivered goods to QUEST, include a copy of the document confirming receipt by a representative of QUEST. 16. Identify your contact person or persons at QUEST. /vo"l /AV? L I c (\ &-€ Question for all Claimants: 17. Have you sued, threatened suit, or otherwise commenced any lawsuits, arbitrations, actions, or other proceedings, or made any demands against any person or entity relating in any way to your claim? v/ Yes _ _ No. If yes, please identify the nature and status of any such action, the n9me of the attorney who commenced the action, and any monies,,i;eceived. Cc- Pt e > A r-r?fcNt'P~ 7,-.f- f? D MCµ f E 5 /( t" Cc· I ✓ f j) ---- Cg ...$75 (fet:Aie,1 f'i.?t.11 .£)?_ A Please submit this completed and signed, under penalty of perjury, Proof of Claim Form and legible copies of all documentation requested in this form to Burton W. Wiand, Receiver, c/o Maya M. Lockwood., Esquire, Wiand Guerra King P.A., 5505 West Gray Street, Tampa, Florida 33609, SO THAT IT IS RECEIVED NO LATER THAN OCTOBER 12, 2016. YOU MUST PROVIDE COPIES OF ALL DOCUMENTS OR OTHER MATERIALS THAT RELATE IN ANY WAY TO YOUR INVESTMENT IN QUEST, OR, IF YOU ARE NOT AN INVESTOR, TO YOUR CLAIM AGAINST QUEST, INCLUDING COPIES OF YOUR CANCELLED CHECKS, BANK OR OTHER FINANCIAL ACCOUNT STATEMENTS SHOWING ALL TRANSFERS OF FUNDS BETWEEN (OR FOR THE BENEFIT OF) YOU AND QUEST, STATEMENTS FROM QUEST, WIRE TRANSFER CONFIRMATIONS, AND ANY OTHER DOCUMENTS REGARDING YOUR CLAIM(S). By signing below, I certify under penalty of perjury pursuant to Florida law that the information provided in this form is true and correct. If this claim is being submitted by more than one person, all persons submitting the claim must sign below certifying under penalty of perjury that the information provided is true and correct. . J d I . ~ Signature of Claimant: f;/,-~r-Ak~ £( ·±-:. t Uc/e,e4-~ J,_i, ~~~~~----'+-_;__--'-:-- a...-u.) Print Name:----------------+-..._.,......,.....__,_~-----------"----1'------'-J T H R I;:;:. u K. L · XAN'bE i< ,· 11 r ' ARTIs u /~ Date: _ _ _ -.L./_:3_-o_,/'--2._0_~_(, _ _ _ _ _ _ _ _ __ o_<i' _ Title (if any):_ __._K....,t_·,,- ,_~_t._..._p_ _-1...,z:,....o:~·_c~H~t-_12.-s_-_ _ _____ . .......(_c___H_c-_'_D_ f uBL ,c_ SC/--f co'->) Page 5 of 5 0020 @ f'l I· fh o 0 ,-1 i e5 /vt,/1 7 r~/;;_1/11 i,-e~ei v<ttl /,;l.3°3.06 I J-- &D. /J7 l r ' r • •cY • • • • • • • • • • • "v-:v-~-,,.._ • • • • Memora~um# _ _ _ _ _ _ _ __ CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM Ouf sTtti ENERGY MANAGEMENT GROUP 1,co1trOR.-\T(D A Delaware Corporation Senior Preferred Notes with Conversion Option 1~~~1- 1 ~ ~~ ~ • _,,, ,J- ,, ~e;t-3 -::;;> I I • I ·.• MINIMUftl PURCHASE: 1 Not~•· _ ~, ·. . . .. ..•. -1 O,%· ... '.-'_. R!l_.,·.t. ·-·.t;._R··:.•."·-.t. f.:.f_i··.-.·.a·.· -.. _. ·-· ·.J·•. '." .. ..•.·.!."_-• _ .· ·. ·•.' Mifufitt~DJte{J~nrt1r2 --..c··'•·rtel'1y··.... .-: ReclemptlonatM,t~rity~:12S¾'c.fjfie-tace·yalu~ per Note ~ _·. ·__ 1 ·.:·An.-.,··,···· .-.~_.u.·•a.-. .•-.-. e-•,•··.·_·.:_o·, .. I I I I 1czd:: ~ ~--::::~ ~::::-;;; ~-~:::;-.;:~;;;.;,;;t Group, Inc.. a Delawa,. corporation (hereinnftcr ~;,-od tu as the "COMPANY"), is offering by me;;-.; C: ui~ CG-tt:..;;.;-,;;.;,; r,iwaa.c, ria~'""''' Memorandum Seventy (70) Notes of $50,000 each In Senior Preferred Notes ("'Notes; to qualified investors who meet the Investor Surtabilily Requirements set forth herein (see "INVESTOR SUITABIUJY REQUIREMENTS"). Eadl Investor muat ae~ tc:- purchase the~~~::.~-:-:!,:-~:':~~:-~-~:---::---:· ~-- :-·:::~·-- =~~ ;-·7-: ~:- ::-.:.,, ~~-.-: •:v~...~~ ~ ~!..~~~~~:: .•..;:-:-:;;-:.;;;~ ..: ..:........ ,.,uv11 u ~ a , iii ~~ t-:-:~tt -::-::s::~~ !n ,:oee . i i;i\illiS uf THE OFFERING"). ~ ~~ying THESE SECURITIES ARE SPECULATIVE AND INVESTMENT IN THE NOTES INVOLVES A DEGREE OF RJSK (SEE ..RISK FACTORS") Sem,._ Per Unit Maximum !!~~ S50.000 S3. 50Q.01:':' p~ Commissions I • • • • • • u·_, m, __ ___-.. to Company S5000 S3-~-~ $45.000 $3. ~ 5~-~':'2 Quest Energy Management Group, Inc. 64 South Jacobs Street _A.!bany. Texas 76430 Telephone: (325) 762-3281 Facsimile: (325) 762-3264 The date of this Private Placement Memorandum is January 1. 2009 1263 From: QUEST OPERATING LLC To: ALEXANDER & RUTH ARTISUK Vendor Code Check Date ARTALE 03/30/2012 ------··----·---~ Check Amount $1,246.70 I Invoice# _ _ _ _ _J __ Invoice Aim.J. 103312012 1,246.70 I ) •,0% FULL !ST OUARlER ~ - ! ....... , .. ...., I 2-C:. c:i / /0 0 I • • - - , - - - - - : •• · - - - O fj Check Number A-1110702 1t?CT. ~ ENERGY MANAGEMENT GROUP INCORPORATED September 1, 2009 Mr. & Mrs. Alexander and Ruth Artisuk RE: Quest Energy Management Group KPC Production Project Dear Mr. & Mrs. Artisuk, We at Quest Energy Management Group, Inc. would like to thank you for purchasing a Senior Corporate Note on our KPC Production and Expansion Project. Enclosed are your executed subscription documents. As ~_not_e holder you ~~eWffi~'of.ilt' aQw.,9!~ntete~pa~aart!ef.tyl'<smrting~~ClJttar!E~~009. Along with your --mrest payments, there will also be periodic updates on Quest's progress on the KPC Project available on Quest Energy Management Group, lnc.'s website (www.questemg.CollJ.). Quest Energy Management Group, Inc. is a progressive company which focuses on Secondary and Enhanced Oil Recovery Technology. We are very confident that the· KPC Production and Expansion Project will be a success. Again, we would like to thank you for your support and we look forward to a mutually beneficial relationship with you. Best regards, ___,- ~~ti~~ Pre-sicfent/tana Vife ff''t'e'gar~~ , Q.y~btii1\ler.gy1~Matta1@~ffi"0t:tp- V: 325-762-3281 F: 325-762-3284 64 S. Jacobs St. Albany, TX 76430 www.questemg.com 08-2i-09; 15: 29 ;Quest_Energ.,_Management_Group 13122400799 # @ The investor Is PARTNERSHIP, CORPORATION, TRUST OR OTHER ENTITY, complete the following: The undersigned (airale one) [is] [is not] a foreign pert!"!e!~!°'i::', foreign corporation, trust or foreign estate (as defined in the Internal Revenue Code of 1986, as amended, and the treasury ragutatlons promulgated thereunder). Print Name or Entity: of Partnership, Corporatio·ii;·-frus°i"· Signature of Authorized Representative Title of Authorized Representative Print Jurisdiction of Organization or Incorporation Print Name of Authorized Representative Print Federal Tax Identification Number Print Addrnss of Residence: Pnnt Telsphone Number: _L_l _ _ ·--·-·····················-····-···········--····- ACCEPTANCE Th~ ~~;..-,s vf ~:-.e forc·g• o.ing·,·~·i··.··.·cj·u·,··d····j.ng.·.· :.tll.e ~u s.~ ..t•i,o.H;-described therein, are agreed to and .. . ,b, .. i.iP accepted on this·./~ ~ay_<>f ~pl,~ ~;:!-~,e~~:~c;;,:i C Quest Energy Management Group, lnc. 1 39 2/ 'i3 @ ENERGY MANAGEMENT GROUP INCO;~)f~o ~ATED 6 TO: FROM: RE: DATE: QUESTNOTEHOLDERS PAUL DOWNEY STATUS UPDATE MEMO OCTOBER 16, 2012 1 ,f~ Let me begin by thanking you for your support and patience as we continue to progress in the resolution of the Note redemption. At the April maturity date, we had what we believed to be a firm commitment from a local funding group to provide the necessary financing to retire the Notes. Due to internal problems with that company, including the sudden death of their founder, that financing never closed. At that point, we analyzed finding the best solution that we could have confidence in. Our decision was that a partial asset sale to a proven asset buyer with a successful track record of acquisitions in the Permian Basin would be in the best interest of the Note holders and Quest. The decision required us to develop an extensive data presentation for any prospective buyers to review. That package consists, among other items, of several third-party engineering reports, over 50 subsurface maps, historical production data, service contracts, testing results and various permit filings. Concurrently, Quest was drilling our first horizontal Caddo wel1, a significant step forward in Quest's long-term business development. Upon completion of the data package, we identified three qualified buyers and made those presentations. Of the three, two were interested in pursuing the acquisition. Of those two, we detennined to move forward with the prospective buyer that we believed offered us the best opportunity to close the transaction in the shortest time. As of this week that prospective buyer, a Fortune 100 Company, and Quest have met 2 of the 3 pre-conditions necessary to complete the transaction. Quest is confident that the third condition can and will be met, resulting in the successful closing of the transaction by year's end. We ask that you understand that this negotiated sale process has multiple moving parts and is structured in a way that enables Quest to retire all of the outstanding debt. We anticipate making a partial interest payment in the next 2-3 weeks, with the timetable ofredeeming the Notes by tile endoftheyeru- still in_place. As we move closer to completing this transaction, we will proviae -nior""e updates. -We appreciate your patience as we are moving to the positive conclusion of the note retirement process. V: 325-762-3281 64 S. Jacobs St. F: 325-762-3284 Albany, TX 76430 www.auestemg.com ENERGY MANAGEMENT GROUP INCORPORATED TO: FROM: RE: DATE: QUEST NOTE HOLDERS PAUL DOWNEY STATUS UPDATE MEMO NOVEMBER 27, 2012 I hope each of you enjoyed a Thanksgiving holiday that was just what you wanted it to be. In our last update, I presented the plan that we have been hoping to implement as soon as possible, optimally by the end of the year. It referenced a partial interest payment to be followed by the completion of the Note redemption process, following the successful closing of the asset sale to our respected prospective buyer. Part of that transaction requires us to meet 3 preconditions; as I said in the last memo, 2 of them have been met. The "one more step" stands at approximately 50% completion, thanks to the drilling and completion of a new well, and the re-working of several others. These moves are designed to increase our daily oil production totals, which insures that the sale price will be sufficient to repurchase all the notes at face value plus the bonus. We remain optimistic that we will be able to do that before the end of the year. If not, we plan on making at least partial interest payments by then. I am scheduled to meet with the buyers late next week to give them an update and review the steps we have taken to meet their conditions. I know some of you have had questions about our timetable and I would reiterate that this is a fluid process; we are complying with the closing requirements and have no reason to think that we are not on track; our feedback has been positive. I also wish to report that we have received an additional offer from another financially qualified buyer with fewer preconditions for closing the transaction, which would hopefully allow Quest to complete the process in a more timely fashion. This gives us all the more reason to appreciate your patience as we are moving to the positive conclusion of the note retirement. After the meetings, we will let you know those results. Thank you for your support. V: 325-762-3281 64 S. Jacobs St. F: 325-762-3284 Albany, TX 76430 www.auestemg.com ENERGY MANAGEMENT GROUP INCORPORATED QUEST NOTE HOLDERS TO: FROM: PAULDOWNEY RE: DATE: STATUS UPDATE MEMO DECEMBER 7, 2012 Quest Energy Management Group, Inc. has executed a definitive term sheet with a qualified financial group that, when closed, will result in Quest receiving the funds necessary to meet our obligations to redeem the outstanding notes. When we made the decision to re-capitalize Quest, our two priorities were to obtain a fair price for ALL of the investors and to close the sale by the end of 2012. The closing is subject to the normal conditions, which include adjustment for inventory, title insurance, operating and performance bonds. I expect we have, at best, a 50-50 chance of closing by December 31, 2012, but I have firmly believed that securing a fair price for all was a higher priority than the selfimposed deadline of December 31, 2012. We will apprise you when the details of the closing are finalized. Thank you for your understanding and patience during this complex process. Best Regards and Merry Christmas. V: 325-762-3281 64 S. Jacobs St. F: 325-762-3284 Albany, TX 76430 www,guestemg.com ENERGY MANAGEMENT GROUP INCORPORATED TO: FROM: RE: DATE: QUEST NOTE HOLDERS PAULDOWNEY STATUS UPDATE MEMO April 16, 2013 A pre-requisite of any prospective real estate sale, especially involving oil and gas properties, is providing the buyer with clear title. Quest was unexpectedly required to file an affidavit in this process of curing title in the case of our prospective asset sale. Quest counsel advises that both the Texas State Securities Board and the SEC will support the affidavit, which was filed yesterday. The affidavit was filed with the intention of providing the maximum security and protection for all note holders; that is accomplished, as it confirms your senior preferred position in the assets to be sold. While I understand that this report may raise more questions than it answers, it further supports our ongoing fiduciary commitment to all investors. This title procedure is not uncommon, and clears one more step in the completion of the asset sale. I continue to appreciate your support and patience as this process works out. V: 325-762-3281 F: 325-762-32&4 64 S. Jacobs St. Albany, TX 76430 www.auestemg.com I!!! 1111111111111111111 I 1 I 1II ,!J, I lII/J ! 11 J 1I1!J111I! II!! I II11IIIII I/ I/If11 , L0·68.Lvl: ~>f!iO!:?l:I 8l.l$ 060l 596E 0000 0hED 9t □ l 111111 1111111111111111111111 Ill II II II I II

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