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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EXHIBIT 1
-- - · . -·- · -·-· .. - J~I
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Ruth P. Artlsuk
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Sep 22 01 05:16p
:(j)
Quest Energy Management
325-762-3284
p.3
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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
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-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
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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 ~---:-- .. ,_,
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suitability and oth~:;:-~::-:-~..:-~:~ :::;·'··:·.:::-· :·::
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=::;::?::::!:;::.:!vr. :.a.cl f;;;uiicir1J circumsrnnccs oftht potcnliaf investor)
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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<
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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
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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.
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SEP 16 20f6
Page 1 of 5
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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. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
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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
./"'
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(_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:
$~fJ4. Ooo -,.;;,
c'.
tot~
0
°~
/!)/)
and was made on
(or indr/'i?~r) made payable to
- - - - with
"C'tAT£ BAAJ IC
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t 1£..
~" 0
(date); through a check
and drawn on account number
{identify financial institution).
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If applicable, 2nd investment in or with QUEST:
J/
totaled$
/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.
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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
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Reason for Payment
Payor/Payee of check/wire
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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): $
.
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va
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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. .
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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
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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.
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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.
.
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Signature of Claimant:
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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-: ~:- ::-.:.,, ~~-.-:
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THESE SECURITIES ARE SPECULATIVE AND INVESTMENT
IN THE NOTES INVOLVES A DEGREE OF RJSK
(SEE ..RISK FACTORS")
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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
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Check Number
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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'f ~pl,~ ~;:!-~,e~~:~c;;,:i
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Quest Energy Management Group, lnc. 1
39
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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!!!
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