In re Raejean S. Bonham dba World Plus
Bankruptcy No. F95-00897
Unofficial Web Site

In a recent letter to BRA defense counsel, the trustee clarified his settlement posture with regard to BRA claims. For the benefit of BRA defendants who do not have attorneys, that settlement position is set out here. To find out more about settlement, please contact:

Cabot Christianson
Bundy & Christianson
(907) 258-6016


Brad Ambarian, Esq
550 W. 7th Ave, Suite 1650
Anchorage, Alaska 99501

Re: Bonham Recovery Actions
Adv. Case No. F95-00897-168 HAR
Our File No. 2096

Dear Brad:

Thank you for your letter of January 13, 1998. Because your letter raises issues common to the other BRA cases, I am taking the liberty of copying the other main BRA defense counsel with your letter and this reply.

The "100% of net gain plus 20% of invested funds returned" settlement proposal is a shorthand way to describe the settlement figure that will be acceptable to the trustee in the vast majority of the BRA cases. However, there are a sufficient number of nuances and qualifications to this general statement, that preclude the trustee from making single, formula-driven, unconditional formal offer applicable to all cases. The "100+20" concept should instead be viewed as both (1) an invitation to offer which will be seriously considered by the trustee; and (2) the basis upon which the trustee will be making offers in the future.

Here are some of the factors that the trustee will consider in evaluating or formulating such an offer:

  1. A BRA defendant making such an offer will need to be in compliance, to the trustee's satisfaction, with outstanding discovery requests and court orders.


  2. The BRA defendant and the trustee will need to agree on the defendant's investment history, and on the correct figure for funds invested and funds received. As you know, sometimes this is an easy process and sometimes this is not so easy. I have supplied you with a spreadsheet of all your clients, and while this spreadsheet does not include cash transactions and does not catch all name permutations (e.g. if Mary Smith marries and becomes Mary Brown), the spreadsheet is a good starting place.


  3. With respect to investments in the form of cash as opposed to check, adequate confirmation of such investment will need to be made. For example, a $5,000 withdrawal of cash from a savings account a few days before the date of a contract, will generally be sufficient.


  4. Any settlement amount must be within the trustee's court-approved guidelines set forth in docket #694. This means, for example, that for defendants that received any preferences, the settlement amount will be the higher of the "100+20" figure or the preferences (net of Section 547(c)(4) subsequent advances).


  5. Each settling defendant will be permitted an allowed claim against the estate equal to that defendant's net cash loss, after giving effect to the settlement. Defendants may choose to give up such a claim, but in that event will not receive any reduction of the settlement amount.


  6. The trustee may choose not to settle with certain BRA defendants on the "100+20" formula. Certain Bonham family members, and certain defendants charged with special knowledge or deemed particularly vulnerable on good faith grounds, may not be able to settle on this basis. This excepted group is small and its members generally obvious.


  7. In some cases (very few) where there have been previous settlement discussions at lower figures than the "100+20" amount, the trustee may settle in accordance with those previous discussions.


Once the funds invested and received by a particular defendant are straightened out, then any settlement offer, made now and in accordance with the above guidelines, has a very high chance of being accepted.

Let me know if this letter does not fully address your questions.

Very truly yours,

/s/Cabot Christianson


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