Drilling For Dollars
Michael I. Goldberg, the court-appointed receiver in last year’s suit filed by the Securities and Exchange Commission against concert promoter Jack Utsick and two of his former partners, has requested $1.8 million of the receivership’s remaining funds to acquire oil and gas rights and start drilling for the black gold in Louisiana.
Of the numerous receivership entities evaluated by Goldberg for financial viability in the last year, it appears the oil business is one from which investors could recoup some of their money.
Goldberg learned of the oil and gas wells owned by Robert and Donna Yeager, which are among the assets frozen by a U.S. District Court in Florida, shortly after becoming receiver in the case against them and Utsick. The Yeagers and Utsick were partners in Worldwide Entertainment Inc. and other related companies put in receivership. The SEC last year accused them of bilking some 3,000 investors of more than $300 million between 1998 and 2002.
During a New Orleans visit by Goldberg, the Yeagers told him they had a "pending investment" that was solely funded from the Yeagers’ personal assets – an oil and gas well prospect in southern Louisiana. In addition, the Yeagers said they transferred $1.1 million of their personal funds to a Dallas broker for their share of drilling expenses.
Goldberg met with the Yeagers’ partner in the venture, Browning Oil & Gas, in Dallas with the goal of having their escrowed funds returned for the receivership, and learned the oil well was expected to be profitable.
Goldberg asked Browning to not only return the escrowed funds but to also buy the Yeagers’ interest in the oil well. But to Goldberg’s surprise, Browning apparently jumped at the request and submitted a written offer for approximately $1.3 million.
Browning’s "enthusiasm," according to court documents, piqued Goldberg’s interest in learning more about the well and, ultimately, he hired a Texas geophysicist to review the well data and determine if it was indeed viable.
The report came back recommending that only a portion of the asset be sold back to Browning and the rest kept as an investment for the benefit of the receivership.
A second geophysicist, located in Louisiana, reviewed the data including that of neighboring oil wells and pronounced that the oil well "was one of the more promising prospects he has ever seen and has a significant potential value," according to Goldberg’s report.
Goldberg discussed the oil well with the receivership’s Investor Advisory Panel, which recommended going into the oil business based in part on its opinion that although WE’s creditors will not receive all their money back, most would prefer to "take the potential of a very healthy bird in the bush rather than the sickly bird in their hand."