Utsick Saga Winds Down

What’s left of Jack Utsick’s Worldwide Entertainment companies continues to be wound down, with receiver Michael Goldberg’s latest status report.

The court-appointed receiver said he expects to issue in the fall a third round of reimbursements to creditors who lost money in what was eventually called a $300 million Ponzi scheme.

Goldberg’s July 25 report includes news that the receivership has sold its 75 percent interest in Germany’s Wuhlheide Amphitheatre and won an initial decision in World Wide New Zealand’s claim over its share of Quay Park Arena Management Trust that holds the lease to Vector Arena in that country.

A final decision in the latter case is expected shortly and can be appealed by Jacobsen Venue Management New Zealand and Jacobsen F.T. Pty, Ltd., which hold the remaining shares.

Also still to be disposed of is a 49.6-acre property near Jacksonville, Fla., which WWE purchased in 2003 for $1.5 million. Goldberg reports the court has granted permission to hire a broker to attempt to sell the property, which was originally intended to be developed into an amphitheatre. According to the report, the marketing plan for the sale of the property is being developed and the property will soon be listed at $1,499,000.

Utsick wasn’t the only one in hot water over the last five years. During the investigation into his finances, it was alleged an assistant, Lyn Chong, and her husband were feeding at the investor trough. Goldberg reports that the last unresolved issue – that of $1.5 million in taxes connected to an initial unlawful transfer of $5 million from The Entertainment Group Fund – has been returned to the receivership trust.

That leaves the matter of Utsick’s numerous life insurance policies, which, according to Goldberg’s report, have a combined death benefit of $54.2 million. The policies have been assigned to the Receivership and premiums ring up some $700,000 per year in costs, according to the report. While the estate’s Investor Advisory Panel recommends the premiums continue to be paid, Goldberg includes a caveat.

“The Receiver is mindful of the fact that the estate has paid more than $3 million in premiums since the commencement of the case and is not sure if the estate should continue paying the premiums as Utsick is currently residing in Brazil and the Receiver has no way of determining his health condition,” the report said.

Goldberg reports he is considering placing the policies in a trust, in which investors who choose to continue paying the premiums have the option of participating as trust beneficiaries as long as they pay a pro-rata share of the premiums.

“As a condition of this,” Goldberg wrote, “the Receiver will require that the trust reimburse the estate for the premiums it has paid to date in the event Utsick dies and the policies pay off.” Approximately $8.6 million is being held for the trust.

Utsick, whose companies sold enough tickets in 2004 to end the year as the world’s fourth-largest promoter, tentatively settled accusations of fraud the next year by the Securities and Exchange Commission, affecting more than 3,000 investors. By 2009, a final judgment of more than $5 million was levied against Utsick in a Miami, Fla., federal court, and Utsick moved to Brazil.