The legal saga surrounding The Ticket Reserve’s collapse looks to be nearing an end after a US court agreed to a plan that would distribute a fraction of the $33m claimed.
In 2016, the Securities and Exchange Commission (SEC) filed a lawsuit against Illinois-based The Ticket Reserve, as well as its chief fundraiser and investment advisor Ash Narayan, its chief executive Richard M. Harmon, and John A. Kaptrosky, the company’s chief operating officer, in the United States District Court for the Northern District of Texas, Dallas Division.
The SEC alleges that the defendants violated the anti-fraud provisions after several high-profile people, such as Denver Broncos quarterback Mark Sanchez, were scammed out of millions of dollars by investment advisers and the ticketing firm in what has been described as a Ponzi-like scheme.
The lawsuit accused Narayan of fraudulently channelling the money to The Ticket Reserve, a struggling online sports and entertainment ticketing business formed to help fans reserve face-value seats for sports events for which teams had not yet been determined.
Narayan, who was also a member of the company’s board of directors and owner of more than three million of the firm’s shares, channelled more than $33m of clients’ money to the business from 2010 to 2016, usually without receiving consent. In 2016, the Court also appointed Michael Napoli as Receiver over the ticketing company and its assets, which will remain in place until further notice.
In the most recent court document, filed on October 1, 2019, it was confirmed that all assets currently held by the Receiver, which amount to $1.5m prior to the payment of administrative expenses, and $621,467 after, will be distributed to investors.
However, the filing states: “Because there are not sufficient assets to pay all of the Investor Claims, the Court will not resolve any contests as to General Claims at this time.”
The General Claims refer to all unsecured claims against the Receivership Entities and claims against the defendants that are unrelated to TTR’s securities scheme, including debts arising out of the individual defendants’ other business ventures.
The court document concludes: “This plan does not discharge, settle or otherwise resolve any claim against any person other than the Receiver. The plan does, however, provide the sole method by which the Receivership Assets will be distributed and by which any person may be paid by the Receiver, except as may be separately ordered by the Court.”