Things are moving along in the A&O entities bankruptcy proceeding in Chicago. Here is an interesting motion that A&O filed asking the bankruptcy court the allow A&O to borrow from the cash values of the policies in order to pay the premiums. Here is the policy list attached to the motion. According to the motion, A&O’s life insurance policies have a face value of $178 million, but cash value of only $3 million. That does not sound like a lot of cash value for $178 million in policies. The motion also states that all of A&O’s “reserve funds” for policy premium payments were given to Prestige Title and are now tied up in the Colson litigation.

In the Colson litigation, A&O and Russell Mackert stated that A&O deposited $4.6 million with Prestige Title in February 2008. The money was to be used to pay the premiums on A&O’s 57 policies. The monthly premiums on the policies was $120,000. When Colson and Prestige’s accounts were frozen in early 2009, there should have been around $3 million left to pay A&O’s premiums. At $120,000 a month, that’s 25 months worth of premiums left in early 2009. But since we are now deep into 2009, there would still be only around 15 months of premiums left from “all” of A&O’s reserve funds–not a lot of time when you are waiting for people to die of natural causes so you can collect the face amount of the policies. So it looks like the Colson litigation only accelerated A&O’s implosion rather than causing it.

What was A&O going to do at the end of 2010 when its “investments” imploded? More importantly, where did all the investors’ money go? A Forbes article estimated that A&O investors are out tens of millions. A single investor is out $10 million and there are other known individual investors who are out over $1 million. What happened to all that money? Is the bankruptcy trustee going to track it? Is the justice department?

The second biggest mystery involving A&O after the question of where the money went is: who actually owns A&O? Judge Sul Ozerden kept asking that question in the Colson litigation and never got an answer before he remanded the case to state court. There, as in the bankruptcy proceeding, A&O and Mackert claim that Physician’s Trust LLC bought A&O, asked Mackert to manage it and then disappeared. Literally. The supposed owner of A&O paid millions for the company to Adley Wahab and his partners and then disappeared without a trace? And they can’t be found? That makes no sense and just defies all credibility. I don’t believe it. No one believes it. I suspect that one day the truth will emerge, and I can’t wait to hear it.