MIAMI (CelebrityAccess MediaWire) — After a recent article in CelebrityAccess detailing the affidavits filed by Michael Goldberg, the court-appointed receiver of Jack Utsick's WorldWide Entertainment and a forensic accountant, Jack reached out to us hoping to set the record straight on what he contends are misrepresentations of the facts of the case.
Utsick's attorney, Richard Kraut first raised issue with the SEC's contention that Utsick misled investors, promising them high returns on money invested in every instance in specific projects. Kraut claims that this wasn't the case in all instances and to support his contention, Kraut supplied CelebrityAccess with a number of samples of disclosure statements made in "private placement memoranda" related to Worldwide Entertainment funds.
One example of such boilerplate: "The funds loaned to TEGFI(The Entertainment Group Fund Inc.) will be used by Jack Utsick in his sole discretion during the term of the loan to fund an unspecified number of concerts and productions." Kraut also pointed out that the offering materials uniformly warned that the investments were highly-risky and that investors could stand to lose their investment.
Utsick also takes issue with the notion that most of his investments weren't sound and he points at the profit realized by Goldberg subsequent to his assuming the role of receiver. As revealed in reports compiled by Goldberg, many of these ventures turned out to be quite profitable.
Case in point: the 1365-capacity Keswick Theatre in Philadelphia. Te venue was acquired by A Worldwide associated investment vehicle for $900,000 by TEGFI. Goldberg, acting in his capacity as receiver, recently divested the property and realized a net profit of $2.9 million, a return of 300%.
A similar story can be told about the Royal Oak Music Theatre in Royal Oak, Michigan. In 2003, Worldwide entered into a long-term lease of the venue for $400,000 in a deal that provided, among other things, booking rights to Worldwide. While Worldwide was, for many reasons, unable to make a go of the venue at that time, Goldberg successfully interested AEG to take the lease over for the price of $475,000.
Two Miami condominiums appear to be similarly profitable. One of the two units served as an office for Worldwide-associated ventures, while Utsick resided in the other. Since then, Goldberg has sold one of the two units, clearing $1.8 million in profit. The remaining unit is clear of liens and mortgages but has yet to sell in the currently challenging real Florida estate market.
Furthermore, Jack wished to make it clear that while he was at the helm of Worldwide, he never accepted a salary with the exception of a ten month period in 2004 when, at the advice of a professional, he drew an annualized salary of $84,000 over a ten month period instead of utilizing money from the funds to cover personal expenses. In lieu of a salary, Utsick had paid for personal expenses from his businesses and except for one year, this amounted to less than $300,000 annually, an amount Utsick's attorney contends is far less than other entertainment executives make in similar positions.
"I didn't even take a salary until the end and it was only $100,000 a year. That's ridiculous." Utsick said.
Utsick also vehemently disputed the notion that he had a yacht which was paid for by Worldwide-associated investment funds. According to Utsick, A yacht was owned by one of his business partners, Robert Yeager and a loan may have been made in connection with the yacht, but it was never owned by Jack Utsick.
Another point of contention for Utsick was the SEC's characterization of a visit in 2005 to an adult entertainment club identified as "Divas" in Venezuela, that was expensed to Worldwide to the tune of $4,800. While Utsick doesn't deny that he did visit the club, the visit, he says, was motivated by an important client and that it was in the interests of the furtherance of his business.
"I went down there to meet with them about a major artist who was doing a big show down there. He decided he wanted to go to an adult club. I paid for some of it because I wanted the artist in America so I paid half of the bill." Utsick said.
Kraut also wished to clarify the nuances of his client's legal position. According to Kraut, Utsick has neither conceded or denied the original allegations leveled by the SEC, but he does intend to attempt to refute specific allegations made by the SEC in its pending benefits disgorgement and penalty motion and hopes to support his case through the discovery process.
Jack Utsick remains committed to restoring his reputation and he wished to make it quite clear that he feels unfairly pursued by the SEC.
"I took this company from number 48 in the world to number 2 in ticket sales." Utsick said, "We were building a real company." – Ian Courtney