IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION

SECURITIES AND EXCHANGE COMMISSION,

* * * Plaintiff, * * v. * * REX VENTURE GROUP, LLC * d/b/a ZEEKREWARDS.COM, and * PAUL BURKS, * * Defendants. * *******************************************

Civil Action No. 3:12-CV-519

JOHNNY BELSOME, et al.s OBJECTION TO MOTION FOR ORDER APPROVING DISTRIBUTION PROCEDURES AND CERTAIN OTHER RELIEF NOW COME Johnny Belsome and seven hundred and thirty-nine (739) other interested parties, by their undersigned counsel, and file the following Objection to the Receivers Motion for Order Approving Distribution Procedures and Certain Other Related Relief: 1. On August 24, 2012, Johnny Belsome, Timothy Allen, Jody Hinkley, Donald

Marcel, Keith Hinkley, Starr Atchison, Edward Thiel, Brett Hunte and Tara Belsome filed a Class Action Complaint, No. 12-2173, against Rex Venture Group, LLC d/b/a ZeekRewards.com and Paul R. Burks, on behalf of themselves and those similarly situated around the world, in the United States District Court for the Eastern District of Louisiana. Since then, over one thousand unique individuals have contacted undersigned counsel to join in such lawsuit.

Case 3:12-cv-00519-GCM Document 177 Filed 12/27/13 Page 1 of 6

2.

On March 29, 2013, the Receiver filed a Motion for Order Seeking Approval of (1)

Claims Process, (2) Setting of Bar Date, and (3) Certain Notice Procedures. On April 22, 2013, Belsome and many of his fellow Movants herein Objected to such motion. 3. The crux of Belsomes Objection to the Receivers March 29, 2013 motion was that

the proposed Claims Process failed to provide for any mechanism for Claimants who wished to have their claim processed by an attorney or other qualified third party. 4. On May 8, 2013, this Court granted the Receivers March 29, 2013 motion, thereby The Claims Process thus

overruling Belsomes objections to the proposed Claims Process.

commenced on May 8, 2013 and closed 120 days thereafter. The undersigned filed individual Claims on behalf of each and every one of the 740 interested party Movants herein. 5. For each Claim filed by the undersigned on behalf of its clients, the email address

zeek@patrickmillerlaw.com was included as the sole contact address. Moreover, the undersigneds physical address was listed for physical correspondence, including but not limited to the eventual distribution of Claims proceeds. 6. On or about October 11, 2013, the Receiver sent notices to Claimants who failed to

produce all required information necessary to fully and properly process Claims. Several of such notices were sent to Claimants represented by the undersigned; in each instance, the undersigned received a notice identical to one sent directly to undersigneds clients. An example of such notice is attached hereto as Exhibit A. 7. Exhibit A, as every such notice was, was addressed to Claimant and did not

include a claim number or otherwise reference any particular Claim, affiliate or individual whatsoever. Nevertheless, the Receivership Team worked diligently and amicably with the

Case 3:12-cv-00519-GCM Document 177 Filed 12/27/13 Page 2 of 6

undersigned to procure all available information and supporting documents requested by the Receiver for each Claim filed by the undersigned. 8. On December 12, 2013, the Receiver filed its Motion for Order Approving

Distribution Procedures and Certain Other Related Relief (hereinafter, the Motion). There, the Receiver identified certain claims related issues it was seeking to redress, including but not limited to Claimants who filed Claims on behalf of other Claimants, and entities that improperly filed Claims with no obvious relation to ZeekRewards Ponzi and pyramid scheme. See Motion, pp. 6-7. 9. Furthermore, in the section entitled The Making of Distributions, the Receiver

proposes to make distributions solely to the holders of allowed Claims without regard to any Claim or interest asserted by any third party in such distribution. Motion, pp. 27-28. 10. And the Receiver seeks to make distributions directly to the holders of allowed

claims at the addresses set forth in the Claims asserted by such holders, as amended by such holder on the Claims Portal. Motion, p. 28. 11. It is unclear whether the Receiver was referring to the undersigned or otherwise

referencing any other attorney or law firm that filed Claims on behalf of any affiliate of ZeekRewards, or any other erstwhile creditor of Rex Venture Group, LLC. And whether the Receiver seeks to make distributions to the address listed in the individual Claims, or whether it seeks to distribute to Claimants at their last known physical address is, at best uncertain. The goal of the instant Objection therefore, is to facilitate the smooth and efficient processing of Claims made on behalf of represented Claimants. 12. A civil litigant does have a constitutional right, deriving from due process, to

retain hired counsel in a civil case. See Potashnick v. Port City Construction Co., 609 F.2d 1101, 1117-19 (5th Cir.), cert. denied, 449 U.S. 820, 101 S.Ct. 78, 66 L.Ed.2d 22 (1980). This right has

Case 3:12-cv-00519-GCM Document 177 Filed 12/27/13 Page 3 of 6

been considered so important that it has been extended to certain administrative proceedings as well. See, e.g., Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) (in welfare benefits termination hearing, recipient must be allowed to retain an attorney if he so desires). 13. Moreover, the foregoing considerations have prompted the United States Supreme Court to observe, in dictum: If in any case, civil or criminal, a state or federal court were arbitrarily to refuse to hear a party by counsel, employed by and appearing for him, it reasonably may not be doubted that such a refusal would be a denial of a hearing, and, therefore, of due process in the constitutional sense. Powell v. Alabama, 287 U.S. 45, 69, 53 S.Ct. 55, 64, 77 L.Ed. 158 (1932) (emphasis added). 14. There can be no doubt, therefore, that the seven hundred-forty (740) individual

Movants herein, as well as all non-moving putative Class Members, are entitled to legal representation in the instant Claims Process, if they see fit to so retain the same. As such, the refusal to consider Claims made by represented Claimants would violate said Claimants Constitutional rights to Due Process. 15. Consequently, to the extent that the Receiver seeks to prevent any Claimant from

retaining counsel to process his or her Claim, Belsome, et al. object thereto. Movants ask this Court to Order the Receiver to modify the Claims process in general, or the Claims Portal specifically, to allow for the processing of Claims by counsel or other qualified third party entities. 16. Additionally, Belsome, et al. ask this Court to Order the Receiver to add an

identifier, either a name, Claim number, or otherwise, in its correspondence with Claimants, so as to permit third-party Claims processors, including but not limited to the undersigned, to distinguish

Case 3:12-cv-00519-GCM Document 177 Filed 12/27/13 Page 4 of 6

between clients unique correspondence. To the extent the Receiver seeks to limit correspondence with Claims Counsel, Belsome, et al. object thereto. WHEREFORE, Johnny Belsome and seven hundred and thirty-nine (739) other interested parties respectfully request that the Court Order that the Receiver modify the Claims Portal to include a means for third party entities to process Claims on behalf of Claimants, such as the inclusion of an identifier or Claim number, in order to distinguish one Claim from another. Movants also ask this Court to clarify that they are entitled to legal representation in their Claims processing and as such, that the Receiver must honor the terms and conditions of Movants Retainer Agreements.

Respectfully Submitted, this 27th day of December, 2013. DUNGAN, KILBOURNE & STAHL, P.A.

/s/ James W. Kilbourne, Jr. James W. Kilbourne, Jr. North Carolina Bar No. 24354 One Rankin Ave., Third Floor Ashville, North Carolina 28801 Telephone: (828) 254-4778 Facsimile: (828) 254-6646

Case 3:12-cv-00519-GCM Document 177 Filed 12/27/13 Page 5 of 6

PATRICK MILLER LLC /s/ Marc R. Michaud Marc R. Michaud, La. Bar No. 28962 400 Poydras Street, Ste. 1680 New Orleans, LA 70130 (504) 680-4318 (Telephone) (504) 527-5456 (Facsimile) mmichaud@patrickmillerlaw.com (Email)

Certificate of Service I hereby certify that on December 27, 2013, I, electronically filed the foregoing document entitled REQUEST FOR INITIAL PRETRIAL CONFERENCE REGARDING THE SCHEDULING ORDER with the Clerk of Court using the CM/ECF system, which will send notification of such filing. /s/ James W. Kilbourne, Jr.

Case 3:12-cv-00519-GCM Document 177 Filed 12/27/13 Page 6 of 6