Ferrum victims may get one centralized place to file claims depending on how a judge in San Antonio rules.
Royal Lea, the attorney for Ferrum receiver John Patrick Lowe, filed a request in one of the Ferrum lawsuits to create claim forms and a process for paying them. The matter goes up for a court hearing on May 19.
Special note: If the claims process is approved, LubbockLights.com will publish copies of the claim forms and instructions in a follow-up story. Keep an eye on this page for updates.
If you’re new to the Ferrum story
Lubbock-based Ferrum Capital was accused of stealing millions of dollars from hundreds of people while it was under the control of Lubbock businessmen Joshua Allen and Michael Cox. Both are under indictment by a grand jury in San Antonio and their San Antonio business affiliate Brooklynn Chandler Will accepted a plea deal in March with sentencing to happen in September.
Lawsuits filed across Texas accused Ferrum of running a Ponzi scheme. Federal officials used the term in a press release but not the official criminal charges. Click here to see our ongoing in-depth Ferrum coverage.
Many Ferrum investors might have filed a claim when Ferrum co-owner Michael Cox filed for bankruptcy in Lubbock in 2024. But those bankruptcy claims have largely gone unpaid. The receivership is recovering a separate pool of money, Lea said.
“The receiver is attempting to collect funds from other sources. And so if the Ferrum investor wanted to participate in the recovery of funds from those other sources, that investor would need to submit a claim in the receivership,” Lea said.
“That investor would need to follow these procedures and meet this deadline and submit a claim into the receivership,” Lea further explained.
In the proposed process, Lowe would have the right to investigate and verify claims, court records said,
“The receiver [Lowe] will reserve all rights to object to any submitted investor claim form for any reason, including without limitation, failure to comply with any requirement set forth in the investor claims process,” the written request said.
The deadline, if approved in its current form, would be four months after the process starts. There would also be some latitude for extending the deadline. But, not coming forward would mean losing the right to make a claim against Ferrum later on.
And if there’s not enough money to pay everyone, Lowe could prioritize claims. There would also be a process for people to file an objection with Lowe.
Non-investors, such as contractors or other debtors, could also file a claim. And like the investor claims, not coming forward would mean losing the right to make a claim later on.
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Recap of other efforts
Not only are there ongoing lawsuits to recover money, but Ferrum did business with Texas-based Collins Asset Group which was later bought out by Oliphant. Lowe (the receiver) filed a claim in the Collins case and Oliphant has also been sued in the attempt to get back Ferrum money.
Collins and Oliphant are debt collection companies. Some of Collins’ uncollected debt profile was sold for more than $5 million – although there will be offsets for expenses.
Lowe also sued “net winners” who were early investors in Ferrum.
As of early April, that netted more than $800,000 to pay back Ferrum investor victims. Lowe’s bank account for Ferrum had more than $2.3 million set aside at that time with the hope of collecting more.
Lowe previously filed a claim in the Collins bankruptcy for more than $66 million. The case continues in San Antonio.
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