All the "Esmeralda" notes are legally voidable today !
The tax write off issue has been there all along. My IRS Auditor friend was surprised that there was ever a question about this. The Arizona Revised Statutes, Title 44, Article 14, 44-2001 is the remedy and provides all that you need !
A.R.S. Chapter 12, Article 4
44-2001. Voidable sale or contract for sale of securities; remedy
A. A sale or contract for sale of any securities to any purchaser in violation of section 44-1841 or 44-1842 or article 13 of this chapter is voidable at the election of the purchaser, and the purchaser may bring an action in a court of competent jurisdiction to recover the consideration paid for the securities, with interest, taxable court costs and reasonable attorney fees, less the amount of any income received by dividend or otherwise from ownership of the securities, on tender of the securities purchased or the contract made, or for damages if the purchaser no longer owns the securities.
AT THE ELECTION OF THE PURCHASER is the key phrase. You do not need to provide any evidence of collection attempts, or (as stated as "may") bring any action in court. You simply elect to void the the PPM contract. From the ACC Consent Order, Conclusions of Law ...
II. CONCLUSIONS OF LAW
1. The Commission has jurisdiction over this matter pursuant to Article XV of the 4 Arizona Constitution and the Securities Act.
2 . Respondents offered or sold securities within or from Arizona, within the meaning of A.R.S. §§44-l80l(l6), 44-l80l(22), and 44-l 80l(27).
3. Respondents violated A.R.S. § 44-1841 by offering or selling securities that were neither registered nor exempt from registration.
4. Respondents violated A.R.S. § 44-1842 by offering or selling securities while neither registered as a dealer or salesman nor exempt from registration.
Bingo, there it is! It is all that is needed to legally "void" your note.
However, you can only void the amount of your note LESS the interest payments you received. Very simply, if a note was for $100,000 and interest payments made on the note were $15,000 then the voidable amount (the tax deductible amount) is $85,000.
There is an unanswered are issue that my IRS Auditor friend is going to investigate further (I think that is code for "Can I legally give this additional advice"). That issue is "returning" the voidable amount to IPX. He wants to clarify how that affects any collection money you might eventually receive. He THINKS that since money is from the civil judgment, returning the cash value of your note to IPX has no affect on this. His initial comment was, since any money you get from the judgment is reported as taxable income, that all investors SHOULD void and return the cash value of their notes. "Returning the cash value" makes it taxable income for IPX.
We await the answer on this....