A debt-restructuring plan devised by St. Anselm Exploration to repay more than $60 million to about 200 investors centers around a profit-sharing deal tied to the company’s oil, gas and geothermal reserves.
Accused by the Securities and Exchange Commission of running a Ponzi-like scheme that started to unravel in early 2010, company executives asked investors to pool their notes into a newly formed company that would reap profits meant for St. Anselm.
The company, SA Terra Net, was created in November after investors overwhelmingly approved the move.
St. Anselm executives, led by businessman Michael Zakroff, say the vote was one of confidence in the company’s ability to turn things around.
“We didn’t hide but stood up to do what needed to be done,” he said.
Many investors had promissory notes that matured in three years and paid monthly interest of up to 36 percent. Those were rewritten into five-year notes with 5 percent yields and bonuses.
SA Terra will hold all the new notes issued to the investors, most of whom live in New Mexico, and will share the profits of another company, Terra Caliente.
St. Anselm holds a majority interest in Terra Caliente, which in turn holds different levels of interest in several geothermal projects.
The deal calls for SA Terra to receive any profits due St. Anselm from Terra Caliente until the investors are made whole.
St. Anselm also has signed away 17 percent in limited profit interest in Terra Caliente to a variety of individuals employed by the company, including Steven Etkind, the company’s chief salesman of the promissory notes that drew the SEC’s interest.
Etkind is named a defendant in the government’s case.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
