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In recent weeks, there have been a greatly increased number of telephone calls to investors by companies or persons wishing to acquire the remainder of the investor's claims, or in some instances indicating that more recovery may be possible than the anticipated 65%. In other instances, it appears that the callers actually indicated that they were "representatives" of Brasota. We did not and do not make such calls, nor did we give any information to anyone about the identity of Brasota’s investors or how much they've invested.

Certainly, some of these calls may be from legitimate "claims traders" whose business is acquiring claims at a discount and hoping that, upon ultimate settlement, they will recover more than what they paid for the claim.

On the other hand, some of the offers that have been made do sound "too good to be true". I think the investor group certainly at this point should be aware that anything that "sounds too good to be true, probably is."

In the confidence games scams, these are generally referred to as "recovery scams" or "reload scams". Most frequently, the names of the investors are readily obtainable from public records. As in all scams, the perpetrator does not have to "fool all the people all the time". If only a few people are scammed, the amount made by the perpetrator is substantial.

We would caution that anyone approached by individuals or companies desiring to acquire their claims to fully understand the offers being made. In no event should checks be written back to a solicitor, either as a fee for recovery attempts or based on checks that have been received in conjunction with any proposed transaction. In one hypothetical “recovery scam” scenario, a Brasota investor may be approached with the promise that they will be able to receive more than $0.65 on the dollar distribution -- but it will take a advance of say, $5,000, as a good-faith deposit, so that the individual who is indicating that our investor will receive more than $0.65 can afford to pursue the additional claims or recovery methods. I don't think I have to go any further on this one. The $5,000 check is cashed and no work is performed. That investor still will only get the $0.65 on the dollar that he would have received anyway.

Another scam scenario may be as follows: our hypothetical investor is approached and offered an amount which would achieve the anticipated $0.65 on the dollar distribution early; for purposes of this example, let's assume that the investor would still have $40,000 coming in future distributions. The buyer of the claim would forward a check for say $50,000 and instruct the investor to return $10,000 and keep the other $40,000. As it usually turns out, the $50,000 deposit is bogus, the $10,000 is cashed by the perpetrator and our investor's bank then looks to the investor to make up for the $50,000 "bad" deposit. This is a variation of the “Nigerian 411 scam” where individuals are looking to find a conduit to deposit bad checks and withdraw funds from those bad deposits before they are uncovered.

I would urge you that if you are contacted regarding: (1) the purchase of your claim or (2) promises that you can receive more than what you are otherwise getting under the proposed plan, that you contact your financial advisor or attorney and discuss the offers with them.

You also can become more aware of the scams by going to http://dialingfordeals.com/scam-alert.html or http://www.psc.state.pa.us/investor/brochures/olderamer.html.

Again, some of these calls to purchase your claims may be legitimate, but please be wary.

Best regards,

Brasota Mortgage Corporation

Gerard A. McHale, Jr.

Gerard A. McHale Jr.

Chapter 11 Bankruptcy Trustee