Steve Labriola found himself abandoned by TelexFree's owners and left to face the company's affiliates alone after its emergency Chapter 11 bankruptcy filing over the weekend. He appeared telephonically on a hastily announced call, sounding more like a spectator than corporate management. Labriola provided what little information he had, attempting to appease the company's affiliates.

"There are tons of questions out there I know, and I don't have all of the documentation back from our lawyers on the things that I can and can't say," Labriola stated. He claimed the Chapter 11 filing would help TelexFree "reboot, rebuild and reformat" the company to move forward. He called it "the best thing going forward."

Stuart Macmillan, TelexFree's CEO, was absent from the call. Labriola attributed this to Macmillan being "on a plane, heading down to meet with the new platform company."

Labriola offered an anecdote to guide affiliates' feelings about the company's inability to pay them. He recounted a call with senior management and an IT employee named Jay. "When we told him what we were doing, his comment: 'That is the best news I have ever heard. The most awesome thing for this company right now to move forward.'" It remains unclear if Jay, like many affiliates, invested heavily in the scheme and now faces significant losses.

Labriola promised to schedule another call to address "at least ten or twelve questions and answers." He stated he needed legal approval before discussing certain topics. A primary concern for all TelexFree affiliates involves the fate of their invested money. Labriola also promised daily updates, leaving affiliates to wait for actual answers.

Meanwhile, Carlos Costa, Labriola's Brazilian counterpart, appeared in a video to criticize the Brazilian government. Costa declared that despite the US being "a country with severe laws," TelexFree's bankruptcy was granted there, while Brazil had denied it twice.

Costa's information about the US bankruptcy proposal proved inaccurate. On April 14, the Nevada Bankruptcy Court issued a notice informing TelexFree that it had rejected their proposal. The court cited an "incomplete and/or deficient" filing. TelexFree failed to provide no fewer than thirteen required declarations.

The company's legal team appears to have a track record of issues. TelexFree's Brazilian representation lost over twenty appeals in Brazilian courts. In one instance, an appeal was rejected because the legal team neglected to pay a roughly $100 filing fee. TelexFree has until April 28 to file the missing declarations. One declaration requires the bankruptcy filing to be made under penalty of perjury. Whether TelexFree files anything further remains uncertain.

Costa's video also asserted that TelexFree had to file for bankruptcy in the US because Brazilian assets have been frozen since June 2013. However, TelexFree's 2013 profit and loss statement, recently made public, showed a net income of $36 million USD. In the same year, the company paid $29 million USD in Brazilian tax fines. Costa even made a video about this fine, praising the speed and efficiency of its payment.

The origin of these payments raises questions, given that TelexFree's Brazilian assets are tied up by an ongoing regulatory case. The substantial fines likely contributed to TelexFree US running out of money. Jozelia Sangali, Costa's wife, withdrawing $1.34 million from TelexFree also did not help the company's finances. Neither Costa nor Labriola have openly shared these details with affiliates.

As of publication, the SEC has made no public move regarding TelexFree's bankruptcy application.