dcgreceivership Uncategorized

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On June 2, 2016, the Securities and Exchange Commission (the “SEC”) filed a complaint against Richard W. Davis, Jr. (“Davis”) and the entities named below (the “Receivership Defendants”), alleging that Davis, through the Receivership Defendants, raised at least $11.5 million through the unregistered sale of securities and failed to disclose to investors that the majority of the funds raised were either transferred to entities owned or controlled by Davis or transferred Davis in amounts in excess of the management fees that he had represented to investors he would be entitled to.  The SEC alleged various violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and certain rules established under those statutes.  In the complaint and a subsequent motion, the SEC requested that the Court appoint a receiver for the entities listed below to marshal the assets of the Receivership Defendants in an orderly fashion and determine whether and to what extent the funds may be repaid to investors.

Without admitting or denying any of the allegations in the SEC’s complaint, Davis consented to entry of a judgment in the Civil Action. On June 3, 2016, the Court entered judgement against Davis, which, among other things, permanently restrains and enjoins Davis from engaging in any further conduct that would violate the Securities Act of 1933, the Securities Exchange Act of 1934, or the Investment Advisers Act of 1940 and also requires Davis to disgorge funds in an amount to be determined by the Court upon a future motion by the SEC.  Davis also consented to the appointment of a receiver.

Accordingly, on June 8, 2016, the Court appointed the Receiver to take possession, custody, and control over all of the assets belonging to the Receivership Defendants or any of their subsidiaries, successors, and assigns (the “Receivership Estate”).  In addition, the Receiver has been directed to liquidate the assets of the Receivership Estate, conduct a claims determination process, and disburse the funds in the Receivership Estate to holders of allowed claims based on a distribution scheme to be approved by the Court in the future.

The Receivership Defendants include the following:

  • DCG Real Assets, LLC
  • DCG Commercial Fund I, LLC
  • H20, LLC
  • DCG PMG, LLC
  • DCG PMF, LLC
  • Finely Limited, LLC
  • DCG Funds Underwriting, LLC
  • DCG ABF Management, LLC
  • DCG Funds Management, LLC
  • Davis Capital Group, Inc.
  • Davis Financial, Inc.
  • DCG Partners, LLC
  • DCG Real Estate Development, LLC
  • Huntersville Plaza Phase One, LLC
  • Huntersville Plaza Phase Two, LLC
  • North Lake Business Park, LLC
  • Richard Davis Enterprises, LLC

Order and Final Judgment

dcgreceivership Pleadings

On November 17, 2020, the Court in the DCG Receivership case entered its Order and Final Judgment on the motion filed by the SEC, bringing the Receivership case to a close.  The Judgment in the Receivership case has no impact on the restitution that Richard Davis was ordered to pay in the criminal case against him.

final-judgmentDownload

Motion Requesting Entry of a Final Judgment

dcgreceivership Pleadings

The SEC has filed a Motion requesting entry of a final judgment in the Receivership Case.  The SEC is not requesting a monetary judgment in the civil case beyond what has already been collected and distributed to claimants by the Receiver.   The restitution that was ordered in the criminal case against Richard Davis will not be impacted by entry of final judgment in the Receivership case. 

sec-motion-for-final-judgmentDownload

Notice of Deposit of De Minimis Distributions to Court Registry

dcgreceivership Pleadings

On June 2, 2020, in accordance with the Court’s Order Granting Receiver’s Motion for Order Authorizing Redistribution of Funds and Compensation for Associated Fees and Expenses, Doc. No. 290, checks were mailed to the holders of allowed claims relative to a redistribution of a total of $12,878.34.  Distribution checks should be cashed or deposited promptly.  Also in compliance with the Order, de minimis distributions of $5.00 or less on Claims 114, 122A, and 133 were turned over to the Court’s Registry.  Please email any questions to the Receiver at DCGReceiver@grierlaw.com.

DCG – Notice of Deposit to Court Registry 

Receiver’s Order Authorizing Redistribtuion

dcgreceivership Pleadings

On April 29, 2020, the Court entered the attached Order allowing the Receiver’s motion for authority to redistribute $12,878.34 to the holders of allowed claims.  The Order also sets procedures with respect to any potential future redistribution, de minimis distributions, and distributions that are not timely negotiated.  The Receiver anticipates mailing redistribution checks in early June, after the 30-day appeal period with respect to the Order has run.

Order Authorizing Redistribution

Receiver’s Motion for Order Allowing Redistribution of Funds

dcgreceivership Pleadings

On April 6, 2020, the Receiver filed a motion with the Court requesting authority to redistribute $12,878.34 to allowed claims.  A copy of the motion is attached here.  If no objections to the motion are filed by the April 20, 2020 deadline and the Court enters an Order granting the motion, distribution checks should be mailed to Investors in May, 2020.

DCG – Motion for Authority to Make Redistribution

DCG – Notice of Motion for Authority of Redistribtuion

Receiver’s Final Application for Attorney’ s Fees and Accountant’s Fees

dcgreceivership Pleadings

A.  Cotten Wright, Receiver, has filed a final application for compensation for the period of October 1, 2019 through December 3, 2019 to Grier Wright Martinez, PA. The application for  compensation seeks approval of $3,245.50 in fees and reimbursement of expenses of $0.00, for a total of $3,245.50.

The Receiver has also filed an application for compensation to Middleswarth, Bowers and Company, LLC, accountants for the Receiver.  That application seeks approval of $2,911.0 0in fees and reimbursement of $40.00 in expenses, for a total of $2,951.00.  Regardless of any fees and expenses that may be allowed by the Court, payment of any approved fees and expenses shall be limited to 30% of net recoveries.

If you do not want the Court to approve the applications noticed herein, or if you want the Court to consider your views, then within 14 days, you or your attorney must do the following: (1) file a written response explaining your position with the Court; (2) mail, fax or email a copy of your response to the Receiver; and (3) attend a hearing on your response, if the Court schedules a hearing.

If you or your attorney do not take these steps,  the Court may decide that you do not oppose the relief the Receiver requests and may enter orders approving the applications for compensation.

DCG – Bowers Final Fee Application 4846-4941-7902 v.1

DCG – GWM Final Application for Compensation 4822-9530-4622 v.2

DCG Notice of Fee Apps for GWM and Bowers 4812-6725-0082 v.1