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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 Commercial Holdings, LLC
  • DCG Commercial, LLC
  • 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

Application to Employ Debbie Smith to Appraise House at 9137 Mt. Holly-Huntersville Road

On February 16, 2017, the Receiver filed an application with the Court seeking authority to employ Debbie T. Smith to appraise real property located at 9137 Mt. Holly-Huntersville Road, Huntersville, NC, titled to Receivership Defendant Davis Financial, Inc., and to pay the appraiser a $500.00 flat fee for such services as an administrative expense of the receivership estate.

If you do not want the Court to approve this application, or if you want the Court to consider your views, then on or before March 2, 2017, 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 an order approving the employment of Debbie T. Smith.

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Receiver’s Second Application for Attorney’s Fees

A. Cotten Wright, Receiver, has filed an application for compensation for the period of October 3, 2016 through December 31, 2016 to Grier Furr & Crisp, PA.  The application for compensation seeks approval of $31,467.00 in fees and reimbursement of expenses of $737.12, for a total of $32,204.12; provided, however, that regardless of any amount allowed by the Court, payment of any approved fees and expenses shall be limited to 30% of net future recoveries.

If you do not want the Court to approve the application noticed herein, or if you want the Court to consider your views, then on or before February 17, 2017, 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 an order approving the application for compensation.

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Motion to Abandon 2014 Dodge RAM 2500

On December 20, 2016, the Receiver filed a motion with the Court seeking authority to abandon, and not administer for the benefit of investors, a 2014 Dodge RAM 2500 titled to Receivership Defendants Richard Davis Enterprises, LLC.  While this truck may be worth as much as $50,000, Chrystler Capital holds a lien against the truck in the amount of $48,000.  After factoring in the costs of selling the truck, the Receiver believes the truck is of inconsequential value to the receivership estate.

If you do not want the Court to approve this motion, or if you want the Court to consider your views, then on or before January 4, 2017, 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 an order approving the motion to abandon the 2014 Dodge RAM 2500.

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Criminal Charges Against Rich Davis

The United States of America filed a Bill of Indictment against Richard Wyatt Davis, Jr. on December 13, 2016 in the United States District Court for the Western District of North Carolina (Charlotte), charging Mr. Davis with one count Wire Fraud, in violation of 18 USC 1343; two counts of Securities Fraud, in violation of 15 USC 78j(b) and 17 Code of Federal Regulations, Section 240.10b-s; and three counts of Tax Evasion, in violation of 26 USC 7201.  A copy of the Bill of Indictment is attached.  Mr. Davis was arrested on December 14, 2016, had his initial appearance in front of a Magistrate Judge on December 15, 2016, remains in custody, and is scheduled for a detention hearing on December 20, 2016.

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Receiver’s First Application for Attorney’s Fees

A. Cotten Wright, Receiver, has filed an application for compensation for the period of June 8, 2016 through September 30, 2016 to Grier, Furr & Crisp, P.A.  The application for compensation seeks fees of $75,371.00 and reimbursement of expenses of $2,647.46, for a total of $78,018.46; provided, however, that regardless of any amount allowed by the Court, at no time shall more than 30% of the net balance of liquidated receivership assets be disbursed to Grier Furr & Crisp, PA for the Receiver’s fees and expenses.

If you do not want the Court to approve this application, or if you want the Court to consider your views, then on or before November 17, 2016, 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 an order approving the application for compensation.

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