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

dcgreceivership Pleadings

Claims Process Approved By Court; Claim Forms Due by September 16, 2017

On August 10, 2017, the U.S. District Court entered an Order approving the Receiver’s proposed process for establishing investors’ claims against the DCG Receivership Estate.  Investors should complete the attached Claim Verification Form, attach all required documentation (if any), sign and return it as instructed on the last page of the Claims Verification Form on or before September 16, 2017.  You do not need to file your claim with the Court.

The Receiver will review each Claim Verification Form and accompanying documentation and then file with the Court a recommendation as to the treatment of all claims, including a narrative explanation of any objections to submitted claims (the “Claims Report”).  Each investor will have the opportunity to object to all or any portion of the Claims Report.

Investors may direct questions to dcgreceiver@grierlaw.com or call the Receiver’s office at 704-375-3720.

Attachments:

  1. Notice of Claim Verification Form and Claims Bar Date
  2. Claim Verification Form

Notice of Claim Verification and Claims Bar Date

Claim Verification Form

dcgreceivership Pleadings

Receiver’s Motion for Approval of Proposed Claims Verification and Notice Procedures

The Receiver has filed a motion with the Court that sets out her proposed claims process, including a proposed notice and claim form.  Responses to the motion are due by August 8, 2017.  After the Court has entered an Order on the claims process, notice will be sent to all investors as to how and when to file a claim.  Questions regarding the proposed claims procedure may be sent to DCGReceiver@grierlaw.com.

DCG Motion on Claims Procedures & Distribution Method

dcgreceivership Pleadings

Receiver’s Fourth Application for Attorneys’ Fees and Second Application for Accountants’ Fees

A.  Cotten Wright, Receiver, has filed an application for compensation for the period of March 31, 2017 through June 30, 2017 to Grier Furr & Crisp, PA.  The application for  compensation seeks approval of $42,032.00 in fees and reimbursement of expenses of $302.75, for a total of $42,334.75.  The Receiver has also filed an application for compensation for the period of April 12, 2017 through July 11, 217 to Middleswarth, Bowers and Company, LLC, accountants for the Receiver.  That application seeks approval of $3,200.25 in fees and reimbursement of $9.10 in expenses, for a total of $3,209.35.  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 future 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 on or before August 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 orders approving the applications for compensation.

DCG GFC Fourth Application for Compensation

DCG Bowers Second Application for Compensation

DCG Notice of Application for Compensation for GFC and Bowers