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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
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Receiver’s Fifth Application for Attorneys’ Fees and Third Application for Accountants’ Fees

A.  Cotten Wright, Receiver, has filed an application for compensation for the period of July 1, 2017 through September 30, 2017 to Grier Furr & Crisp, PA. The application for  compensation seeks approval of $17,511.50 in fees and reimbursement of expenses of $1,752.13, for a total of $19,263.63.  The Receiver has also filed an application for compensation for the period of July 19, 2017 through September 30, 2017 to Middleswarth, Bowers and Company, LLC, accountants for the Receiver.  That application seeks approval of $12,261.25 in fees and reimbursement of $1.50 in expenses, for a total of $12,262.75.  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 November 14, 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.

Attachments:

DCG GFC Fifth Application for Compensation

DCG Bowers Third Application for Compensation

DCG Notice of Application for Compensation to GFC and Bowers

Receiver’s Motion to Auction Mining Equipment

On October 31, 2017, the Receiver filed a motion seeking authority to auction certain mining and related equipment through auctions conducted by Ritchie Bros. Auctioneers (the “Equipment Auction Motion”).  A copy of the Equipment Auction Motion is linked below.

If you do not want the Court to approve the Equipment Auction Motion, or if you want the Court to consider your views of the Equipment Auction Motion, then on or before November 14, 2017, you or your attorney must file a written response with the United States District Court for the Western District of North Carolina, www.ncwd.uscourts,gov.

Attachments:

DE149 – Motion for Authority to Engage Auctioneer and to Auction Mining Equipment

DE149-1 – ExA – Motion for Authority to Engage Auctioneer and to Auction Mining Equipment

Motion to Approve Settlement

If you do not want the Court to approve the Settlement Motion, or if you want the Court to consider your views of the Settlement Motion, then on or before November 9, 2017, you or your attorney must file a written response with the United States District Court for the Western District of North Carolina, www.ncwd.uscourts,gov.

 

DE145 – Motion to Approve Settlement of Mining Equipment Lawsuit

DE145-1 – ExA – Motion to Approve Settlement of Mining Equipment Lawsuit