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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

SEC Motion for Entry of Default Judgement Against Remaining Relief Defendants

On August 18, 2016, the SEC filed a motion for entry of default judgment against Relief Defendants:  Davis Capital Group, Inc.; North Lake Business Park, LLC; and Richard Davis Enterprises, LLC.

DE56 – SEC Motion for Entry of Default Judgment Against Remaining Defendants

DE57 – Brief in Support of SEC Motion for Entry of Default Judgment Against Remaining Defendants

Entry of Default Against Remaining Relief Defendants

On August 17, 2016, the SEC filed a motion for entry of default against Relief Defendants:  Davis Capital Group, Inc.; North Lake Business Park, LLC; and Richard Davis Enterprises, LLC.  The Clerk entered default as to the remaining relief defendants on August 17, 2016.

DE54 – SEC Motion for Entry of Default Against Remaining Defendants

DE55 – Entry of Default Against Remaining Defendants

Default Judgement and Entry of Permanent Receivership

On August 5, 2016, the Court entered default and made the Receivership permanent as to the following entities:

  • H20, LLC
  • DCG PMG, LLC
  • Finely Limited, LLC
  • DCG Real Assets, LLC
  • DCG Commercial Fund I, LLC
  • DCG PMF, LLC
  • DCG Funds Underwriting, LLC
  • DCG ABF Management, LLC
  • DCG Funds Management, LLC
  • Davis Financial, Inc.
  • DCG Partners, LLC
  • DCG Real Estate Development, LLC
  • Huntersville Plaza Phase One, LLC
  • Huntersville Plaza Phase Two, LLC

Default Judgment – Perm Rec’r 8-5-16