***UPDATE MARCH 2, 2023***

 On March 2, 2023, the Court set a hearing to consider approval of the sale of Bellwether Ridge, the Parc at Windmill Farms, and the Amerigold Suites (discussed separately below) for Monday, March 20, 2023 at 2 pm, at the United States District Courthouse, Courtroom 1525, 1100 Commerce St., Dallas, TX 75242-1310.  The Receiver will also post notice of the sale by publication.  Pursuant to 28 USC § 2001, any bona fide offers that guarantee at least 10% over the $27,000,000, $51,000,000, and $5,500,000 contract prices, respectively, must be sent to the Receiver prior to the hearing date.  A copy of the motions are available as part of the February 22 and March 2 postings below.   

On March 2, 2023, the Receiver filed his Motion for Appointment of Appraisers, Approval of Appraisals and a Hearing Regarding Approval of Sale of Amerigold Suites.  In connection with his appointment, the Receiver took control of the assets of Goldmark Hospitality, LLC, which owns a 70 unit extended-stay hotel in Dallas, Texas (the “Amerigold Suites”).  On March 1, 2023, the Receiver entered into a contract to sell the Amerigold Suites for $5,500,000.  Pursuant to 28 U.S.C. § 2001, the Receiver obtained one appraisal and two brokers’ opinions of value, which indicate that the fair market value of the property is approximately $4,366,667.  The Receiver believes that the sales price of $5,500,000, which exceeds the BOVs and appraisal received on the property, is in the best interest of the Receivership.  After accounting for various loans and liens on this property, the Receiver estimates the sale resulting in a net benefit of approximately $2.7 million to the Receivership Estate.  A copy of the Motion is available here, as well as the Appendix in support.  As discussed above, the hearing on the Motion has been set for March 20.  

 On February 22, 2023, the Receiver filed his Motion for Appointment of Appraisers, Approval of Appraisals and a Hearing Regarding Approval of Sale of the Parc at Windmill Farms.  In connection with his appointment, the Receiver took control of the assets of D4FR, LLC, which includes a 272-unit apartment complex located at 1003 Windmill Farms Boulevard, Forney, Texas (the “Parc at Windmill Farms”).  On February 21, 2023, the Receiver entered into a contract to sell the Parc at Windmill Farms for $51,000,000.  Pursuant to 28 U.S.C. § 2001, the Receiver obtained one appraisal and two brokers’ opinions of value, which indicate that the fair market value of the property is approximately $53,166,666.  The Receiver believes that the sales price of $51,000,000, which exceeds the $50,000,000 professional appraisal received on the property is in the best interest of the receivership, particularly given certain ownership claims asserted by Southern Properties, which claims are detailed in the motion.  After accounting for the two loans on this property, the Receiver estimates the sale resulting in a net benefit of approximately $7.5 million to the Receivership Estate.  A copy of the Motion is available here, as well as the Appendix in support.  The Court has not yet set a hearing on the Motion, nor has Barton submitted a response indicating whether or not he is opposed to the sale.  The Receiver will publish a follow-up posting when a hearing on the motion to approve the sale is set.

On February 22, 2023, the Receiver similarly filed a Motion for Appointment of Appraisers, Approval of Appraisals and a Hearing Regarding Approval of Sale of the Bellwether Ridge.  In connection with his appointment, the Receiver took control of the assets of D4DS, LLC, which includes a 150-unit apartment complex located at 841 S. Polk Street, DeSoto, Texas (“Bellwether Ridge”).  On February 21, 2023, the Receiver entered into a contract to sell Bellwether Ridge for $27,000,000.  Pursuant to 28 U.S.C. § 2001, the Receiver obtained one appraisal and two brokers’ opinions of value, which indicate that the fair market value of the property is approximately $29,033,333.  The Receiver believes that the sales price of $27,000,000 is in the best interest of the receivership, particularly given certain ownership claims asserted by Southern Properties, which claims are detailed in the motion.  After accounting for the two loans on this property, the Receiver estimates the sale resulting in a net benefit of approximately $5.1 million to the Receivership Estate.  A copy of the Motion is available here, as well as the Appendix in support.  The Court has not yet set a hearing on the Motion, nor has Barton submitted a response indicating whether or not he is opposed to the sale.  The Receiver will publish a follow-up posting when a hearing on the motion to approve the sale is set.

On February 14, the Receiver filed his First Quarterly Fee Application. A copy of the Fee Application and Appendix in support can be accessed here and here.

 On January 30, 2023, the Receiver filed his status report for the Fourth Quarter of 2022.  A copy of the Report may be viewed here.  The deadline for the Receiver to file his next report is April 30, 2023.

On January 19, 2023, the Receiver filed a Motion to Compel Documents and Information, Request for Sanctions, or Alternatively, Motion for Show Cause Hearing, and Brief in Support.  The Motion relates to Barton’s continued failure to provide certain information required by the Receivership Order.  A copy of the Motion and the Appendix in support are available here and here.  Also, on January 17, 2023, the District Court denied Barton Motion to Stay the Receivership pending his appeal to the Fifth Circuit.  A copy of the Court’s Order is also available here.  The Receiver will be filing his Quarterly Report for the Fourth Quarter of 2022 on or before January 30, 2023.

On January 17, 2023, the Court set a hearing to consider approval of the sale of the Frisco Gate Property (discussed below) for Tuesday, January 31, 2023 at 2 pm, at the United States District Courthouse, Courtroom 1525, 1100 Commerce St., Dallas, TX 75242-1310.  The Receiver will also post notice of the sale by publication.  Pursuant to 28 USC § 2001, any bona fide offers that guarantee at least 10% over the $9,000,000 contract price, must be sent to the Receiver prior to the hearing date.  A copy of the motion is available as part of the January 7 posting below.

On December 28, 2022, Defendant Timothy Barton filed a Motion for Stay Pending Appeal with the Fifth Circuit Court of Appeals, asking the appellate court to stay the entire receivership pending his appeal of the District Court’s Receivership Order.  Alternatively, Barton requested that the Fifth Circuit stay certain of the District Court’s orders pending Barton’s appeal.  The Receiver filed a Response in opposition to Barton’s Motion to Stay on January 5, 2023.  The Securities and Exchange Commission also filed a response opposed to the motion the same day.  Click these links Receiver’s Response, which was ultimately filed as an Amicus Brief, as well as the Receiver’s Appendix in Support.  On January 6, 2023, the Fifth Circuit Court of Appeals denied Defendant Barton’s motion to stay the Receivership.  A copy of the Court’s order is also available here. 

On December 22, 2022, the Court granted the Receiver’s Verified Motion to Ratify Agreement with DLP Capital and Other DLP Entities.  As detailed more fully in the Receiver’s Motion (a copy of which is available here, along with the Court’s Order ratifying the agreement), the Receivership Entities sold certain properties designated for multifamily development to DLP Capital and its affiliates in late 2021.  As part of this sale, the Receivership Entities agreed to assist with the development and construction of the projects, and DLP Capital granted certain Receivership Entities a participation interest in the projects.  Upon his appointment, the Receiver discovered that the Receivership Entities were already in breach of their obligations under the Construction and Development Agreements.  As part of a settlement with the Receiver, DLP Capital agreed to release their claims related to the past and ongoing obligations under these agreements and to pay the Receiver $750,000 for the Receivership Entities’ participation interest in the properties.

On December 22, 2022, the Receiver filed his Motion for Appointment of Appraisers, Approval of Appraisals and a Hearing Regarding Approval of Sale of Frisco Gate Property.  In connection with his appointment, the Receiver took control of the assets of FHC Acquisition, LLC, which includes a piece of real property consisting of approximately 4.538 acres of undeveloped land in Frisco, Texas. (the “Frisco Gate Property”).  On December 13, 2022, the Receiver entered into a contract to sell the Frisco Gate Property for $9,000,000.  Pursuant to 28 U.S.C. § 2001, the Receiver obtained one appraisal and two brokers’ opinions of value, which indicate that the fair market value of the property is approximately $9,302,823.  The Receiver believes that the sales price of $9,000,000, which is close to the average appraised value and does not include the payment of any brokers’ commissions, is in the best interest of the receivership.  After payment of secured creditors on this property, the Receiver estimates net proceeds of approximately $2 million to the Receivership Estate.  A copy of the Motion is available here, as well as the Appendix in support.  The Court has not yet set a hearing on the Motion, nor has Barton submitted a response indicating whether or not he is opposed to the sale.  The Receiver will publish a follow-up posting when a hearing on the motion to approve the sale is set.

 On December 19, 2022, the Court held its hearing on the Receiver’s Motion to Approve the Sale of the Rock Creek Property.  At the conclusion of the hearing, the Court announced that it would approve the sale, which was set to close on December 28, 2022.  A copy of the Court’s order, which was ultimately entered on December 20, is available here.  As will be detailed in future postings, because of Barton’s subsequent interference, the closing of the sale has been postponed.