UPDATE DECEMBER 5, 2022

 On December 5, 2022 the Receiver filed his Motion for Appointment of Appraisers, Approval of Appraisals of Rock Creek Property and Setting Hearing Regarding Approval of Sale.  In connection with his appointment, the Receiver took control of the assets of SF Rock Creek, LLC, which include a property located at 4107 Rock Creek Dr. in Dallas (the “Rock Creek Residence”).  The Receiver engaged a real estate broker, who actively marketed the Rock Creek Residence.  On November 16,2022, the Receiver entered into a contract to sell the Rock Creek Residence for $1,400,000.  Pursuant to 28 U.S.C. § 2001, the Receiver obtained three independent appraisals, which indicate that the fair market value of the property is $1,393,333.  The Receiver believes that the sales price of $1,400,000, which exceeds the appraised fair market value, is in the best interest of the receivership.  Defendant Timothy Barton has submitted an appraisal from the summer of 2022 that uses a cost approach to value the property at $2,061,228.  However, the Receiver believes that the sale of the Property at the sales price of $1,400,000 is nevertheless in the best interest of the Receivership because (1) Barton’s appraisal does not use the correct valuation methodology (it uses a cost approach rather than a market approach); (2) despite the Property being on the market for several weeks and receiving multiple offers, the negotiated sales price of $1,400,000 was the highest offer received, indicating that market conditions are consistent with the Receiver’s appraisers’ valuations of the Property; (3) even if Barton’s appraisal of $2,061,228 were accurate, and the Receiver was able to obtain two additional independent appraisals that applied a correct methodology and arrived at the same value, a sale for $1,400,000 would still be authorized under 28 U.S.C. § 2001 because the price exceeds the 2/3 minimum ($1,374,152); and (4) if the value of the Property is as high as Barton contends, pursuant to 28 U.S.C. § 2001, another bona-fide independent buyer can purchase the property by submitting a bona fide offer exceeding $1,540,000.  A copy of the Motion is available below, as well as the Appendix in support.  The Court has set a hearing to consider approval of the sale of the property for Monday, December 19, 2022, 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 $1,400,000 contract price, must be sent to the Receiver prior to the hearing date.  A copy of the motion is available below.  A copy of the Appendix is support is also available below. 

 On November 16, 2022, the Court also granted the Receiver’s Motion to Supplement Order Appointing Receiver to specifically identify additional Receivership Entities that are controlled “directly or indirectly” by Defendant Timothy Barton.  A copy of the Receiver’s Motion to Supplement is available below.  A copy of the Court’s Order granting the Motion to Supplement is available below.  As to certain entities that Defendant Barton’s son, Max Barton, claims are not controlled by Defendant Barton, the Court directed additional supplemental briefing, which the Receiver filed on November 30, 2022.  The Receiver’s Supplemental Brief is available below.  An appendix in support of the Supplemental Brief is available below.

 On November 16, 2022, the Court approved the Receiver’s motion for an order governing the administration of the receivership.  Among other things, the Court’s order gives Mr. Thomas the authority to store, sell, and otherwise dispose of various items located in the Receivership Entities’ office on Turtle Creek.  As part of his efforts to vacate this property, the Receiver anticipates having an online auction of various items belonging to the Receivership Entities.  Additional details regarding the online auction will be posted once they are finalized.  A copy of the motion is available below.  A copy of the Court’s order is located below. 

The Receiver filed his thirty-day status report with the District Court on November 17, 2022.  Among other things, the Receiver describes the work he and his team completed in the first thirty days of the Receivership, identifies assets discovered to date, and begins laying out a proposed plan for administering the Receivership going forward.  A copy of the Report may be viewed here.  If you have not already done so, please complete the Investor Information Form, available here.  The deadline for the Receiver to file his next report is January 30, 2023. 

On November 17, 2022, Defendant Timothy Barton also filed a Notice of Appeal of the Order Appointing Receiver.  Mr. Barton has not (at least as of yet) filed a motion to stay the receivership pending the appeal.