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ALERT: U.S. Federal Judge Sam Lindsay orders the creation of a Fair Fund for investors in UDF

Posted July 17, 2019

On July 16, 2019, the U.S. Federal District Judge Sam Lindsay ordered the creation of a Fair Fund to compensate investors in UDF who lost money because of UDF management’s illegal and unethical activities as charged by the Securities and Exchange Commission on July 3, 2018.  

ALERT: UDF “used Land Opportunity Fund as a pawn in the Ponzi scheme”

Posted July 16, 2019

"To do so, UDF used funds from UDF IV, V, and LOF to (1) either 'purchase' portions of non-performing loans from UDF III, which loans defaulted shortly after the purchase, or (2) to make 'loans' to entities that had already borrowed money from UDF III but had trouble paying it back, and have those entities in turn repay the earlier loans to UDF III."  

SEC Complaint

Posted July 9, 2018

The attached complaint was filed by the SEC and alleges from at least January 2011 through December 2015, UDF used money from a newer fund to pay distributions to investors in an older fund, without adequately disclosing the use of funds and the nature and status of loans made to developers.

SEC Charges Real Estate Investment Funds and Executives for Misleading Investors

Posted July 9, 2018

The Securities and Exchange Commission announced charges against two real estate investment funds and four executives in connection with their alleged roles in misleading investors by failing to disclose that it was using money from a newer fund to pay distributions to investors in the older fund.

Final Judgment as to Hollis M. Greenlaw, Benjamin L. Wissink, Theodore F. Etter, and Cara D. Obert

Posted July 9, 2018

Attached is the Final Judgment as to Defendants Hollis M. Greenlaw, Benjamin L. Wissink, Theodore F. Etter, Cara D. Obert, and David A. Hanson.

June 10, 2019 (Must Read): US Federal Judge Barbara Lynn Denies UDF Management’s Motion to Dismiss

Posted July 19, 2019

"Defendants also argue that LOF’s Offering Memorandum discloses that LOF 'expect[s] to make Investments with affiliates of [UMTH].' (ECF No. 32 at 20). Although the Offering Memorandum and the Partnership Agreement discuss that conflicts of interest may arise between LOF and its affiliates, neither document waives or exculpates Defendants from bad faith."

"Further, Plaintiff’s Complaint sufficiently pleads that the UDF Entity Defendants knowingly participated in the alleged breach. (See ECF No. 1 ¶¶ 39, 52) (alleging that Defendants caused LOF to enter into the loan participation agreement with UDF III while 'knowing that UDF III’s financial condition was precarious, that it could not pay distributions to its investors and that UDF III would not be able to fully repay any loan from LOF . . . .')"

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