On January 29, 2021, Mark A. Kornfeld, Esq., as Receiver (the “Receiver”), filed his Motion seeking Court approval of the sale of the property located at 152 Tetuan Street, Old San Juan, Puerto Rico, 00901 (the “Property”) and also the ability and associated procedures for interested parties to submit a statutory overbid for the Property pursuant to 28 U.S.C. § 2001(b) (Doc. 174) (the “Motion”). The Court entered an Order granting the Motion on March 24, 2021 (Doc. 206).  On March 31, 2021, the Receiver published a notice of the proposed sale (the “Notice of Sale”) in El Nuevo Dia and the Sarasota Herald Tribune.  See Doc. 209.   The Notice of Sale indicated that any interested party had until April 10, 2021 to submit to the Receiver any bona fide offer to purchase the Property pursuant to 28 U.S.C. § 2001(b), which in relevant part required a minimum bid of at least $2.31 million (i.e., at least 10% higher than the proposed sale price of $2.1 million).

The Receiver received four (4) bona fide offers within ten days after the publication of the Notice of Sale.  See Doc. 222.  Pursuant to Paragraph 8 of the Order, the Receiver exercised his sole discretion and business judgment in evaluating the offers, and he ultimately determined to accept the highest offer of $4.15 million submitted by Propiedades Ceiba, LLC – nearly 100% higher than the highest offer received during the previous marketing period.  On May 11, 2021, the Receiver officially closed on the sale of the Property.  After payment of commissions and other statutory closing costs, the sale represents a net recovery of approximately $4.0 million for the Receivership Estate.

On November 5, 2020, the Court granted the Receiver’s motion to establish the framework for a claims process, including approval of a Proof of Claim Form, notice and publication requirements, and establishment of a claims bar date.

On November 17, 2020, the Receiver mailed each known investor, other known potential creditors, and certain other individuals a letter advising of this procedure, a Proof of Claim Form, and the Claims Process Instructions. A sample copy of this Initial Letter is available here.  If you did not receive a letter from the Receiver and you believe that you should have received one, please contact Jordan D. Maglich at (813) 222-2098 or Jordan.Maglich@bipc.com. Alternatively, a copy of the Proof of Claim Form can be found here and a copy of the Claims Process Instructions can be found here.

REMINDER OF FEBRUARY 15, 2021 CLAIM BAR DATE

THE CLAIMS BAR DATE IS FEBRUARY 15, 2021. ANY PERSON OR ENTITY WHO FAILS TO SUBMIT A COMPLETED AND SIGNED PROOF OF CLAIM THAT IS RECEIVED BY THE RECEIVER ON OR BEFORE THE CLAIMS BAR DATE (FEBRUARY 15, 2021) SHALL BE FOREVER BARRED AND PRECLUDED FROM ASSERTING A CLAIM AGAINST THE RECEIVERSHIP OR RECEIVERSHIP ENTITIES.

Welcome to the website of Receiver, Mark A. Kornfeld.  On March 6, 2020, Mr. Kornfeld was appointed as Receiver in a civil enforcement action, styled Securities and Exchange Commission v. Kinetic Investment Group, LLC et al., Case No. 8:20-cv-00394-WFL-SPF in the United States District Court for the Middle District of Florida, Tampa Division.

This website has been created to provide convenient access to information about the Receivership, including important updates and select District Court documents. As the Receiver’s work progresses, additional information will be added to this website, including information regarding a plan of distribution to creditors of any assets that are recovered and all forms required by the District Court for participation as a claimant in the distribution process. If you require further information not contained in this website, you may contact us.

On February 20, 2020, the Securities and Exchange Commission (SEC) filed a civil enforcement action in the United States District Court for the Middle District of Florida against defendants Kinetic Investment Group, LLC and Michael Scott Williams (collectively, defendants). In their Complaint, the SEC alleged that the defendants conducted a fraudulent and unregistered securities offering that raised approximately $39 million from several dozen investors located in Florida and Puerto Rico. As set forth further in the Complaint, the SEC also accused Williams of misappropriating at least $6.3 million through undisclosed loans to himself and entities he controlled.  In addition to the defendants, the Complaint also names six relief defendants that received proceeds of the alleged fraud without any legitimate entitlement to the funds: Kinetic Funds I, LLC; KCL Services, LLC d/b/a Lendacy, Scipio, LLC; LF42, LLC; El Morro Financial Group, LLC; and KIH, Inc. f/k/a Kinetic International, LLC.

The SEC sought various forms of relief against the defendants including an asset freeze and the appointment of a receiver to assist in marshalling assets on behalf of creditors, including injured investors. Defendants opposed this relief.

On March 6, 2020, the Court held a hearing on the SEC’s motions and that same day entered an Order appointing Mark Kornfeld as Receiver over Kinetic Investment Group and all Relief Defendants.  Mr. Kornfeld is an attorney with the Quarles & Brady LLP law firm and his bio is available here. In the Order Appointing Receiver, the Court directed the Receiver to (i) administer and manage the business affairs, funds, assets, and any other property of the defendants and relief defendants; (ii) marshal and safeguard the assets of the defendants and relief defendants; (iii) investigate the manner in which the affairs of the defendants and relief defendants were conducted and institute such legal proceedings for the benefit of the defendants and relief defendants and their investors and creditors as the Receiver deems necessary; and (iv) take whatever actions are necessary for the protection of the investors. The Receiver intends to fulfill his duties and responsibilities as efficiently and effectively as possible.  The District Court overseeing this Receivership has broad powers and wide discretion to determine the appropriate relief.

The Court subsequently approved the Receiver’s motions to retain various professionals to assist him in his duties, including the Quarles & Brady LLP law firm to serve as his counsel.  Jordan Maglich will be serving as Mr. Kornfeld’s lead counsel.