Receiver Lists Puerto Rico Condominiums For Sale

The Receiver has listed two residential condominium units for sale located in the Villa Gabriela building in Old San Juan, Puerto Rico. More details on the units are available here (Unit PH A-B) and here (Unit 2-E).

Any inquiries should be directed to the Receiver’s listing agent in Puerto Rico, Benjamin Rivera. Mr. Rivera can be contacted at (787) 632-5150 or ba-rivera@msn.com. In the event that the Receiver enters into a contract to sell one or both units, the Receiver will then seek Court approval.

Claims Process

UPDATE: Receiver Mails Out First Interim Distribution Checks

On October 29, 2021, the Court entered an Order granting the Receiver’s Motion to Approve First Interim Distribution and authorizing the Receiver to proceed with an initial distribution of 40% of each Investor Claimant with an Approved Claim. A copy of the Order is here. The Receiver subsequently mailed out distribution checks to Investor Claimants with approved claims on November 9, 2021.

The Receiver anticipates making one or more future distributions as warranted by the case status and ongoing asset recovery efforts.

For more information, see the Claims Process page here.

NOTICE OF COMPLETED SALE OF 152 TETUAN STREET, OLD SAN JUAN, PUERTO RICO 00901

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.

Introduction

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-WFJ-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.

Brief Case Summary

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 Buchanan Ingersoll & Rooney PC 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.

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