DALLAS, Aug. 13, 2021 (GLOBE NEWSWIRE) -- Strategic Claims Services, the court-appointed Distribution Agent for the United Development Funding Fair Fund ("UDF Fair Fund"), announces that the United States District Court for the Northern District of Texas has issued an Order to Show Cause pursuant to which interested parties can object to a distribution plan filed by the Securities and Exchange Commission (the “SEC”) for the distribution of the UDF Fair Fund.
Summary Notice of the Order to Show Cause regarding the SEC’s Plan of Distribution for the UDF Fair Fund
SEC v. United Development Funding III, LP. et al., 3:18-CV-01735-L (the “SEC Action”)
The SEC has proposed a distribution plan (the “Proposed Plan”) that sets forth the method and procedures for distributing the assets of the UDF Fair Fund to investors harmed by conduct alleged in the Complaint. On August 3, 2021, the Court issued an Order to Show Cause pursuant to which individuals and entities who held limited partnership interests in United Development Funding IV (“UDF IV”) and/or the common stock of UDF IV that was traded on the Nasdaq Global Select Market under the symbol UDFI during the period from January 1, 2011 through December 31, 2015, inclusive, or other interested parties, have until September 30, 2021 to object to the Proposed Plan. A downloadable version of the Order to Show Cause and the Proposed Plan are available at www.UDFFairFund.com. Objections must be submitted in accordance with the directions in the Order to Show Cause and must be received no later than 11:59 P.M. EST on September 30, 2021. Failure to timely submit an objection in accordance with the instructions in the Order to Show Cause will result in the objection being waived.
You can review and download the Order to Show Cause and the Proposed Plan at www.UDFFairFund.com. The objection and all documentation necessary to support the objection must be received, whether securely by email to info@UDFFairFund.com, or by mail to the Distribution Agent at the address set forth below, no later than 11:59 P.M. EST on September 30, 2021.
UDF Fair Fund - Objections
c/o Strategic Claims Services
600 N. Jackson St., Ste. 205
P.O. Box 230
Media, PA 19063
Failure to timely submit an objection in accordance with the instructions in the Order to Show Cause will result in the objection being waived.
By way of background, on July 3, 2018, the SEC filed the SEC Action against United Development Funding III (“UDF III”), UDF IV, Hollis Greenlaw, Benjamin Wissink, Theodore Etter, Cara Obert, and David Hanson. The SEC alleged that from at least January 2011 through December 2015, the UDF family of investment funds (“UDF”) used money from UDF IV to pay distributions to investors in in UDF III and to pay down UDF III loans, without adequately disclosing to investors, among other things, the use of funds. The SEC further alleged that UDF caused UDF III to pay its investors at least $67 million of distributions using funds from UDF IV. The SEC alleged that this use of UDF IV funds to pay down UDF III loans and to make distributions to UDF III investors was not adequately disclosed in reports filed by UDF III and UDF IV during that period. The SEC alleged that the Defendants, variously, violated of Sections 17(a)(2) and (3) of the Securities Act of 1933 and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-13, and 13a-14 thereunder. The SEC Action has since been resolved against all of the defendants, and the SEC has collected over $8.2 million comprising the UDF Fair Fund that it now seeks to distribute to investors determined to be eligible under the Proposed Plan. Accrued interest, and any amounts directed to the UDF Fair Fund by administrative or Court order, or otherwise, will be added to the UDF Fair Fund.
This is only a summary notice. For more information, please carefully read the Order to Show Cause, the Proposed Plan, and other documents found on the Fair Fund Website.
Questions? Visit www.UDFFairFund.com or email info@UDFFairFund.com
