A U.S. district court has ordered several companies led by a Dallas real estate executive to be placed in receivership.
A Dallas court has granted receivership to a business owned by developer Timothy Barton at the request of the Securities and Exchange Commission.
The SEC alleges that Mr. Barton, president of JMJ Development and CEO of investment firm Carnegie Development, defrauded more than 100 Chinese investors out of more than $26 million in real estate investments. Last year, the SEC sought to place the two companies, which own real estate in North Texas, into receivership, but the case was delayed due to an appeal.
On November 29, a district court granted the SEC's request to place the companies and real estate into receivership.
The SEC said Mr. Barton, with the help of his colleague Stephen T. Wall and Chinese businessman Haoqiang Hu, “misappropriated nearly all of the investors' funds and, among other things, He allegedly misused the funds to purchase real estate and pay undisclosed fees in the name of the organization.” and pays fees to Fu and pays expenses related to unrelated real estate development projects to fund his living. ”
Last year, the SEC charged Mr. Burton, Mr. Wall and Mr. Hu with securities law violations, and Mr. Hu was charged with multiple felonies. Mr Barton has appealed the action, denies wrongdoing and plans further appeals. “This is designed to financially squeeze me,” Burton said in an email. “Thankfully, my attorney will not try to get away with this injustice.”
The court ordered a receiver to take control of assets held by more than 50 of Barton's companies and business partners. The trustees were also charged with proceeding with the sale of three properties.
Justice Brantley Starr said: “While the court recognizes that receivership is an “exceptional remedy that should be employed with great care,'' Mr. Barton's circumstances are not exceptional. “We also recognize that there is,” he wrote in the new order.
One of the pending sales is a development site on the Dallas North Toll Road that Burton's JMJ Hospitality acquired in 2020 for a high-rise hotel and residential building.
