(Securities and Exchange Commission v. Gregory W. Gray, Jr., Archipel Capital, LLC, BIM Management LP, et. al. 15 Civ. 1465 (LAK)
(last updated March 14, 2018)
On March 25, 2015, Lucien A. Morin, II, Esq. of Rochester, New York, was appointed by the Honorable Lewis A. Kaplan, United States District Judge for the Southern District of New York, as the Receiver for Archipel Capital, LLC, BIM Management LP ( “Corporate Defendants”) and its affiliates Archipel Capital – Amyris Biotecnologies LP, Archipel Capital – Agrivida LLC, Archipel Capital – Bloom Energy LP, Archipel Capital – Late Stage Fund LP, Archipel Capital – Lineagen LP, Archipel Capital – Social Media Fund LP, Archipel Capital – Social Media Fund II LP, Archipel Capital – Social Media Fund LP 3, Archipel Capital – Social Media Fund LP 4 and Bennington-Everloop LP (“Relief Defendants”), all collectively referenced in this page as the “Receivership Defendants.”
The Receiver is not a government employee nor is he an official with the Securities and Exchange Commission. He is a private attorney, acting “on behalf of the court” for the purposes for which he was appointed.
The SEC's complaint alleges that Gregory W. Gray Jr. and his firms fraudulently used money from three investment funds to pay fictitious returns to investors in a different fund. No factual determination was made by the Court as Mr. Gray stipulated to entry of the March 23, 2009, Preliminary Injunction.
By the Court’s order, the Receiver was directed to take possession of certain assets of the Receivership Defendants into his custody, to investigate and locate other assets, to account, preserve and report to the Court as to his recommendations for action and disposition.
The Receiver, and the other professionals that he retains with the Court’s approval (such as attorneys, accountants, and investigators) will identify and gather the assets that belong to the entities in this Receivership and determine whether any other funds or assets exist. The availability of funds to pay investors will depend upon the results of the extent, and if appropriate, the liquidation of the defendants’ assets and other efforts by the Receiver in connection with the Receivership.
On January 9, 2017, the Court approved the Joint Plan proposed by the Receiver and the Securities and Exchange Commission.
On October 10, 2017, the Receiver filed for authority to make the initial interim distribution of $750,000.
On January 9, 2017the Court approved the Securities and Exchange Commission’s and Receiver’s Joint Plan of Distribution as modified (the “Joint Plan”). Pursuant to the Joint Plan, the Court required the Receiver to request authority before making any distribution.
Under the Joint Plan only investors identified as Non-Social Media Investors (“Non-SMF Investors”) were to receive the first distributions (“True Up Distribution”). On October 10, 2017, the Receiver filed his Proposed Distribution which sets out all of the allowed investor claims in this case as part of the application to make an initial distribution to investors. The Receiver proposes to distribute $750,000 (equal to a 15% dividend to Non-SMF Investors).
A copy of the Receiver’s October 10, 2017 letter to investors and the joint motion of the Receiver and Securities Exchange Commission for an order fixing claims and authorizing an initial cash distribution in the amount of $750,000 can be found in the Documents of Interest link.
The Court approved the Initial Distribution on February 12, 2018.
March 14, 2018 Update:
INITIAL DISTRIBUTION CHECKS MAILED
In accordance with the February 12, 2018 order of the Hon. Lewis A. Kaplan, dividend checks were mailed on March 13, 2018 to those qualified investors who hold allowed claims eligible for the Initial Distribution under the Joint Plan of Distribution. Please note that if this check is not cashed within 90 days, a stop payment will be issued on the check and these funds will be returned to the Distribution Fund. If you have questions in connection with the tax impact of this dividend payment, please review the matter with your counsel or investment advisor.