LeFever Mattson

Representation of the creditors’ committee (co-plan proponent) in one of the largest California real estate Ponzi cases in history. LeFever Mattson and its more than 60 debtor affiliates filed in the Northern District of California. The company, a major real estate investment firm, controlled or had ownership interests in more than 50 limited partnerships and limited liability companies, and managed a real estate portfolio of more than 200 properties, comprised of commercial, residential, office, and mixed-use real estate, as well as vacant land, located throughout Northern California. The committee, represented by the firm, is made up of investors who were defrauded. Through the firm’s and plan proponents’ efforts, the company was found by the bankruptcy court to have been operated as a Ponzi scheme since at least September 2017 by Kenneth Mattson, who controlled the debtors and various affiliates as a single enterprise engaged in fraudulent activities and transactions. Over the course of the case, the creditors’ committee and its professionals worked diligently to uncover the scope and severity of the then-suspected fraudulent conduct and worked with interested parties to put forward a chapter 11 plan that would maximize value for creditors and victims of Mr. Mattson’s fraud. To that end, the committee, with the firm’s counsel and assistance, and the debtors conducted an extensive investigation into the fraudulent prepetition conduct and transactions, performed necessary property and asset stabilization, directed an intensive marketing and property sales process, negotiated and ultimately settled with dozens of interested parties including numerous secured lenders, led an intensive outreach campaign to inform and engage the company’s investors, and substantively consolidated the debtors’ 62 estates with those of additional non-debtor investment entities. The plan proponents’ substantial efforts culminated with the confirmation by the bankruptcy court of the fully consensual chapter 11 plan proposed by the committee and the debtors. Through the plan (all but one investor who voted on the plan accepted it), a plan recovery trustee will monetize the estates’ remaining assets and make substantial cash distributions to investors. While the confirmed plan cannot fully remedy all losses suffered by investors, the committee’s and debtors’ plan of action represented the best and fairest way to maximize recovery to all creditors, and importantly, the Ponzi scheme victims.