Federal judge orders special master to monitor and investigate financial assets and operations of the Elliotts
MIAMI.-U.S. District Court Judge Alan S. Gold on Friday ordered Special Master Thomas Scott to monitor the business and investigate financial operations, transactions and assets of the Elliott Group, a Dominican Republic real estate development organization led by Canadian expatriates Frederick and Derek Elliott. 

 

The judge’s order provides for court supervision of the Sun Village Cofresi and Juan Dolio resort properties to protect the interests of hundreds of U.S., Canadian and international investors, stopping one step short of placing the Elliotts’ properties into receivership.

As special master, Scott also serves as the Miami court’s liaison with the courts in the Turks and Caicos and Dominican Republic. Investors have already won several legal victories, including temporary restraining orders freezing the Elliotts’ assets in the Dominican Republic.

Under the U.S. court order, Scott will “review, examine and monitor” the Elliotts’ business affairs, take steps to identify all their assets, and approve any significant financial transactions. He was also empowered to “take whatever actions are necessary for the negotiation with creditors concerning the preservation or refinance of such assets.”

One of the pressing issues for investors involves potential foreclosures on the two Dominican Republic properties, as well as Miches, a third resort property purchased personally by the Elliotts using investors’ funds without their authorization. At Juan Dolio the Elliotts have failed to make principal payments on two bank loans for the past year. After renegotiating interest-only payments, the Elliotts failed to make either of their quarterly payments in 2009.

Judge Gold also instructed Frederick Elliott to provide “strict, timely and detailed reporting” to the special master regarding the status of all properties and assets. In recent months he has asked the Elliotts repeatedly for a business plan for completing the Juan Dolio and Cofresi projects on behalf of the investors. Despite the judge’s orders, the Elliotts have not submitted a viable business plan.

The Elliotts have been named in a series of lawsuits filed by U.S. and international law firms, including Miami firm Diaz Reus & Targ, LLP. The plaintiffs’ suits seek to preserve as many Elliott-related assets as possible, including personal property, bank accounts, and real estate for the protection of investors. 

Further legal actions against the Elliotts and their accomplices may be filed in other jurisdictions where the Elliott companies and assets located.

Go back | Date: 28 Jul 2009
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