Woods' Chattanooga assets valued at $55 million as receiver in alleged Ponzi scheme plans to sell

Staff file photo / A court-appointed receiver is dealing with liquidating assets tied to John J. Woods, including a portion of the Chattanooga Lookouts.
Staff file photo / A court-appointed receiver is dealing with liquidating assets tied to John J. Woods, including a portion of the Chattanooga Lookouts.

The receiver in the alleged Ponzi scheme of John J. Woods plans to deal with liquidating assets in the case, including more than $55 million in Chattanooga area entities, as soon as possible.

But the receiver said in court papers that how long it will take to sell the assets and distribute the money to the more than 400 investors allegedly bilked in the scheme is unknown at this point.

A. Cotten Wright, a North Carolina attorney appointed as receiver, also said in her first quarterly report to a federal judge overseeing the U.S. Securities and Exchange Commission action against Woods, that she's unaware at this point if there are any net winner investors.

In August, federal regulators charged Woods with "running a massive Ponzi scheme for over a decade" that defrauded the investors.

The complaint said the scheme, which goes by the name Horizon Private Equity, collected more than $110 million from investors with promises of 6-7% rates of return.

But the complaint said the investments "are worth far too little for there to be any realistic prospect that the Ponzi scheme will be able to pay back existing investors their principal, let alone the promised returns."

The SEC charged Woods, of Marietta, Georgia, and the Chattanooga-based Southport Capital investment firm with six counts of securities fraud.

According to a website in the case set up by the receiver, it's "very unlikely" that investors will get their entire principal investment back. But the receiver said she will do "everything possible to maximize what she is able to return to investors."

"The receiver will sort out what assets Horizon has that can be liquidated and secure the return of as much investor money as possible," the website said.

Woods' Atlanta attorney, David Chaiken, has said "the SEC's allegations present only one side of the story."

"We look forward to presenting Mr. Woods' side in court, through the judicial process," Chaiken said.

Woods, who grew up in East Ridge, heavily invested in Chattanooga entities ranging from the Chattanooga Lookouts minor league baseball team to real estate ventures involving strip centers and the former Sears and Penney's stores at Northgate Mall.

According to the receiver, Woods also held a 66% interest in Livingston Group Asset Management, doing business as the investment advisory firm Southport Capital, which he has valued at $34 million.

The receiver reported that Woods valued the remainder of his share of the assets, invested in 13 ventures in Chattanooga and Fort Oglethorpe, at $21.2 million.

Already, the receiver has asked U.S. District Court Judge Steven J. Grimberg to approve a Chattanooga Lookouts request to buy the share of the team owned by Woods for $1.87 million. Woods owned a 20.1% interest in the team, court papers showed.

The receiver said her review and consideration of potential claims against Woods' assets, which also include $14.9 million in cash, are ongoing. She anticipated proposing a claims allowance process, deadline and distribution procedures for court approval "at the appropriate time."

"Distributions will be made with court authority," Wright said.

The receiver has set up a dedicated phone line for calls from Horizon investors, which she said come in daily. Also, it has set up an email for the receivership to communicate with investors, Wright said.

In addition, the website has been set up at horizonreceivership.com.

The receiver said she's unable to predict when the case might be ready to close.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.

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