Staff file photo / A court-appointed receiver has been named in the alleged Ponzi scheme of John J. Woods, a minority investor in the Chattanooga Lookouts.

A U.S. District Court judge in Atlanta has appointed a receiver to oversee assets in the alleged Ponzi scheme of John J. Woods, including millions of dollars invested in Chattanooga.

Also, the U.S. Securities and Exchange Commission has proposed that Woods be limited to transfer $20,000 to a bank account with the right to seek added funds in 90 days for his expenses. The SEC said in a court document that it's highly likely there will be a substantial shortfall between the amount Woods raised from investors and the money available to be paid back to them.

Judge Steven J. Grimberg ordered that a Charlotte, North Carolina, attorney be named as receiver in Woods' case. A. Cotton Wright of the law firm Grier, Wright and Martinez was recommended by the SEC.

Wright will have the power to determine the value of Woods' assets, which include a stake in the Chattanooga Lookouts baseball team, and take control and manage them, according to court documents.

The judge said that "the appointment of a receiver in this action is necessary and appropriate for the purposes of marshaling and preserving all assets..."

Two weeks ago, federal regulators said Woods, who lives outside Atlanta but grew up in East Ridge, ran the Ponzi scheme for over a decade and that more than 400 investors have been defrauded.

In a 40-page complaint filed in federal court, the SEC charged Woods and Chattanooga-based investment advisory firm Southport Capital with six counts of securities fraud.

The complaint said Woods' Ponzi scheme went by the name Horizon Private Equity and collected more than $110 million from investors with promises of 6-7% rates of return.

But the complaint said 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."

Court documents show 28 real estate projects, companies or entities identified as assets in Horizon Private Equity, where Woods held investments. Half of them have a Chattanooga connection, according to court records.

In addition to a 20% share of the Lookouts, documents show investments in the former Sears and J.C. Penney stores at Northgate Mall, several Chattanooga area strip centers, a landfill and an investment services company, among others.

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

"There may be mismanagement, there may be disclosure issues, but this is not a 'run when the music stops and all the money's gone and it's just Lamborghinis and jets,'" Chaiken said. Woods' attorneys said there are considerable assets available to repay the 400 investors.

Also, an attorney for Livingston Group Asset Co./Southport Capital, said the SEC's filings came as a shock to Southport. But he said they're pleased with the court's earlier favorable decision to deny the SEC's request to place Southport into a receivership and freeze its assets.

"We remain deeply concerned about the allegations of concealment and wrongdoing at the hands of our former CEO and Horizon Private Equity, a company Southport has never engaged to provide asset management services for its valued advisory clients," the attorney said.

Contact Mike Pare at or 423-757-6318.