Investments tied to a Georgia man accused by regulators of a massive Ponzi scheme include an array of property in Chattanooga in addition to his share of the Lookouts baseball team, documents show.
John J. Woods, who grew up in East Ridge, has investments including the former Sears and J.C. Penney stores at Northgate Mall, several strip centers, a landfill and an investment services company, among others, according to federal court documents.
They are in addition to a 66% interest in the Livingston Group, which does business as Southport Capital, the investment advisory firm located in Chattanooga that Woods had headed until last week and which manages more than $824 million for clients.
Half of the 28 real estate projects, companies or entities identified as assets in Horizon Private Equity III LLC, where Woods held investments, have a Chattanooga connection, court records show.
Gerald B. Kline, a lawyer representing Livingston Group Asset Co./Southport Capital, said the Securities and Exchange Commission's court filings last week came as a shock to everyone at Southport. But he said they're pleased with the court's 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," Kline said. "In addition to taking swift and immediate action to implement executive leadership changes, we intend to vigorously defend Southport as it has only ever sought to operate with its clients' best interests at heart."
Meanwhile, several Chattanooga real estate investments with which Woods is connected include strip centers or projects either built or planned with local developer Clint Wolford.
Wolford said last week he had "no earthly idea" of what Horizon Private Equity did.
"To my knowledge, it's just John," he said about investments Woods made in the projects.
Those include a strip center nearing completion on Highway 153 on the site of a former Holcomb Garden Center. Also, another center was built in Fort Oglethorpe, Georgia, on a former Holcomb site there.
Records show that John J. Woods, recently accused by federal regulators in a massive Ponzi scheme, owns an array of investments in the Chattanooga area in addition to the Lookouts baseball team:
— Battlefield Parkway Partners LLC - 50% share in strip center.
— BI Development LLC - 70% in former J.C. Penney at Northgate.
— BI Development II LLC - 70% in former Sears at Northgate.
— BI Development III LLC - 70% in property near Logan’s Restaurant.
— BWHC LLC - 50% in property adjacent to a landfill.
— Chattanooga Professional Baseball LLC - 20.1% in Chattanooga Lookouts.
— East Brainerd Partners LLC - 50% in strip center with a Starbucks.
— EBES Partners LLC - 50% in former East Brainerd Elementary School project.
— Highway 153 Partners LLC - 50% in Starbucks center.
— Landfill Hamilton County - 30% interest in a landfill.
— Livingston Group d/b/a Southport Capital - 66% in Southport.
— ProNvest LLC - Interest in company.
— The Shops of Valley Brook LLC - 50% in development with a Jack’s restaurant.
— WW Partners LLC - 50% in site of former Ruby Tuesday’s in Hixson.
Source: U.S. District Court in Atlanta
Woods also has an interest in the former East Brainerd Elementary School property off East Brainerd Road where new residences are planned by Wolford.
Woods also is an investor in both the former Sears and J.C. Penney stores at Northgate with Chattanooga developer Bassam Issa.
Court documents said the Penney's store was being converted into a 300-unit multi-family housing complex. Issa, who also said he was surprised by the allegations against Woods, added that the housing proposal is preliminary.
Issa said there's no final decision on what will go at either former store.
"We're taking our time," he said, adding it's too early to know whether Woods' problems will slow down work at Northgate. "It's business as usual."
Also, documents said Woods has a 30% interest in a Hamilton County landfill. Last year, the construction and demolition landfill opened off Birchwood Pike.
In addition, documents said Woods had invested in ProNvest, which was launched in Chattanooga in 2000 to provide retirement and investment managed services for investors. ProNvest did not return a phone call or email seeking comment.
In the court documents, all the estimated values of the investments are redacted.
Last week, federal regulators said Woods, who lives outside Atlanta, 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 Southport 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."
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.
Some assets including Woods' 20% ownership of the Lookouts were placed in receivership by a judge after a hearing last week.
Contact Mike Pare at email@example.com or 423-757-6318.