Get breaking news alerts via email

Click here to manage your alerts
Judge approves $206M sale of apartments involved in Utah fraud case

Courts » Atlanta company will buy Management Solutions complexes; investors expected to get back around 50 percent of their funds.

By Tom Harvey

| The Salt Lake Tribune

First Published May 19 2014 02:29 pm • Last Updated May 20 2014 01:05 am

A federal judge in Salt Lake City on Monday approved the $206.7 million sale of 19 apartment complexes in various states as part of the winding down of operations of Management Solutions Inc., the Utah company at the center of fraud allegations.

An affiliate of Cortland Partners of Atlanta won the right to buy the properties and also hopes to buy an additional 10 complexes for a projected total sales price of $338.5 million for all 29.

Join the Discussion
Post a Comment

Cortland owns and operates about 15,000 multifamily apartment units in Florida, Georgia, Louisiana, North Carolina and Texas. The Management Solutions properties are in eight states.

The Securities and Exchange Commission sued the Fountain Green company and owners Wendell and Allen Jacobson in 2011, alleging they operated the company fraudulently as a Ponzi scheme and failed to fully inform or lied to investors about the use of their money.

U.S. District Judge Bruce Jenkins since has ruled that while Management Solutions was not overall a Ponzi scheme, individual transactions may have been. The Jacobsons pooled investor monies and used some of the funds to pay other investors.

Jenkins on Monday expressed some frustration at the length of time it has taken for a court-appointed receiver to bring the Management Solutions properties to market. He set Aug. 1 as a target date to approve the sale of the 10 additional properties to Cortland Partners.

Gil Miller, recently appointed as receiver to succeed attorney John Beckstead, who resigned to serve a mission for the LDS Church, said he was pleased with Jenkins’ decision on the sale and hoped to have a plan for distributing funds to investors ready for the judge’s approval by Oct. 15.

Greg Hoole, an attorney who represents investors, said he believed the sales will mean investors will get back around 50 percent of their funds. Investors had tried to gain approval of a plan where they would take over and manage the properties while waiting for the market to improve but Jenkins declined to sign off.


story continues below
story continues below

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment

About Reader Comments

Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.