SEC v. Palm House Hotel, LLLP, et al., 18-cv-81038-DMM (S.D. FI.)
Welcome to the Palm House Hotel Distribution Fund Website
If you purchased one or more limited partnership interest(s) in the Palm House Hotel, LLLP (“PHH”) while participating in the Immigrant Investor Program ("EB-5 Program"), and suffered a loss as a result of the conduct described in the Complaint in the federal district court matter referenced above, you may be eligible for a distribution from the Palm House Hotel Distribution Fund (the "Distribution Fund"). You do not need to submit a claim form; eligible investors will be identified, and distribution payments calculated, based on the records obtained by the Securities and Exchange Commission (“SEC”) staff during the investigation of this matter and otherwise.
The information contained on this website is a summary of the information presented in more detail in, among other things, the Complaint, the Plan Notice, and the Distribution Plan approved by the Court, all of which you can review through the “Important Documents” tab on this website.
You should visit this website often to get the most up-to-date information on the Distribution Fund.
The Civil Action
On August 18, 2018, the Securities and Exchange Commission (the “SEC”) filed a complaint (the “Complaint”) against Palm House Hotel, LLLP (“PHH”), South Atlantic Regional Center, LLC (“SARC”), Joseph J. Walsh, Sr. (“Walsh”), Robert V. Matthews (“Matthews”) (collectively, the “Defendants”), and named 160 Royal Palm, LLC (“Royal Palm”) and United States Regional Economic Development Authority LLC d/b/a EB5 Petition (“USREDA”) as relief defendants. The SEC alleged that, from November 2012 to March 2015, the Defendants defrauded 88 foreign investors participating in an Immigrant Investor Program (the “EB-5 Program”) out of approximately $44 million dollars by misrepresenting that PHH would loan investor funds to Palm House LLC to acquire, develop, and operate the Palm House Hotel located in Palm Beach, Florida. The SEC alleged that, instead, Walsh and Matthews misappropriated a significant portion of the investor funds.
On November 20, 2019, the Court entered final judgment against Royal Palm, ordering Royal Palm to pay disgorgement and prejudgment interest of $27,671,214.35. By final judgments entered on March 11, 2020, the Court ordered SARC, Walsh and USREDA to pay a total of $65,172,165 in disgorgement and prejudgment interest, and ordered Walsh to pay a civil penalty of $8,078,000.
The Palm House Hotel Distribution Fund and the Distribution Agent
Royal Palm is currently subject to Chapter 11 bankruptcy proceedings in the Southern District of Florida and the SEC has collected over $6.66 million of its judgment against Royal Palm through those bankruptcy proceedings. The Palm House Hotel Distribution Fund is comprised of these collections. Accrued interest and any additional collections will be added to the Palm House Hotel Distribution Fund.
The Palm House Hotel Distribution Fund is deposited in an interest-bearing account at the U.S. Treasury’s Bureau of Fiscal Service.
By Order dated June 18, 2020, this Court appointed Miller Kaplan Arase LLP as Tax Administrator (the “Tax Administrator”), JND Legal Administration as Distribution Agent (the “Distribution Agent”), and authorized the SEC to pay all tax obligations and administrative fees and expenses without further Court Order (the “Appointment Order”). You can review and download a copy of this Order through the “Important Documents” tab on this website.
The Distribution Plan
On November 13, 2020, the United States District Court for the Southern District of Florida approved a plan for the distribution of the Palm House Hotel Distribution Fund (the “Plan”). The Plan governs the administration and distribution of the Palm House Hotel Distribution Fund and sets forth the method and procedures for distributing the assets of the Palm House Hotel Distribution Fund to investors harmed by the conduct alleged in the Complaint.
How do I obtain more information?
Additional information can be found by visiting the “Important Documents” tab or the “Frequently Asked Questions” tab visible at the top of this webpage. You can obtain information additional to that available through this website by contacting the Distribution Agent toll-free at 1-888-383-0356; by emailing info@PalmHouseHotelFund.com; or by mailing a letter to:
Palm House Hotel Distribution Fund
c/o JND Legal Administration
PO Box 91380
Seattle, WA 98111