On August 18, 2018, the Securities and Exchange Commission (the “SEC”) filed a civil action 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 case is captioned: SEC v. Palm House Hotel, LLLP, et al., 18-cv-81038-DMM (S.D. FI.).  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 SEC has collected over $6.6 million of the $27 million judgment against Royal Palm through a distribution from Royal Palm’s Chapter 11 bankruptcy proceedings in the Southern District of Florida (the “Palm House Hotel Distribution Fund”).  Additional collections; amounts directed to this Court for inclusion in the Palm House Hotel Distribution Fund by court order, agreement, or otherwise; and accrued interest and earnings will be added to the Palm House Hotel Distribution Fund. The Palm House Hotel Distribution Fund, less taxes, investment fees, and fees and expenses of tax and fund administration (the “Net Available Distribution Fund”) will be available to distribute to Eligible Investors.

By Order dated June 18, 2020, this Court appointed Miller Kaplan Arase, LLP as the tax administrator to execute all income tax reporting requirements, including the preparation and filing of tax returns for the Distribution Fund.

By the same Order, the Court appointed JND Legal Administration as Distribution Agent for the Distribution Fund, to oversee the administration and distribution of the Distribution Fund in coordination with the SEC’s counsel of record pursuant to the terms of a distribution plan approved by the Court.

You can review and download the June 18, 2020 Order from the "Important Documents" tab of this website or request a copy from the Distribution Agent.

On November 13, 2020, this Court approved a plan for the distribution of the Distribution Fund (the "Plan"). You can review and download a copy of the Plan from the “Important Documents” tab of this website or request a copy from the Distribution Agent.

The Security is defined in the Plan as “limited partnership interests in Palm House Hotel LLLP”.

There will be no claims process.  Investors do not need to submit anything to be considered for eligibility.  Rather, the Distribution Agent, working with the SEC, will identify eligible investors and determine distribution payments based on information obtained by the SEC staff during its investigation and otherwise.

“Eligible Investor” means any individual or entity, or their lawful successors, who is not an “Excluded Party” under the Plan, who purchased the Security, and who is determined by the Distribution Agent to be eligible under the Plan for a Distribution Payment.

The Defendants, the Relief Defendants, and any of their assigns, heirs, spouses, parents, dependents, or controlled entities; (ii) a Potentially Eligible Investor whose Recovery equals or is greater than their Investment; (iii) a Potentially Eligible Investor who, despite reasonable efforts by the Distribution Agent, cannot be located or is unresponsive; (iv) a Potentially Eligible Investor whose Distribution Payment is less than the Minimum Distribution Amount; and (v) the Distribution Agent, its employees, and those persons assisting the Distribution Agent in its role as Distribution Agent.

Because the Net Available Distribution Fund will likely not be sufficient to fully compensate all Eligible Investors for their respective Net Losses, the Net Available Distribution Fund will be divided among Eligible Investors pursuant to the methodology set forth in the Plan.

Additional information can be found by visiting the “Important Documents” tab visible at the top of this webpage and by contacting the Distribution Agent toll-free at 1-888-383-0356; emailing info@PalmHouseHotelFund.com;  or by mailing a letter to:

Palm House Hotel Distribution Fund
c/o JND Legal Administration
P.O. Box 91380
Seattle, WA 98111

All Potentially Eligible Investors will be sent a separate email, with instructions on how to upload and/or securely send the requested information, contemporaneously with the Plan Notice.