Saturday, July 19, 2014

Court document: Wallace-Bajjali not likely to meet deadline to repay cheated investors

Problems continue to multiply for the city of Joplin's master developer, Wallace-Bajjali Development Partners.

As part of a settlement reached with the Securities and Exchange Commission, the firm has until December 31 to repay $450,000 to investors who were bilked by what a recent lawsuit refers to as a "Ponzi scheme."

The settlement involved $60,000 fines for both David Wallace and Costa Bajjali and the repayment of the $450,000, which was initially due on December 31, 2012, with an incentive to cut the amount to $300,000 if it were paid ahead of time.

That didn't happen. Documents filed in U. S. District Court for the Northern District of Texas indicate that not one penny has been paid and in a status report filed Wednesday by the court-appointed receiver who is handling the case, Thomas Taylor, it does not sound like he is expecting Wallace-Bajjali to meet the latest deadline either.

Wallace-Bajjali's Joplin work is not mentioned in the project, but an earlier update from David Wallace said there would be no money coming from Joplin to pay the obligation because  the initial proceeds have to put back into Joplin.

Taylor's report indicates Wallace-Bajjali is not having any better luck with its other high profile project in Amarillo, Texas.

In regard to the Cash Flow Note, the Receiver has received from the Wallace Bajjali parties the financial information regarding the Amarillo development project as required under the terms of the settlement. No “Dedicated Cash Flow” has been received by Wallace Bajjali Development Partners, L.P. (“WB Dev. Partners”) from the Amarillo development project to date, and therefore no payments have been made on the Cash Flow Note. WB Dev. Partners is obligated to pay a portion of the “Dedicated Cash Flow” 
it receives from the Amarillo development project to the Receivership Estate until the Cash Flow Note is paid in full. 

Also complicating things is a lawsuit filed against Wallace-Bajjali last month.

The plaintiffs’ Original Petition was filed on June 25, 2014. The plaintiffs to the Ellisor Suit have alleged causes of action against various Wallace Bajjali related parties which include, without limitation, negligence, negligent misrepresentation, breach of fiduciary duty, knowing participation in breach of fiduciary duty, common law fraud, violations of the Texas Securities Act and civil conspiracy. 

The Receiver cannot predict what effect, if any, the Ellisor Suit will have upon the Wallace Bajjali parties’ ability to satisfy their obligations under the settlement agreement with the Receivership Estate. However, the Ellisor Suit could potentially affect the realization of the payments due to the Receivership Estate under the settlement agreement. 


Anonymous said...

Wallace, Bajjalli, Rohr, Huff. Who else is in this tangled up mess in Joplin? Woolston.

Who decided these were the people we wanted to rebuild our town? I say, pay them what it takes to get rid of them.

Anonymous said...