is a lawsuit by the Receiver to clear and obtain title to real property
and a house located on the shorefront of Lake Michigan. The property
was purchased in the name of the Wolcott Lifetime Trust, which was
established by David Gilliland for the benefit of his ex-wife and
his daughters. The $400,000.00 purchase price was paid from funds
invested by defrauded Hammersmith investors. In an effort to avoid
hot check charges against him in Alabama, arising from checks which
David Gilliland instructed him to write, Jack Higgins (the Trustee
of the Trust) gave a deed to the property to Jeffrey Saxon, a Hammersmith
investor. The Dallas lawsuit was dismissed after the Michigan lawsuit
November 3, 2000, the Receiver filed the Michigan lawsuit as a result
of new developments relating to the case, which prevented proper
jurisdiction in Dallas. In particular, after Saxon learned of the
Receiver's claim to the property, in an attempt to defraud the Receiver,
Saxon placed mortgages against the property. The facts relating
to this situation are set forth in the Complaint.
The answers and cross-claims by the Defendants can also be viewed
below. The Receiver sought and obtained a preliminary injunction
against Saxon. Saxon has refused to comply with the injunction.
As a result, the Receiver filed a Motion
to Show Cause to Hold Saxon in Contempt.
After a hearing held on February 22, 2001, the Court issued its
Order of Civil Contempt
ordering Saxon incarcerated if he did not produce certain documents
to the Receiver. As a result of the Order, Saxon has produced various
documents and is going to produce others.
On March 7, 2001, the Court in Dallas issued an Order
requiring the Receiver to file a litigation budget. On April 4,
2001, the Receiver filed his Litigation
Budget. On April 13, 2001 the Court issued its Order
regarding the budget.
On May 1, 2001 the Court issued a Case
Management Order. Trial of the case is set for April 23,
2002. The parties are in the process of conducting discovery at
January 15, 2002, the Receiver filed a Motion for Summary Judgment
as to the Wolcott Lifetime Trust and Melody Gilliland. On February
28, 2002, the Court issued an Opinion
pursuant to which the Court granted the Motion and held that neither
of them have any interest in the house.
lengthy settlement discussions, the Receiver reached a settlement
with the various lenders who claimed to have valid mortgages against
the property. On June 10, 2002 the Receiver filed a Motion
to Approve Compromise and Settlement Agreement and on July
24, 2002 the Court signed an Order
approving the settlement.