Two men enter, only one man leaves. Mad Max Beyond Thunderdome
The showdown between Madison Timber Receiver Alysson Mills and Baker Donelson is finally underway in U.S. District Court eight years after she sued the prestigious law firm to recover profits allegedly made in the Lamar Adams Ponzi scheme.
Baker Donelson then-partner Jon Seawright and its lobbyist, Brent Alexander, sold investments in Madison Timber for Lamar Adams. Both men pleaded guilty for their roles in promoting the Ponzi scheme. Seawright served a year in prison and was released in 2024. The Court sentenced Alexander to probation.
Mills tried to pin their activities on Baker Donelson. However, Baker Donelson fought back and fought back hard as it deposed numerous Madison Timber victims and investors.
Washington super law firm Williams & Connelly and Jackson law firm Watkins & Eager represent Baker Donelson. U.S. District Judge Carlton Reeves presides over the case.
Jury selection concluded yesterday. Opening statements were made this morning.
Note: Lamar Adams might be making a special cameo appearance as he is currently residing in the Madison County Detention Center.
December 20, 2018 Post
Jon Seawright is a lawyer at Baker Donelson while Brent Alexander is a lobbyist at the firm. Seawright and Alexander created a timber investment fund, Alexander Seawright Timber Fund I, in 2011 that would invest in Madison Timber. They began pitching the investments to Baker Donelson clients:
75. Throughout this time period Alexander and Seawright pitched their fund to potential investors, including Baker Donelson clients, as an exclusive “friends and family” fund. Alexander often used the phrase “simple, elegant and profitable” to describe the fund. He told investors that “we are in it”— a lie; neither Alexander nor Seawright invested their own money in the fund—“our neighbors, lots of physicians, many of the attorneys at Baker Donelson and other firms, a United States Senator etc.”
78. Alexander and Seawright specifically targeted individuals who had recently sold assets because they knew those individuals had money to invest. Such individuals included clients for whom Baker Donelson had recently closed transactions.
Ms. Mills claims victims “reasonably believed” their investments in Madison Timber and Alexander Seawright Timber Fund I, were “backed and promoted by, and had been vetted by, Baker Donelson.”
Remember when the Kingfish pointed out that Baker Donelson was promoting Alexander’s financial expertise on its website back on May 4?
Baker Donelson bragged about Alexander's investment expertise on its website:
A rapidly growing area of Mr. Alexander's practice is advising venture capital and related investors on public policy issues. He has passed the Series 65 Registered Investment Advisor Exam, an examination required by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD) and the North American Securities Administrators Association (NASAA) for individuals who serve as principals in, or advisors to, hedge funds that invest in stocks, bonds and other financial instruments. He has also passed the Series 3 National Commodity Futures Exam, an examination required by the Commodities Futures Trading Commission (CFTC), the National Futures Association (NFA) and the SEC for individuals who serve as principals in, or advisors to hedge funds which trade futures and options.
Well, the Receiver noticed as well:
81. Alexander and Seawright referred potential investors to Baker Donelson’s website, which shows that Jon Seawright is not merely a shareholder in Baker Donelson’s Jackson office but an elected member of the firm’s national governing Board of Directors. Baker Donelson is a law firm, not an investment advisory firm, but its website touts Jon Seawright’s advanced degree in taxation and “extensive experience” in business development and capital formation. Its website presents Brent Alexander as a “Senior Public Policy Advisor” who is qualified by regulators to serve as a principal in, or advisor to, hedge funds and who has a “rapidly growing” practice in “advising venture capital and related investors.”
82. Baker Donelson knew Alexander and Seawright relied on their affiliation with Baker Donelson in securing investments and allowed it.
83. Alexander and Seawright used Baker Donelson’s Jackson office’s address for official business. They and Adams held “closings” at Baker Donelson’s Jackson office. They used Baker Donelson’s runners to pick up investors’ checks.
84. Alexander and Seawright enlisted their colleagues at Baker Donelson, including in offices in other states, to introduce them to potential investors. They asked their colleagues to “[h]elp us get a meeting if you’re able,” adding “[i]f you can get us in the door, it would mean a great deal.” Their colleagues obliged.The next section in the complaint is appropriately called "easy money" (p.23). Ms. Mills charges the Baker Boyz did little work in exchange for the commissions. Each contract for sale of shares contained a promise that Seawright or Alexander would personally inspect the land that was the subject of the timber deed. No such inspections were performed. They couldn't inspect the properties because they didn't exist. However, they were more than happy to get paid:
89. Between 2011 and April 2018, Alexander and Seawright withdrew over $980,000 from the Alexander Seawright Timber Fund I, representing their “shares” of investors’ returns. In addition Adams separately paid them over $600,000 representing undisclosed “birddog fees.”
90. On information and belief, Adams also sometimes paid Alexander and Seawright bonuses, including Christmas bonuses in cash that he had delivered to Alexander and Seawright at their Baker Donelson office.
Alexander and Seawright thus acted as unlicensed brokers, a violation of state and federal law. Unfortunately for more victims, the Baker Boyz actually started thinking and not in a good way:
101. In 2015 Alexander and Seawright had an idea. They had been making monthly investments with Adams of between $100,000 and $500,000 using other people’s money. Alexander proposed that “[we] systemize this a little and take it to the next level.” Over the next two years Alexander and Seawright would brainstorm a new model that could make Alexander and Seawright rich. Alexander estimated that if a fund put $1 million in Madison Timber and then reinvested the principal and interest each month for ten years it would make $17 to $18 million. What if the fund put $10 million in?
102. The idea consumed Alexander. He texted Seawright, “Woke at [sic] at 2 thinking about the structure of the timber pool. We pull this off, we get rich.” Using Baker Donelson’s conference rooms and resources, he hosted meetings with and made presentations to accountants, investors, and advisors to push his idea and debate the merits of a five-year versus ten-year model. He reported the models gave people “much more level headed” than he “an orgasm as to its potential.” Fearing that “now that they have seen up our skirts” people will “try to cut us out,” he had prospective partners execute a non-disclosure agreement that Seawright drafted.
103. Alexander and Seawright gave their new model a new company and named it Alexander Seawright Timber Fund II, LLC.However, they had problems pitching the new venture as prospects. One investor pointed out that the Baker Boyz were not invested in the fund and thus had no "skin in the game." However, they found their pigeon in a Baker Donelson client who had just sold a major asset. The "key investor" placed $6 million in the fund. Unfortunately, the investor was burned:
112. Just days before Alexander and Seawright would have deployed their “key investor” and client’s money, Adams turned himself in. As news spread, the investor sought information from Alexander. Alexander told the investor that Alexander and Seawright were victims:Victims Indeed
Investor: How did you get hooked with him?
Alexander: My clients are hanging with me. They know I am a victim.
Investor: To think I was almost out of my entire life earnings makes me shiver
Alexander: Everyone knew him. Country club fixture.
Alexander: Would not let you lose your savings. Investor: Man it was close ...a day or two...
Alexander: To be clear, Jon and I were the victims of fraud.
Aiding and Abetting: All defendants
Gross Negligence: All defendants
Violation of Mississippi Fraudulent Transfer Act: Butler Snow Advisory, Thornton, Alexander Seawright, Alexander, Seawright
Mississippi RICO Act: Butler Snow Advisory, Thornton, Alexander Seawright, Alexander, Seawright
Joint Venture Liability: Alexander Seawright, Alexander, Seawright
Attorney Malpractice: Butler Snow
Negligent Retention & Supervision: Butler Snow, Baker Donelson
3 comments:
Honestly don’t see what Baker Donelson did wrong here. If they win at trial that would prove to be a big waste of receiver assets.
This write up describes Seawright and Alexander’s activities with their timber fund llc.
What about the law firm? Did they charge for these activities?
How much was BD paid?
BD should have to pay for their shenanigans. They knew exactly what they were doing.
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