20-00011-npo dkt 24 filed 03/16/20 entered 03/16/20 12:33 ... · 16/03/2020 · 20-00011-npo dkt...

IN THE UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF MISSISSIPPI

JACKSON DIVISION

IN RE:

JON DARRELL SEAWRIGHT,

Debtor.

CASE NO. 19-03921

Chapter 7

ALYSSON MILLS, IN HER CAPACITY AS RECEIVER FOR ARTHUR LAMAR ADAMS AND MADISON TIMBER, LLC,

Plaintiff,

v.


Defendant.

ADV. NO. 20-00011-NPO

MOTION TO WITHDRAW THE BANKRUPTCY REFERENCE

**RELIEF IS SOUGHT FROM A UNITED STATES DISTRICT JUDGE**

Alysson Mills, in her capacity as the court-appointed receiver for the estates of Arthur

Lamar Adams and Madison Timber Properties, LLC (the “Receiver”), moves for an order of the

United States District Court for the Southern District of Mississippi, withdrawing the reference of

this adversary proceeding to the United States Bankruptcy Court for the Southern District of

Mississippi, for cause shown, in accordance with 28 U.S.C. § 157, Federal Rule of Bankruptcy

Procedure 5011(a), and Rule 5011-1 of the Local Rules for the United States Bankruptcy Court

for the Southern District of Mississippi. The Debtor-Defendant, Jon Seawright, does not oppose

her motion.

The Receiver submits the accompanying memorandum in support.

20-00011-NPO Dkt 24 Filed 03/16/20 Entered 03/16/20 12:33:33 of 3

Page 3 of 55

Case 3:20-cv-00232-CWR-FKB Document 1 Filed 03/31/20 Page 1 of 3

Further, the Receiver designates pursuant to Local Bankruptcy Rule 5011-1(3) the

following pleadings as relevant to the disposition of this motion:

1. Jon Seawright’s Voluntary Petition for Bankruptcy, Doc. 1, In re: Jon Darrell Seawright, No. 19-03921 (Bankr. S.D. Miss.); and

2. Receiver’s Adversary Complaint, Doc. 1, Alysson Mills v. Jon Darrell Seawright, Adv. No. 20-00011 (Bankr. S.D. Miss.).

WHEREFORE, the Receiver respectfully requests that an order issue withdrawing the

reference of this adversary proceeding pursuant to 28 U.S.C. § 157(d).

March 16, 2020

Respectfully submitted,

/s/ Lilli Evans Bass

BROWN BASS & JETER, PLLC Lilli Evans Bass, Miss. Bar No. 102896 LaToya T. Jeter, Miss. Bar No. 102213 1755 Lelia Drive, Suite 400 Jackson, Mississippi 39216 Tel: 601-487-8448 Fax: 601-510-9934 [email protected] Receiver’s counsel

/s/ Kristen D. Amond

FISHMAN HAYGOOD, LLP Admitted pro hac vice Brent B. Barriere, Primary CounselKristen D. Amond Rebekka C. Veith 201 St. Charles Avenue, Suite 4600 New Orleans, Louisiana 70170 Tel: 504-586-5253 Fax: 504-586-5250 [email protected] [email protected] [email protected] Receiver’s counsel


Page 4 of 55


CERTIFICATE OF SERVICE

I certify that I electronically filed the foregoing with the Clerk of Court using the ECF

system which sent notification of filing to all counsel of record.

Date: March 16, 2020 /s/ Kristen D. Amond


Page 5 of 55


March 31, 2020 Arthur Johnston, Clerk United States District Court Southern District of Mississippi 501 East Court St., Ste. 2.300 Jackson, MS 39201 Re: Motion for Withdrawal of Reference Adversary No. 20-00011-NPO Alysson Mills, in her capacity as receiver for Arthur Lamar Adams and Madison Timber Properties, LLC v. Jon Darrell Seawright Bankruptcy Case No. 19-03921-NPO Jon Darrell Seawright Dear Mr. Johnston: In connection with the Motion to Withdraw the Bankruptcy Reference (the “Motion to Withdraw”) (Adv. Dkt. #24) filed in the above adversary proceeding by Kristen Amond, Esq., on behalf of Alysson Mills , I am this date transmitting the following documents to you, Clerk, United States Court:

• Adversary Proceeding Case Docket • Motion to Withdraw (Adv. Dkt. #24) • Memorandum in Support of Motion to Withdraw (Adv. Dkt. #25) • Clerk’s Notice of Deadline to File Response or Objection (Adv. Dkt. #26) • Certificate of Notice (Adv. Dkt. #28) • Adversary Complaint to Determine Dischargeability of Debt Pursuant to 11 U.S.C. Sect. 523

(Adv. Dkt. #1) • Voluntary Petition for Individuals Filing for Bankruptcy (Bankruptcy Case No. 19-03921-NPO

Bk. Dkt. #1)

Please note the assigned judge and case number on a copy of this letter and return to me via email at [email protected]. Sincerely, Danny L. Miller, Clerk of Court By: /s/Collette Derouen Chief Deputy

Receipt is acknowledged of the documents described herein. Date Received: Case No. Assigned: __________________________________________ Judge Assigned: Received By: ________________________________________________, Deputy

Clerk

Danny L. Miller Clerk of Court

United States Bankruptcy Court Southern District of Mississippi

Jackson Office P. O. Box 2448

Jackson, MS 39201-2448 Telephone: 601-608-4600

Gulfport Office 2012 15th Street

Suite 244 Gulfport, MS 39501

Telephone: 228-563-1790

3/31/2020 3:20-cv-232-TSL-RHWTSL-RHW

Case 3:20-cv-00232-CWR-FKB Document 1-1 Filed 03/31/20 Page 1 of 1

QC, WithdrawRef

U.S. Bankruptcy CourtSouthern District of Mississippi (Jackson−3 Divisional Office)

Adversary Proceeding #: 20−00011−NPO

Assigned to: Neil P. OlackLead BK Case: 19−03921Lead BK Title: Jon Darrell SeawrightLead BK Chapter: 7Demand:

Date Filed: 02/07/20

Nature[s] of Suit: 67 Dischargeability − 523(a)(4), fraud as fiduciary, embezzlement, larceny68 Dischargeability − 523(a)(6), willful and malicious injury62 Dischargeability − 523(a)(2), false pretenses, false representation, actual fraud

Plaintiff−−−−−−−−−−−−−−−−−−−−−−−Alysson Mills, in her capacity as receiver forArthur Lamar Adams and Madison TimberProperties, LLC

represented by Kristen D. AmondFishman Haygood, LLP201 St. Charles AvenueSuite 4600New Orleans, LA 70170504−586−5253Fax : 504−586−5250Email: [email protected]

Brent B. BarriereFishman Haygood, LLP201 St. Charles AvenueSuite 4600New Orleans, LA 70170504−586−5253Fax : 504−586−5250Email: [email protected]

Lilli Evans BassBrown Bass & Jeter, PLLCP O Box 22969Jackson, MS 39225601−665−8568Email: [email protected]

Rebekka C. VeithFishman Haygood, LLP201 St. Charles AvenueSuite 4600New Orleans, LA 70170504−586−5253

V.

Defendant−−−−−−−−−−−−−−−−−−−−−−−

Page 1 of 55


Jon Darrell SeawrightSSN / ITIN: xxx−xx−3273

represented by R. Michael BolenHood & Bolen, PLLC3770 Hwy. 80 WestJackson, MS 39209601−923−0788Fax : 601−922−2968Email: [email protected]

Trustee−−−−−−−−−−−−−−−−−−−−−−−Derek A Henderson T11765−A Lelia DriveSuite 103Jackson, MS 39216601−948−3167

U.S. Trustee−−−−−−−−−−−−−−−−−−−−−−−United States Trustee501 East Court StreetSuite 6−430Jackson, MS 39201(601) 965−5241

Filing Date # Docket Text

03/16/2020

24 Motion for Withdrawal of Reference Date of Service: 3/16/2020. ReceiptNumber 12288160, Fee Amount $181 Filed by Plaintiff Alysson MillsObjections due 03/30/2020. Note: See Fed. R. Bankr. P. 9006(f). Threeadditional days may be allowed for qualifying parties. (Amond,Kristen) (Entered: 03/16/2020)

03/16/2020

25 Brief in Support Filed by Plaintiff Alysson Mills (RE: relateddocument(s)24 Motion for Withdrawal of Reference Date of Service:3/16/2020. Receipt Number 12288160, Fee Amount $181). (Amond,Kristen) (Entered: 03/16/2020)

03/16/2020

26 Notice of Deadline to File Response or Objection to Motion to WithdrawReference (RE: 24 Motion for Withdrawal of Reference filed by PlaintiffAlysson Mills) (Derouen, Collette) (Entered: 03/16/2020)

03/18/2020

28 BNC Certificate of Mailing − PDF Document. (RE: related document(s)26Notice of Motion to Withdraw Reference) Notice Date 03/18/2020.(Admin.) (Entered: 03/18/2020)

Page 2 of 55


QC, WithdrawRef

U.S. Bankruptcy CourtSouthern District of Mississippi (Jackson−3 Divisional Office)

Adversary Proceeding #: 20−00011−NPO

Assigned to: Neil P. OlackLead BK Case: 19−03921Lead BK Title: Jon Darrell SeawrightLead BK Chapter: 7Demand:

Date Filed: 02/07/20

Nature[s] of Suit: 67 Dischargeability − 523(a)(4), fraud as fiduciary, embezzlement, larceny68 Dischargeability − 523(a)(6), willful and malicious injury62 Dischargeability − 523(a)(2), false pretenses, false representation, actual fraud

Plaintiff−−−−−−−−−−−−−−−−−−−−−−−Alysson Mills, in her capacity as receiver forArthur Lamar Adams and Madison TimberProperties, LLC

represented by Kristen D. AmondFishman Haygood, LLP201 St. Charles AvenueSuite 4600New Orleans, LA 70170504−586−5253Fax : 504−586−5250Email: [email protected]

Brent B. BarriereFishman Haygood, LLP201 St. Charles AvenueSuite 4600New Orleans, LA 70170504−586−5253Fax : 504−586−5250Email: [email protected]

Lilli Evans BassBrown Bass & Jeter, PLLCP O Box 22969Jackson, MS 39225601−665−8568Email: [email protected]

Rebekka C. VeithFishman Haygood, LLP201 St. Charles AvenueSuite 4600New Orleans, LA 70170504−586−5253

V.

Defendant−−−−−−−−−−−−−−−−−−−−−−−

Page 1 of 55


mailto:[email protected]



Jon Darrell SeawrightSSN / ITIN: xxx−xx−3273

represented by R. Michael BolenHood & Bolen, PLLC3770 Hwy. 80 WestJackson, MS 39209601−923−0788Fax : 601−922−2968Email: [email protected]

Trustee−−−−−−−−−−−−−−−−−−−−−−−Derek A Henderson T11765−A Lelia DriveSuite 103Jackson, MS 39216601−948−3167

U.S. Trustee−−−−−−−−−−−−−−−−−−−−−−−United States Trustee501 East Court StreetSuite 6−430Jackson, MS 39201(601) 965−5241

Filing Date # Docket Text

03/16/2020

24 Motion for Withdrawal of Reference Date of Service: 3/16/2020. ReceiptNumber 12288160, Fee Amount $181 Filed by Plaintiff Alysson MillsObjections due 03/30/2020. Note: See Fed. R. Bankr. P. 9006(f). Threeadditional days may be allowed for qualifying parties. (Amond,Kristen) (Entered: 03/16/2020)

03/16/2020

25 Brief in Support Filed by Plaintiff Alysson Mills (RE: relateddocument(s)24 Motion for Withdrawal of Reference Date of Service:3/16/2020. Receipt Number 12288160, Fee Amount $181). (Amond,Kristen) (Entered: 03/16/2020)

03/16/2020

26 Notice of Deadline to File Response or Objection to Motion to WithdrawReference (RE: 24 Motion for Withdrawal of Reference filed by PlaintiffAlysson Mills) (Derouen, Collette) (Entered: 03/16/2020)

03/18/2020

28 BNC Certificate of Mailing − PDF Document. (RE: related document(s)26Notice of Motion to Withdraw Reference) Notice Date 03/18/2020.(Admin.) (Entered: 03/18/2020)

Page 2 of 55



https://ecf.mssb.uscourts.gov/doc1/104015999507








JACKSON DIVISION

IN RE:


Debtor.

CASE NO. 19-03921

Chapter 7


Plaintiff,

v.


Defendant.

ADV. NO. 20-00011-NPO

MOTION TO WITHDRAW THE BANKRUPTCY REFERENCE

**RELIEF IS SOUGHT FROM A UNITED STATES DISTRICT JUDGE**


Lamar Adams and Madison Timber Properties, LLC (the “Receiver”), moves for an order of the

United States District Court for the Southern District of Mississippi, withdrawing the reference of

this adversary proceeding to the United States Bankruptcy Court for the Southern District of

Mississippi, for cause shown, in accordance with 28 U.S.C. § 157, Federal Rule of Bankruptcy

Procedure 5011(a), and Rule 5011-1 of the Local Rules for the United States Bankruptcy Court

for the Southern District of Mississippi. The Debtor-Defendant, Jon Seawright, does not oppose

her motion.

The Receiver submits the accompanying memorandum in support.

20-00011-NPO Dkt 24 Filed 03/16/20 Entered 03/16/20 12:33:33 Page 1 of 3

Page 3 of 55


Further, the Receiver designates pursuant to Local Bankruptcy Rule 5011-1(3) the

following pleadings as relevant to the disposition of this motion:

1. Jon Seawright’s Voluntary Petition for Bankruptcy, Doc. 1, In re: Jon Darrell Seawright, No. 19-03921 (Bankr. S.D. Miss.); and

2. Receiver’s Adversary Complaint, Doc. 1, Alysson Mills v. Jon Darrell Seawright, Adv. No. 20-00011 (Bankr. S.D. Miss.).

WHEREFORE, the Receiver respectfully requests that an order issue withdrawing the

reference of this adversary proceeding pursuant to 28 U.S.C. § 157(d).

March 16, 2020







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Page 5 of 55



JACKSON DIVISION

IN RE:


Debtor.

CASE NO. 19-03921

Chapter 7


Plaintiff,

v.


Defendant.

ADV. NO. 20-00011-NPO

MEMORANDUM IN SUPPORT OF MOTION TO WITHDRAW THE BANKRUPTCY REFERENCE


Lamar Adams and Madison Timber Properties, LLC (the “Receiver”), respectfully submits this

memorandum in support of her motion for an order of the United States District Court for the

Southern District of Mississippi, withdrawing the reference of this adversary proceeding to the

United States Bankruptcy Court for the Southern District of Mississippi, for cause shown, in

accordance with 28 U.S.C. § 157, Federal Rule of Bankruptcy Procedure 5011(a), and Rule 5011-

1 of the Local Rules for the United States Bankruptcy Court for the Southern District of

Mississippi.


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Determination of this adversary proceeding involves factual and legal determinations

required in the Receiver’s action against Seawright that is currently pending before the District

Court. Although this adversary proceeding is a core proceeding under 28 U.S.C. § 157(b)(2)(I),

the Receiver’s civil action against Seawright involves intertwined issues based in state law. For

these reasons and those stated below, withdrawal of the reference of the Adversary Proceeding

pursuant to 28 U.S.C. § 157(d) for determination of the non-dischargeability of Seawright’s debts

together with the issues presented in the civil action is proper.

BACKGROUND

The Receiver’s Civil Action

On December 19, 2018, the Receiver filed a complaint against Butler Snow LLP; Butler

Snow Advisory Services, LLC; Matt Thornton; Baker, Donelson, Bearman, Caldwell &

Berkowitz, PC; Alexander Seawright, LLC; Brent Alexander; and Jon Seawright, alleging the law

firms and their agents lent their influence, their professional expertise, and even their clients to

Lamar Adams and Madison Timber (“Civil Action”).1 The Civil Action, along with all other

matters relating to Lamar Adams and Madison Timber, is pending before Judge Carlton Reeves,

United States District Judge for the Southern District of Mississippi.2

1 Doc. 1, Alysson Mills v. Butler Snow, LLP, et al., No. 3:18-cv-866 (S.D. Miss.). The Receiver amended her complaint on November 22, 2019. 2 Because the District Court that appointed the Receiver, the District Court has jurisdiction over any claim brought by the Receiver in the execution of her duties. “[I]t is well-settled that when an initial suit results in the appointment of the receiver, any suit that the receiver thereafter brings in the appointment court in order to execute h[er] duties is ancillary to the main suit.” U.S. Small Bus. Admin. v. Integrated Envtl. Sols., Inc., No. 05-cv-3041, 2006 WL 2336446, at *2 (S.D. Tex. Aug. 10, 2006) (citing Haile v. Henderson Nat’l Bank, 657 F.2d 816, 822 (6th Cir. 1981)). See also 28 U.S.C. § 1692 (“In proceedings in a district court where a receiver is appointed for property, real, personal, or mixed, situated in different districts, process may issue and be executed in any such district as if the property lay wholly within one district . . . ”).

Consistent with that precedent, Chief U.S. District Judge Daniel P. Jordan III has ordered that all “cases filed by the duly appointed Receiver . . . which . . . arise out of or relate to [Securities & Exchange Commission v. Arthur Lamar Adams and Madison Timber Properties, LLC, No. 3:18-cv-252-CWR-FKB] shall be directly assigned by the Clerk of Court to U.S. District Judge Carlton W. Reeves and U.S. Magistrate Judge F. Keith Ball.” Doc. 45, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss).


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The Receiver’s complaint in the Civil Action alleges that Adams and Madison Timber’s

relationship with Baker Donelson began in 2011 when Adams was introduced to John Seawright

and his partner Brent Alexander, a lawyer and lobbyist who formed a fund to invest other people’s

money in Madison Timber. The relationship continued until Adams turned himself in. Over the

course of the relationship, Seawright and Alexander pitched Madison Timber to potential

investors, including Baker Donelson’s clients; consummated sales of Madison Timber to

investors; and received commissions from Adams for their assistance in growing Madison

Timber’s business. Seawright and Alexander relied heavily on their affiliation with Baker

Donelson in securing investments, and Baker Donelson lent Seawright and Alexander its resources

for that purpose. Seawright, Alexander, and their law firm, Baker Donelson, were in advantageous

positions to discover Adams’s fraud, but they ignored numerous red flags. Without Seawright’s

encouragement and assistance, Madison Timber would not have continuously grown—it would

have failed before ensnaring hundreds of unwitting investors. In return for his assistance,

Seawright received “commissions” and fees from Adams.

The Receiver’s complaint includes counts for civil conspiracy; aiding and abetting;

recklessness, gross negligence, and at a minimum negligence; violations of Mississippi’s

Fraudulent Transfer Act; violations of Mississippi’s Racketeer Influenced and Corrupt

Organization Act; joint venture liability; attorney malpractice; and negligent retention and

supervision. The Receiver demanded that the matter be heard by a jury.


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Seawright, like his co-defendants, answered and moved to dismiss the original complaint

in the Civil Action.3 The District Court denied Seawright’s and his co-defendants’ motions to

dismiss and invited the Receiver to amend her complaint.4

On November 22, 2019, the Receiver filed an amended complaint in the Civil Action,

alleging the same counts as the original complaint but also asserting those claims as the assignee

of certain investors.5 Seawright’s partner, Alexander, and his law firm, Baker Donelson, filed

motions to dismiss the Receiver’s amended complaint, which are fully briefed and pending before

the District Court.

Seawright’s bankruptcy and the Receiver’s Adversary Proceeding

Seawright filed a Chapter 7 petition for bankruptcy on November 3, 2019, triggering an

automatic stay of litigation against him pursuant to 11 U.S.C. § 362.6 Seawright’s largest

scheduled liability in his bankruptcy case is his potential obligation to the Receiver.

On February 7, 2020, the Receiver filed an adversary proceeding against Seawright to

determine the dischargeability of debt pursuant to 11 U.S.C. § 523 (“Adversary Complaint”).7 The

Receiver alleges that Seawright’s debts are nondischargeable because they were obtained by false

pretenses, false representations, and/or actual fraud; by fraud or defalcation while acting in a

fiduciary capacity; and because Seawright incurred those debts while causing willful and

malicious injury to another entity or to the property of another entity.

3 Docs. 31, 33, Alysson Mills v. Butler Snow, LLP, et al., No. 3:18-cv-866 (S.D. Miss.). 4 Doc. 49, Alysson Mills v. Butler Snow, LLP, et al., No. 3:18-cv-866 (S.D. Miss.). 5 Doc. 57, Alysson Mills v. Butler Snow, LLP, et al., No. 3:18-cv-866 (S.D. Miss.). 6 Doc. 1, In re: Jon Darrell Seawright, No. 19-03921 (Bankr. S.D. Miss.). 7 Doc. 1, Alysson Mills v. Jon Darrell Seawright, Adv. No. 20-00011 (Bankr. S.D. Miss.).


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The factual allegations in the Adversary Complaint arise from Seawright’s involvement in

the Madison Timber Ponzi scheme.

Seawright has not yet filed a response in the Adversary Proceeding.

ARGUMENT

Section 1334(a) of Title 28 grants original and exclusive jurisdiction over bankruptcy cases

to the United States District Courts. 28 U.S.C. § 1334(a). Section 157(a) allows a district court to

refer these powers to a bankruptcy court. 28 U.S.C. § 157(a). In accordance with Section 157(a),

the District Court for the Southern District of Mississippi has issued a standing order generally

referring all cases and proceedings “arising under” Title 11 or “arising in or related to a case under

Title 11” to the bankruptcy judges for the Southern District of Mississippi.8 Section 157(d)

provides for both mandatory and permissive withdrawal to the District Court of the reference of

an action from the Bankruptcy Court. Permissive withdrawal is appropriate in this case.

The District Court is authorized by 28 U.S.C. § 157(d) to withdraw, in whole or in part,

the reference as to any case or controversy “for cause shown.” See Fed. R. Bankr. P. 5011(a).

“Cause shown” is not defined in the statute, but the Fifth Circuit has held that District Courts

should decide “cause” for permissive withdrawal of the reference by considering whether: “(1)

the underlying lawsuit is a non-core proceeding; (2) uniformity in bankruptcy administration will

be promoted; (3) forum shopping and confusion will be reduced; (4) economical use of the

debtors’ and creditors’ resources will be fostered; (5) the bankruptcy process will be expedited;

and (6) a party has demanded a jury trial.” In re Align Strategic Partners LLC, No. 16-35702,

2019 WL 2524938, at *2 (Bankr. S.D. Tex. Mar. 5, 2019) (citing Holland Am. Ins. Co. v.

8 See Internal Rule 1 for the United States District Court for the Southern District of Mississippi, 3:40-mc-00011 (S.D. Miss.). See also Local Rule 83.6.


Page 10 of 55


Succession of Roy, 777 F.2d 992, 999 (5th Cir. 1985)). Ultimately, the decision to withdraw the

reference from the bankruptcy court is “left to the discretion of the district court.” In re Mirant

Corp., 197 Fed. App’x 285, 294 (5th Cir. 2006).

The Receiver will address each factor in turn:

Core versus non-core matter

The Receiver’s Adversary Proceeding seeks only a finding of non-dischargeability. Such

a proceeding is core pursuant to Section 157(b)(2)(I). But that fact “is not alone determinative.”

In re Morrison, 409 B.R. 384, 392 (S.D. Tex. 2009). When considered with the other factors,

withdrawal of the reference is appropriate here.

Uniformity in bankruptcy administration

Only when the bankruptcy court “maintains an ‘intimate familiarity’ with the case and has

dedicated a large amount of time and resources to the adversary proceeding” does this factor weigh

against withdrawing the reference. In re Lopez, No. 09-70659, 2017 WL 3382099, at *9 (Bankr.

S.D. Tex. Mar. 20, 2017); see also In re Doctors Hosp. 1997, L.P., 351 B.R. 813, 868 (Bankr.

S.D. Tex. 2006) (the “uniformity” factor weighs in favor of withdrawal only when the bankruptcy

court has become “intimately familiar with the underlying facts, the parties, and the remaining

issues”).

This factor favors withdrawal here—it is the District Court that is “intimately familiar”

with the underlying facts and issues. The District Court has presided over all matters involving the

Madison Timber Ponzi scheme since at least April 2018, when Lamar Adams turned himself in

on the heels of investigations of him by the F.B.I. and U.S. Attorney’s Office for the Southern

District of Mississippi. The District Court presided over the criminal action brought against Lamar

Adams and the criminal trial of one of Adams’s recruiters, Bill McHenry.


Page 11 of 55


It is the District Court that appointed the Receiver and that has directed her “to sue for and

collect, recover, receive or take into possession from third parties all Receivership Property,

Receivership Records, and any assets traceable to assets of the Receivership estate.”9 Pursuant to

the District Court’s directive, the Receiver has filed multiple lawsuits against third parties, seeking

recoveries for the benefit of the defrauded investors of Madison Timber. Each of these cases is

pending before the District Court.

As it relates to the Civil Action, the District Court has already once denied motions to

dismiss the Receiver’s original complaint, which were filed by Seawright and his co-defendants.

Further briefing at the pleadings stage currently remains before the District Court. The District

Court has undoubtedly “dedicated a large amount of time and resources” to the lawsuits brought

by the Receiver and knows well the factual and legal issues presented—many of which arise in

each of the lawsuits filed by the Receiver.

The Bankruptcy Court, on the other hand, has been asked to dedicate relatively less time

and few resources to the Adversary Proceeding. This motion to withdraw the reference is being

filed before Seawright has even responded to the Adversary Complaint.

This factor favors withdrawal.

Forum shopping and confusion

For many of the same reasons that withdrawal of the reference promotes uniformity, the

risk of forum shopping and confusion is minimal, if any exists at all. The Receiver seeks

withdrawal of the bankruptcy reference not to forum shop, but to ensure the most efficient

resolution of the factual and legal issues in order to lessen the financial burden on the Receivership

9 Doc. 33, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss).


Page 12 of 55


Estate, which exists for the benefit of defrauded investors, and presumably on Seawright. Indeed,

Seawright does not object to withdrawing the Adversary Proceeding to the District Court.

Economical use of the parties’ resources

The Receiver has been litigating her claims against various defendants, including

Seawright, since 2018. The Receiver’s allegations in the Civil Action and Adversary Proceeding

involve the same factual allegations, many of the same legal issues, and the same likely legal

defenses. The parties have undergone substantial briefing on Rule 12 motions in the Civil Action,

which would likely be unnecessarily replicated if the Adversary Proceeding remains in

Bankruptcy Court. See Green Tree Servicing v. Haynes, No. 3:16-CV-551-WHB-JCG, 2016 WL

10935359, at *2 (S.D. Miss. Oct. 19, 2016).

The Receiver alleges in the Civil Action that Seawright, and his law firm, Baker Donelson,

lent their influence, professional expertise, and clients to Adams and Madison Timber. She further

alleges that Seawright used his position of trust to sell fraudulent investments to unsuspecting

investors, which assisted Madison Timber’s growth. The Receiver’s objections to the

dischargeability of Seawright’s debts are likewise based on Seawright’s false pretenses, false

representations, and breaches of duty to investors in Madison Timber. Withdrawal of the reference

is therefore appropriate because “the issues involved in determining liability and dischargeability

of the obligations which may arise from liability are intertwined.” In re Sutherlin, No. 86-1066,

1987 WL 5712, at *4 (E.D. La. Jan. 15, 1987).


Expediting the bankruptcy process

A District Court should withdraw the reference unless the “withdrawal would unduly delay

the administration of the bankruptcy case.” In re Royce Homes, LP, 578 B.R. 748, 763 (Bankr.


Page 13 of 55


S.D. Tex. 2017). Seawright has not yet responded to the Adversary Complaint. No discovery has

been conducted in the Adversary Proceeding, but similar—if not the exact same—evidence will

be required in the Adversary Proceeding as in the Civil Action. Withdrawal of the reference

therefore expedites the bankruptcy process because it eliminates (1) the prospect of

contemporaneous proceedings in the District Court and the Bankruptcy Court on the same facts

and legal issues and (2) an appeal from either party of the Bankruptcy Court’s adjudication of the

Adversary Proceeding.


Whether jury demands have been made

The Receiver has not demanded a jury trial in the Adversary Proceeding, as there is

generally no right to a jury trial on dischargeability. In re Whitehorn, 99 B.R. 734, 737 (Bankr.

N.D. Tex. 1989). The Receiver has demanded in the Civil Action a jury trial on all issues, including

Seawright’s liability and damages.

The Receiver has not filed a proof of claim in Seawright’s bankruptcy proceeding, does

not consent to the bankruptcy court entering a final order in the Adversary Proceeding, and does

not consent to the bankruptcy court conducting a jury trial in this proceeding.

On balance, withdrawal of the reference of the Adversary Proceeding pursuant to 28 U.S.C.

§ 157(d) for determination of the non-dischargeability of Seawright’s debts together with the

issues presented in the civil action is proper.


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CONCLUSION

The District Court is authorized to withdraw the Adversary Proceeding for “cause shown.”

This decision is “left to the discretion of the district court.” In re Mirant Corp., 197 Fed. App’x

285, 294 (5th Cir. 2006). The factual and legal issues of the Civil Action and Adversary

Proceeding are intertwined; judicial efficiency and the economical use of the parties’ resources

are compelling cause here.

March 16, 2020











Page 15 of 55


of 2

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF MISSISSIPPI

IN RE: JON DARRELL SEAWRIGHT CASE NO. 19-03921-NPO DEBTOR. CHAPTER 7 Alysson Mills, in her capacity as receiver for Arthur Lamar Adams and Madison Timber Properties, LLC

Plaintiff

v. Adv. Proc. No. 20-00011-NPO Jon Darrell Seawright

Defendant

NOTICE OF DEADLINE TO FILE RESPONSE

OR OBJECTION TO MOTION TO WITHDRAW THE BANKRUPTCY REFERENCE You are hereby notified that on March 13, 2020, Alysson Mills, in her capacity as receiver for the estates of Arthur Lamar Adams and Madison Timber Properties, LLC filed a Motion to Withdraw the Bankruptcy Reference (the “Motion to Withdraw”) (Dkt. 24) in the above-referenced adversary proceeding. Pursuant to Rule 5011-1 of the Mississippi Bankruptcy Local Rules (“Local Rule 5011-1”), any response or objection to the Motion to Withdraw must be filed in the U.S. Bankruptcy Court within fourteen (14) days of the date of service of the Motion to Withdraw. MISS. BANKR. L.R. 5011-1(a)(4). After expiration of the fourteen (14)-day response period, Local Rule 5011-1 requires the Clerk of the Bankruptcy Court to promptly transmit the Motion to Withdraw and any responses and attached exhibits to the Clerk of the U.S. District Court. MISS. BANKR. L.R. 5011-1(a)(5). If you do not want the U.S. District Court to grant the Motion to Withdraw or if you want the U.S. District Court to consider your views on the Motion to Withdraw, you or your attorney must file a written response explaining your position so that the Clerk of the Bankruptcy Court receives it before the deadline for transmitting the documents to the U.S. District Court. Attorneys and Registered Users of the Electronic Case Filing (ECF) system should file any response using ECF. Others should file any response at U.S. Bankruptcy Court, Thad Cochran U.S. Federal Courthouse, 501 East Court Street, Suite 2.300, Jackson, MS 39201. Date: 3/16/2020 Danny L. Miller, Clerk of Court

By: /s/Collette Derouen Chief Deputy


Page 16 of 55


of 2

Service provided to the following parties on 3/16/2020 via the ECF system: cc: Kristen D. Amond, Esq. [email protected], [email protected];[email protected] Brent B. Barriere, Esq. [email protected] Lilli Evans Bass, Esq. [email protected], [email protected];[email protected] R. Michael Bolen, Esq. [email protected], [email protected] Derek A Henderson [email protected], [email protected];[email protected] United States Trustee [email protected]


Page 17 of 55


United States Bankruptcy Court Southern District of Mississippi

Mills, Plaintiff Adv. Proc. No. 20-00011-NPO

Seawright, Defendant CERTIFICATE OF NOTICEDistrict/off: 0538-3 User: cderouen Page 1 of 1 Date Rcvd: Mar 16, 2020 Form ID: pdf012 Total Noticed: 1

Notice by first class mail was sent to the following persons/entities by the Bankruptcy Noticing Center onMar 18, 2020.aty +Rebekka C. Veith, Fishman Haygood, LLP, 201 St. Charles Avenue, Suite 4600, New Orleans, LA 70170-4701

Notice by electronic transmission was sent to the following persons/entities by the Bankruptcy Noticing Center.NONE. TOTAL: 0

***** BYPASSED RECIPIENTS (undeliverable, * duplicate) *****pla Alysson Millsdft Jon Darrell Seawright TOTALS: 2, * 0, ## 0

Addresses marked ’+’ were corrected by inserting the ZIP or replacing an incorrect ZIP.USPS regulations require that automation-compatible mail display the correct ZIP.

Transmission times for electronic delivery are Eastern Time zone.

I, Joseph Speetjens, declare under the penalty of perjury that I have sent the attached document to the above listed entities in the mannershown, and prepared the Certificate of Notice and that it is true and correct to the best of my information and belief.

Meeting of Creditor Notices only (Official Form 309): Pursuant to Fed. R. Bank. P. 2002(a)(1), a notice containing the complete SocialSecurity Number (SSN) of the debtor(s) was furnished to all parties listed. This official court copy contains the redacted SSN as requiredby the bankruptcy rules and the Judiciary’s privacy policies.

Date: Mar 18, 2020 Signature: /s/Joseph Speetjens

_

CM/ECF NOTICE OF ELECTRONIC FILING

The following persons/entities were sent notice through the court’s CM/ECF electronic mail (Email)system on March 16, 2020 at the address(es) listed below: Brent B. Barriere on behalf of Plaintiff Alysson Mills [email protected] Derek A Henderson T1 [email protected], [email protected];[email protected] Kristen D. Amond on behalf of Plaintiff Alysson Mills [email protected], [email protected];[email protected] Lilli Evans Bass on behalf of Plaintiff Alysson Mills [email protected], [email protected];[email protected] R. Michael Bolen on behalf of Defendant Jon Darrell Seawright [email protected], [email protected] United States Trustee [email protected] TOTAL: 6


Page 18 of 55


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Page 20 of 55


Adversary Complaint 20-00011-NPO Adv. Dkt. #1

Page 21 of 55



JACKSON DIVISION

IN RE: JON DARRELL SEAWRIGHT,

Debtor.

CASE NO. 19-03921 Chapter 7


Plaintiff,

v. JON DARRELL SEAWRIGHT,

Defendant.

ADV. NO.

ADVERSARY COMPLAINT TO DETERMINE DISCHARGEABILITY OF DEBT PURSUANT TO 11 U.S.C. § 523


Lamar Adams and Madison Timber Properties, LLC (the “Receiver”), through undersigned

counsel, files this Adversary Complaint to Determine Dischargeability of Debt Pursuant to 11

U.S.C. § 523 (the “Adversary Complaint”) against Jon Darrell Seawright (“Seawright” or

“Debtor”), stating as follows:

INTRODUCTION

For more than ten years, Arthur Lamar Adams (“Adams”), through his companies Madison

Timber Company, LLC and Madison Timber Properties, LLC (“Madison Timber”), operated a

Ponzi scheme that defrauded hundreds of investors. Investors believed that Madison Timber used


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2

investors’ money to purchase timber from Mississippi landowners; that Madison Timber sold the

timber to Mississippi lumber mills at a higher price; and that Madison Timber repaid investors

their principal plus interest with the proceeds of those sales. Investors received timber deeds that

purported to secure their investments—but the deeds were fake. There was no timber and no

proceeds from sales of timber. The money used to repay existing investors came solely from new

investors.

Madison Timber had to continuously grow to repay existing and new investors, and

continuously grow it did. In 2011, Madison Timber took in approximately $10 million from

investors. By 2018, that number had grown by a factor of 16. In the one-year period prior to April

19, 2018, the date Adams surrendered to federal authorities and confessed to the Ponzi scheme,

Madison Timber took in approximately $164.5 million. As of April 19, 2018, Madison Timber

had 501 outstanding promissory notes, reflecting debts to investors of more than $85 million.1

Adams misused Madison Timber to sustain a singular fraud over many years, and

Seawright and his law firm, Baker Donelson, assisted him. Madison Timber would not have grown

without Seawright’s encouragement. Seawright lent his influence, his professional expertise, and

even his clients to Adams. Seawright validated Adams and helped him attract new investors.

Because Seawright contributed to the success of the Madison Timber Ponzi scheme, he is

liable for the debts of the Receivership Estate to investors.

JURISDICTION AND VENUE

1. The Court has jurisdiction over this action and its parties pursuant to 28 U.S.C. §§

157 and 1334. Venue is proper in this Court pursuant to 28 U.S.C. § 1408.

1 The evidence at Adams’s sentencing established that of the $164.5 million that Madison Timber received in its last year of operation, it paid back approximately $79.5 million, leaving an $85 million difference. The outstanding principal and interest owed to investors is necessarily higher.


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PARTIES

2. The Receiver is a creditor and party-in-interest in this bankruptcy. The Receiver

stands in Madison Timber’s shoes for the express purpose of maximizing assets available to

Adams’s victims. The Receiver also pursues claims against Seawright as the holder of assignments

executed by investors.

3. Defendant Jon Seawright is an individual debtor in this bankruptcy case.

PROCEDURAL HISTORY

The S.E.C.’s enforcement action

4. On April 20, 2018, the Securities and Exchange Commission instituted certain

litigation against Arthur Lamar Adams and Madison Timber Company, LLC styled Securities and

Exchange Commission v. Arthur Lamar Adams, et al., Case No. 3:18-cv-00252-CWR-FKB. In

that civil action, the Securities & Exchange Commission (“S.E.C.”) alleges that “[b]eginning in

approximately 2004,” Adams, through Madison Timber, “committed securities fraud by operating

a Ponzi scheme” in violation of the Securities Act of 1933 and the Securities & Exchange Act of

1934.2

5. The S.E.C. requested that the Court appoint a receiver for the estates of Adams and

Madison Timber.3 The Court granted the S.E.C.’s request and appointed the Receiver on June 22,

2018.4

The Receiver’s ancillary action

6. The district court’s order of appointment vests in the Receiver the power to, among

2 Doc. 3, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss). 3 Docs. 11, 21, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss). 4 Doc. 33, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss).


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other things:

investigate and . . . bring such legal actions based on law or equity in any state, federal, or foreign court as the Receiver deems necessary or appropriate in discharging her duties as Receiver.5

7. On December 19, 2018, the Receiver filed suit against, inter alia, Jon Seawright

and his company, Alexander Seawright, LLC; and his law firm, Baker Donelson, pursuant to the

powers vested in her by the district court’s orders and applicable law.6 The Receiver’s complaint

includes counts against Seawright for civil conspiracy; aiding and abetting; recklessness, gross

negligence, and at a minimum negligence; violations of Mississippi’s Fraudulent Transfer Act;

violations of Mississippi’s Racketeer Influenced and Corrupt Organization Act; and joint venture

liability.

8. Certain investors have assigned their claims against, inter alia, Jon Seawright and

his company, Alexander Seawright, LLC; and his law firm, Baker Donelson, to the Receiver,

whose purpose is to maximize assets for investors’ benefit. The Receiver therefore also has

standing to pursue claims against Seawright as the holder of assignments executed by investors.

9. By filing a Chapter 7 petition for bankruptcy, Seawright availed himself of the

automatic stay of litigation provided to petitioners for bankruptcy pursuant to 11 U.S.C. § 362.

10. Although stayed as to Seawright, the ancillary matter has otherwise proceeded

before the district court. The matter is currently at the pleadings stage and no judgments have been

rendered.

5 Doc. 33, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss). By order dated August 22, 2018, the Court eliminated the requirement that the Receiver obtain “prior approval of this Court upon ex parte request” before bringing any legal action. Doc. 38, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss). 6 Doc. 1, Alysson Mills v. Butler Snow, et al. (S.D. Miss.). The Receiver filed an amended complaint on November 22, 2019. Doc. 57.


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ADAMS AND MADISON TIMBER

11. For more than ten years, Adams, through Madison Timber, operated a Ponzi

scheme that purported to purchase timber from Mississippi landowners and resell it to Mississippi

lumber mills at higher prices.

12. Investors in Madison Timber delivered to Madison Timber large sums of money,

typically in excess of $100,000 dollars, in reliance on the promise that Madison Timber would

repay them their principal plus interest of 13% per year. The promised interest invariably far

exceeded the interest any investor might receive on any other asset-backed investment.

13. Investors believed that Madison Timber would use their money to acquire timber

deeds and cutting agreements from Mississippi landowners; that Madison Timber would then sell

the timber to Mississippi lumber mills at a higher price; and that with the proceeds of those sales

Madison Timber would repay investors their principal and promised interest.

14. In exchange for their investments, investors in the Madison Timber Ponzi scheme

received a promissory note in the amount of their investment, payable in twelve monthly

installments together with the promised interest; twelve pre-dated checks, each in the amount of

the installment due under the promissory note; a timber deed and cutting agreement by which a

named landowner purported to grant to Madison Timber the rights to harvest timber on the land

described in the deed; and a timber deed and cutting agreement by which Madison Timber

purported to grant its own rights to the investor.

15. In fact, the timber deeds and cutting agreements were fake. Madison Timber had

no rights to harvest timber and no timber to cut and sell. Because Madison Timber had no

revenues whatsoever, investors were being repaid with new investors’ money.


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16. Each month, Madison Timber required more and more new investors to repay

existing investors. Like any Ponzi scheme, Madison Timber had to continuously grow. To grow

Madison Timber, Adams relied on recruiters, including Seawright, to attract new investors.

17. In 2011, Madison Timber took in approximately $10 million from investors. By

2018 that number had grown by a factor of 16.

18. In April 19, 2018, on the heels of investigations of him by the F.B.I. and the U.S.

Attorney’s Office for the Southern District of Mississippi, Adams turned himself in. In the

one-year period prior to April 19, 2018, Madison Timber took in approximately $164.5 million.

As of April 19, 2018, Madison Timber had 501 outstanding promissory notes, reflecting debts to

investors of more than $85 million.7

19. Adams pleaded guilty to the federal crime of wire fraud and “admit[ted] to all of the

conduct of the entire scheme and artifice to defraud.”8 On October 30, 2018, he was sentenced to

a term of imprisonment of 235 months.9

20. The S.E.C. separately charged Adams with violations of the Securities Act of 1933

and Securities & Exchange Act of 1934, alleging in its complaint that “[b]eginning in

approximately 2004,” Adams, through Madison Timber, “committed securities fraud by operating

a Ponzi scheme.”10

21. The promissory notes sold by Madison Timber to investors were “securities,” as

that term is defined under 15 U.S.C.A. §78(c)(A)(10) and Miss. Code Ann. § 75-71-102(28).

7 The evidence at Adams’s sentencing established that of the $164.5 million that Madison Timber received in its last year of operation, it paid back approximately $79.5 million, leaving an $85 million difference. The outstanding principal and interest owed to investors is necessarily higher. 8 Doc. 11, United States v. Adams, No. 3:18-cr-00088 (S.D. Miss). 9 Doc. 21, United States v. Adams, No. 3:18-cr-00088 (S.D. Miss). 10 Doc. 3, Securities & Exchange Commission vs. Adams, et al., No. 3:18-cv-00252 (S.D. Miss).


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22. As alleged in the complaint in the action Securities and Exchange Commission v.

Arthur Lamar Adams et al., No. 3:18-cv-252 (S.D. Miss.), and in the bill of information filed

against Adams in U.S. v. Arthur Lamar Adams, No. 3:18-c-188 (S.D. Miss.), Adams, Madison

Timber, and their affiliates, including Seawright, facilitated sales of promissory notes to investors

through material misstatements and omissions; employed a device, scheme, or artifice to defraud;

and engaged in acts, practices, or courses of business that operated or would operate as a fraud or

deceit, all in violation of Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(A); Section

10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. §

240.10b-5, thereunder; as well as the Mississippi Securities Act, Miss. Code Ann. § 75-71-501.

23. The sales furthermore violated the Securities Act of 1933 and the Mississippi

Securities Act because there were no registration statements for the promissory notes, see Section

5 of the Securities Act of 1933, 15 U.S.C § 77e, and Miss. Code Ann. § 75-71-301; and the

promissory notes were not exempt from registration, see Section 5 of the Securities Act of 1933,

15 U.S.C § 77e, and Miss. Code Ann. §§ 75-71-201 through 75-71-203.

SEAWRIGHT AND BAKER DONELSON

24. Adams and Madison Timber’s relationship with Seawright and Baker Donelson

began in 2011 and continued until Adams turned himself in on April 19, 2018.

A joint venture

25. In 2011, Jon Seawright and his partner, Brent Alexander, a lawyer and lobbyist at

the Baker Donelson law firm in Jackson, were looking to start a new investment fund.

26. Seawright and Alexander made acquaintances with Adams and a partnership

quickly formed. Seawright and Alexander would create an LLC that would pool other people’s


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8

money to invest in Madison Timber, and Adams would share the returns with Seawright and

Alexander. From Seawright’s perspective, it was “a virtually risk free deal”:

I feel pretty good about this . . . Please explain to me why this is not a virtually risk free deal. There is no pricing risk – everything is tied down on the front end. The only risk I see is (i) mill defaults, but you still own the land, (ii) Lamar is a fraud, but no evidence of that, or (iii) such a fundamental collapse of the timber industry that mill defaults and uncut timber is less than purchase price, but investor is oversecured almost 2:1, so there would have to be catastrophic collapse. Jds 27. Seawright and Alexander saw a big opportunity in Madison Timber, but to raise

“significant capital” for Adams, they needed to do some “smaller investments to prove out the

income earning potential.” They pitched the first investment to a client of Baker Donelson.

Seawright told the client that Seawright and Alexander would be responsible for everything:

We would be responsible for papering everything, liaison with Lamar, monitoring process of sale of timber, acquisition of timber rights, proper recording of documents, etc., distribution of loan repayments and otherwise managing the investment.

Seawright told the client that “[r]unning funds through us or BD [Baker Donelson] escrow is not a

problem,” and all “legal and other admin expenses” would “come out of our share.”

28. Seawright and Alexander’s “share” would include a portion of each investment’s

return, what Adams called a “birddog fee.” Adams told Seawright and Alexander that he could

ensure a 14% “profit” with a 2% “birddog fee” built-in, but Seawright and Alexander could decide

“how you guys want the split done.”

29. Seawright proposed instead that each investment’s promissory note bear 13%

interest, of which investors would receive 10% and Seawright and Alexander would keep 3%.

Separately, Seawright and Alexander negotiated an additional 3% commission for themselves. As

a result, Seawright and Alexander’s “share” of each investment’s return included the 3% they

disclosed to investors, plus an extra undisclosed 3% that Adams paid them directly.


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30. Seawright drafted subscription agreements and accompanying documents for the

sales of units in what was then called Alewright Investments, LLC, later renamed Alexander

Seawright Timber Fund I, LLC. From 2011 until April 2018, Seawright and Alexander used their

fund to invest other people’s money in Madison Timber and split the “profits” with Adams.

The pitch

31. Throughout this time period Seawright and Alexander 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 Seawright nor Alexander 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.”

32. Seawright and Alexander 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.

Easy money

33. Investors were led to believe that they could rely on Seawright and Alexander to

evaluate each investment using their professional expertise and judgment, which was backed by

Baker Donelson’s reputation. In fact, Seawright and Alexander undertook no meaningful

evaluation of the investments they pushed on unwitting persons, including Baker Donelson’s

clients. At the beginning of their partnership with Adams, Seawright asked questions such as

“Who bears the loss with respect to the destruction of timber? For example, if there is fire, beetles,

hurricane, whatever, who is on the hook? Is it an insured risk?” But he accepted Adams’s answers

to his questions without follow-up. Adams told Seawright that Madison Timber had “umbrella


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[insurance] on all tracts” (he added, “Expensive, don’t need it but have it”). Seawright never asked

to inspect the insurance, which did not exist.

34. Investors were led to believe that Seawright and Alexander personally inspected

the timber underlying each investment. Of course they did not. Seawright and Alexander lied to

investors. Seawright and Alexander gave investors “Equity Term Sheets” that described each

upcoming investment opportunity. An “Equity Term Sheet” dated March 5, 2017, for instance,

explained that for the “minimum investment” of $25,000, an investor would share in the “cutting

rights on tracts of land in various counties (the ‘Timber Rights’).” Like all of Seawright and

Alexander’s “Equity Term Sheets,” the “Equity Term Sheet” dated March 5, 2017, expressly

represented that Seawright and Alexander would personally inspect the property in question:

Company [Seawright and Alexander] will inspect the property related to the Timber Rights, must receive the original, executed Note and timber deed and will inspect the executed agreement(s) with the timber mill(s).

Seawright and Alexander could not and did not inspect the property in question—nor “the

executed agreement(s) with the timber mill(s)”—because such did not exist. These representations

were patently false.

35. Seawright and Alexander even devised a “Timber Rights Investment Closing

Checklist” that included among its list of things to do “Review Mill Contract” and “Review Land

re Timber.” Seawright and Alexander could not and did not review any “Mill Contract” or “Land

re Timber” because there was no “Mill Contract” or “Land re Timber” to review.

36. On information and belief, Seawright and Alexander “inspected” a purported

timber tract only once or twice, at the very inception of their partnership with Adams. The

“inspection” was hardly professional. Email traffic indicates “inspection” meant “[grab] a cooler

of beer and make a loop.”


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37. Between 2011 and April 2018, Seawright and Alexander 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.”

38. On information and belief, Adams also sometimes paid Seawright and Alexander

bonuses, including Christmas bonuses in cash that he had delivered to Seawright and Alexander at

their Baker Donelson office.

39. For all this time, Seawright and Alexander acted as unlicensed brokers, in violation

of federal and state law. A broker is “any person engaged in the business of effecting transactions

in securities for the account of others.” See Section 3(4) of the Securities Exchange Act of 1934, 15

U.S.C. § 78c. The S.E.C.’s public website states that the receipt of transaction-related

commissions is a key indicator that a broker must be registered.11 A recent search using the

Financial Industry Regulatory Authority’s public online BrokerCheck confirms that neither

Seawright nor Alexander have ever registered with the S.E.C.

40. Investors might fairly question what Seawright and Alexander did to investigate the

investment. The reality is not much. In October 2017, Alexander bragged to a potential investor

that “to our surprise, we have now financed the purchase of about $60 million in timber . . . It has

worked so well that we simply send out an email on the 15th of each month and some hours later

have collected the investment we need for the next round.”

41. Neither Seawright nor Alexander conducted an even cursory inspection of Madison

Timber’s operations. If they had, they would have realized what should have been obvious—that

the money was too good to be true because Madison Timber was nothing more than a Ponzi

11 Guide to Broker-Dealer Registration, U.S. SECURITIES & EXCHANGE COMMISSION https://www.sec.gov/reportspubs/investor-publications/divisionsmarketregbdguidehtm.html.


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12

scheme. Instead, they aided and abetted Madison Timber’s growth, providing Adams and

Madison Timber their influence and their clients.

Red flags

42. Not only did Seawright and Alexander fail to independently confirm that the timber

and rights in question were real, they recklessly ignored numerous red flags.

43. The timber deeds and cutting agreements between landowners and Madison

Timber were fake. The landowners’ signatures, forged by Adams, often looked the same. A call to

any one of the hundreds of purported landowners, or a simple check of the title for any one of the

hundreds of purported tracts of land, would have confirmed the truth. Neither Seawright nor

Alexander, nor anyone at Baker Donelson, ever called a landowner or checked a tract’s title.

44. Madison Timber also had no real contracts with any mills. A call to any one of the

mills for which Madison Timber purported to have contracts would have confirmed the truth.

Neither Seawright nor Alexander, nor anyone at Baker Donelson, ever called a mill.

45. Adams required that an investor agree that he or she would not record the deed by

which Madison Timber purported to grant its own rights to the investor unless and until Madison

Timber failed to make a payment due under the promissory note. Seawright quipped that “I have

been clear that I am no timber expert”—but he is unquestionably a lawyer to whom his clients and

investors looked to evaluate the investment’s risks. Incredibly, notwithstanding the suspicious

“agreement not to record,” neither Seawright nor Alexander, nor anyone at Baker Donelson,

questioned this requirement.

46. The “profit” that Adams promised was 300% to 400% better than that payable by

any other fully asset-backed investment and was uniform and consistent. This fact should have

been a glaring warning sign but Alexander, who Baker Donelson presents as a qualified and


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13

experienced advisor, turned this warning sign into a selling point. Alexander bragged about a “six

year perfect track record” of consistent uniform returns under a “beautiful, albeit simple, financial

model.”

47. Adams purported to have identified mills with an insatiable demand for timber at

uniform prices. The market price for timber is readily available from multiple sources, and any one

of those sources would have confirmed that the market price for timber actually rises and falls,

sometimes dramatically, over short periods of time. Neither Seawright nor Alexander, nor anyone

at Baker Donelson, ever evaluated the investment in light of such information. To the contrary,

Seawright gloated that “[Adams] has stated that volume is not problem and indicates there are

enough opportunities for him to soak up as much capital as we can raise.”

48. In 2014, Adams decided that he did not want to have to manage Madison Timber

during the month of December. He told his “bird dogs,” including Seawright and Alexander, that

Madison Timber would not issue checks in December going forward; what had been a 12-month

payoff would become a 13-month payoff, skipping the last month of the year. Seawright blindly

passed on to investors the dubious explanation that mills shut down in December for OSHA

inspections:

In December 2014, we were notified that the mills intended to shut down operations in December to allow a break for the holidays and complete OSHA required inspections. With their operations down, they requested that no payment be made in December. The broker we worked with agreed to this, but on the condition that the interest rate is increased by 1%, which they agreed to. This increase is passed on to investors, so now all rounds pay out in 12 payments over 13 months, with a total interest of 13%. The result is the annual effective interest rate increased to 10.15%, so while the payments are stretched out by a month, the interest rate is better.

Neither Seawright nor Alexander, nor anyone at Baker Donelson, did anything to verify this false

information.


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14

Alexander Seawright Timber Fund II

49. In 2015, Seawright and Alexander 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 Seawright and Alexander would brainstorm a new model that could make Seawright and

Alexander 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?

50. 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.

51. Seawright and Alexander gave their new model a new company and named it

Alexander Seawright Timber Fund II, LLC. They made a pitchbook for prospective investors. As

always, in it they emphasized their affiliation with Baker Donelson:

Brent Alexander is a senior public policy advisor at Baker, Donelson, Bearman, Caldwell and Berkowitz (“Baker Donelson”) one of the nation’s largest law firms. He provides strategic business consulting for the firm’s clients and serves as a national recognized lobbyist both regionally and federally. . . . Jon Seawright is a senior shareholder at Baker Donelson and a member of the firm’s Board of Directors. Seawright has been deemed by peer-reviewed Super Lawyers as a Rising Star, as well as one of the nation’s top attorneys, and represents a range of national and regional clients, specializing in complex business transactions, mergers and acquisitions and taxation. . . .


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15

52. The 15-page pitchbook extolled the “elegant, simple and highly profitable” model

by which Seawright and Alexander had already “invest[ed] more than $20 million to facilitate the

purchase of over $50 million in timber.” The pitchbook falsely represented that an investment

would be “over-secured” and the timber would be “insured.” The pitchbook called the opportunity

to compound both principal and interest in the new fund “a nice trick indeed”:

Similar in almost all respects in operation to Alexander Seawright Timber Fund I, Alexander Seawright Timber Fund II will use a pool of dedicated funds to allow Alexander Seawright, not individual investors, the authority to systematically control the reinvestment of all of the returned principal and interest in each subsequent round of the fund. This will dramatically increase returns without increasing risk.

On a fully secured investment.

This is a nice trick indeed.

53. The feedback was not all good. One prospective investor observed that Seawright

and Alexander could count “the respect we have for Baker” “to the good”—but the investment

presented at least ten concrete concerns, the first of which he called the “John Grisham novel

problem”:

To the concerning . . .

1. The structure seems very difficult – bordering on uninvestable in its current form – for institutional managers, which is to say those managing money for others. Were this to go bad in any way, there’s a beginning to a John Grisham novel problem here: two lawyers drove up from Jackson, MS, to Memphis, TN, to pitch yield hungry investors on a double digit, nearly riskless opportunity. The opportunity was unaudited, and the lawyers did the tax work. . . .

But Alexander brushed off the criticism. (“I’m not sure he is a particularly artful or cogent writer,”

he told Seawright.)

54. The same prospective investor questioned why Seawright and Alexander

themselves were not invested in their own fund. “Your interest in the incentive is noteworthy, but,


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16

it is derived from sweat, not money you stand to lose,” he wrote. Alexander replied, “We do have

skin in the game, at least in the way we characterize it”:

We do have skin in the game, at least in the way we characterize it, in that we have fronted the expenses for the design, implementation, operation and management of Alexander Timber Fund I, with little direct compensation because we knew that if we were successful in building a track record, the opportunity to create a larger fund would follow. . . . [O]ur incentives under this model are perfectly aligned with our investors. If they don’t make money, we really don’t make money. That’s about the best we can do.

What Alexander’s reply did not acknowledge was the obvious: Investors stood to lose their own

money, but Seawright and Alexander did not.

55. The same prospective investor pressed Seawright and Alexander on the question of

“margin”—that is, how did their broker (Adams) guarantee such uniform and consistent profits?

He asked “what are we missing to understand here that a broker exists which [sic] such large

spreads/ margins?”:

Gents – in doing some research on this strategy, I spoke to a friend who is more familiar with timber. I described the model this opportunity works under, which was foreign to him. What he is used to seeing is the forester working as an agent of the landowner, where the forester is incented by receiving (if they are really good) 5-10% of the sales price. In this model, the forester markets the timber directly to the mills and, in some cases, literally opens the bids up in front of everyone. Both the concept of a broker and the 30ish % margins discussed seemed unfamiliar (and this is a very experienced guy).

Notwithstanding this meaningful input, neither Seawright nor Alexander, nor anyone at Baker

Donelson, did anything to slow things down, nor even made a cursory analysis of their and

Adams’s business.

56. Instead Seawright and Alexander speeded things up with more forceful

presentations. They now argued Alexander Seawright Timber Fund II, LLC was for investors

“with brains and balls.” Meanwhile they continued to invest other people’s money in Alexander

Seawright Timber Fund I, LLC.


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17

57. In late 2017, Seawright and Alexander finally secured a “key investor” to “seed”

Alexander Seawright Timber Fund II, LLC with $6 million. Alexander wanted $12 million to start

but figured he would raise the remaining $6 million by “bootstrapping.” Eventually he hoped “to

raise an additional $36 [million] over the life of the fund and let it roll for ten years.”

58. The “key investor” was a Baker Donelson client who would fund his investment

with the proceeds from the sale of a major asset. Seawright represented him in the sale. Alexander

told him, “I think you know us well enough to trust us, and if anything were ever go wrong, the

fund would simply unwind, at a profit.” He continued:

As you know, we are extremely confident in the model which is why we are investing and reinvesting our earnings along with you under the same conditions. Every deal has risk, but the only way that the numbers would be affected would be if we for some reason could not close the rounds on a monthly basis (and I am very confident we will). . . . The purchase from the timber owner and the sale to the mill are executed simultaneously Remember on the sale, we are over-secured by 50 percent. We put up half the money, but have rights to the entire tract of timber. So, that gives us a lot of margin to sell to someone else should there be a default. We have never experienced a default, but we have a lot of wiggle room should one occur. 59. Anticipating their launch, Seawright and Alexander opened a new bank account for

Alexander Seawright Timber Fund II, LLC. Alexander wrote Adams to advise that starting May 1,

2018, they would “start deploying at $1 million a month beginning May 1”:

[W]e have a signed commitment for $6 million that we plan to start deploying at $1 million a month beginning May 1. . . . [I]t is safe to assume that we will invest $1 million an month increasing to $1.5 million a month. . . . Also, this investment, which will be made under Alexander Seawright Timber Fund II, will be in addition to the on-going investment in Alexander Seawright Timber Fund I, so plan on an average of about $350,000 -$500,000 per month in Alexander Seawright Timber Fund I. We are excited about the opportunity to provide a regular, consistent and predictable volume of capital to your company and look forward to growing in cooperation with you over the next 5 years.


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18

60. Just days before Seawright and Alexander 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 Seawright and Alexander were

victims:

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.

CAUSES OF ACTION

61. Under the Bankruptcy Code, not every debtor is afforded a fresh start; that

opportunity is limited to the “honest but unfortunate debtor.” Grogan v. Garner, 498 U.S. 279, 287

(1991) (quoting Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)). In allowing for the

dischargeability of debt, Congress did not intend to favor “the interest in giving perpetrators of

fraud a fresh start over the interest in protecting victims of fraud.” Id. The Bankruptcy Code

therefore excepts certain debts from discharge in Section 523(a).

COUNT I

NON-DISCHARGEABILITY UNDER SECTION 523(a)(2)(A) FOR DEBTS OBTAINED BY FALSE PRETENSES,

FALSE REPRESENTATIONS, AND/OR ACTUAL FRAUD

62. The Receiver re-alleges each of the foregoing paragraphs as though stated fully

herein.

63. Section 523(a)(2)(A) of the Bankruptcy Code creates a rule of nondischargeability


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19

for any debt for money to the extent that it was obtained “by false pretenses, a false representation,

or actual fraud.” 11 U.S.C. § 523(a)(2)(A).

64. Seawright agreed to assist Adams in growing Madison Timber. Seawright pitched

Madison Timber to potential investors, including his clients; consummated sales of Madison

Timber to investors; and received commissions from Adams for his assistance in growing Madison

Timber’s business.

65. Madison Timber was a Ponzi scheme; therefore Seawright and Adams’s purpose

was unlawful.

66. In addition, Seawright acted unlawfully. Seawright was an unlicensed broker of

securities, in violation of federal and state law. The securities that Seawright sold were not exempt

from registration but were unregistered, in violation of federal and state law. Seawright made

material misstatements in the sales of securities, in violation of federal and state law.

67. Seawright knew his conduct was unlawful. He knew his unlicensed sales of

unregistered securities violated federal and state law. He knew he made false representations of

fact to encourage investments in Madison Timber.

68. Seawright and his law firm, Baker Donelson, were essential to the growth of the

Madison Timber Ponzi scheme. But for their encouragement and assistance, Madison Timber

would not have continuously grown—it would have failed before ensnaring hundreds of new

unwitting investors.

69. Seawright received “commissions,” fees, and other such payments paid by Adams

or Madison Timber for his assistance in growing Madison Timber’s business. Because Madison

Timber was a Ponzi scheme, the funds that Madison Timber transferred to Seawright were made

with the actual intent to hinder, delay, or defraud Madison Timber’s creditors. The Receiver is


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20

entitled to avoid all “commissions,” fees, and other such payments paid by Adams or Madison

Timber to Seawright.12

70. The Receiver has alleged claims against Seawright for civil conspiracy; aiding and

abetting; recklessness, gross negligence, and at a minimum negligence; violations of Mississippi’s


Organization Act; and joint venture liability.13

71. Madison Timber’s debts are now the Receivership Estate’s. Seawright contributed

to Madison Timber’s success over time, and therefore to the Receivership Estate’s liabilities today.

Seawright’s actions are a proximate cause of the debts of the Receivership Estate. Seawright is

therefore jointly and severally liable with other defendants for the debts of the Receivership

Estate.14 Because Seawright acted with reckless disregard of the wellbeing of others, and in

specific instances described in the Amended Complaint committed actual fraud, punitive damages

are appropriate.

72. Seawright’s indebtedness to the Receivership Estate, because it arises from

Seawright’s false pretenses, false representations, and/or actual fraud, is exempt from Seawright’s

Chapter 7 bankruptcy discharge.

12 See Amended Complaint, Exhibit A, at ¶¶ 159–163, Doc. 57, Alysson Mills v. Butler Snow, et al., 3:18-cv-866 (S.D. Miss.). 13 See generally Amended Complaint, Exhibit A, Doc. 57, Alysson Mills v. Butler Snow, et al., 3:18-cv-866 (S.D. Miss.). 14 See Amended Complaint, Exhibit A, at ¶¶ 123–136, 137–147, 173–178, Doc. 57, Alysson Mills v. Butler Snow, et al., 3:18-cv-866 (S.D. Miss.).


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21

COUNT II NON-DISCHARGEABILITY UNDER SECTION 523(a)(4)

FOR FRAUD OR DEFALCATION WHILE ACTING IN A FIDUCIARY CAPACITY


herein.

74. Section 523(a)(4) of the Bankruptcy Code creates a rule of nondischargeability for

any debt “for fraud or defalcation while acting in a fiduciary capacity.” 11 U.S.C. § 523(a)(4).

75. Seawright aided and abetted Adams in committing breaches of duties owed by

Adams to Madison Timber and in other tortious conduct alleged in this complaint and the amended

complaint in the ancillary action filed by the Receiver.

76. Seawright knew that Adams was manager of Madison Timber therefore Seawright

knew that Adams owed Madison Timber fiduciary duties of care. Mississippi law requires the

manager of a limited liability company to discharge his duties in good faith and with fair dealing,

with prudence, and in a manner that he reasonably believed was in the best interests of the

company.15 Nevertheless, Adams misused Madison Timber to sustain a singular fraud over many

years, and Seawright assisted him.16 See Matter of Cowin, 864 F.3d 344, 350 (5th Cir. 2017)

(“[T]he intent and actions of [the debtor’s] co-conspirators is sufficient to support

nondischargeability under § 523(a)(4).”).

77. Seawright and his company, Alexander Seawright, LLC, formed a joint venture

with Adams and Madison Timber. Seawright therefore owed a statutory duty to Adams and

Madison Timber to refrain from “engaging in grossly negligent or reckless conduct, intentional

misconduct, or a knowing violation of law.” MISS. CODE ANN. § 79-13-404(c).

15 MISS. CODE ANN. § 79-29-123(6)(a). 16 See Amended Complaint, Exhibit A, at ¶¶ 137–147, Doc. 57, Alysson Mills v. Butler Snow, et al., 3:18-cv-866 (S.D. Miss.).


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22

78. Seawright owed fiduciary duties to investors of Madison Timber. Seawright

specifically targeted individuals who had recently sold assets because Seawright knew those

individuals had money to invest. Such individuals included clients for whom Baker Donelson had

recently closed transactions. The Receiver is the assignee of many of these investors’ claims.

79. The Receiver has asserted claims against Seawright for civil conspiracy; aiding and

abetting; recklessness, gross negligence, and at a minimum negligence; violations of Mississippi’s


Organization Act; and joint venture liability.17



Seawright’s substantial assistance and encouragement is a proximate cause of the debts of the

Receivership Estate. Seawright is jointly and severally liable for the debts of the Receivership

Estate, which his substantial assistance and encouragement proximately caused. Because

Seawright acted with reckless disregard of the wellbeing of others, and in specific instances

described in this complaint committed actual fraud, punitive damages are appropriate.


Seawright’s fraud or defalcation while acting in a fiduciary capacity, is exempt from Seawright’s

Chapter 7 bankruptcy discharge.

17 See generally Amended Complaint, Exhibit A, Doc. 57, Alysson Mills v. Butler Snow, et al., 3:18-cv-866 (S.D. Miss.).


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23

COUNT III NON-DISCHARGEABILITY UNDER SECTION 523(a)(6)

FOR WILLFUL AND MALICIOUS INJURY BY THE DEBTOR TO ANOTHER ENTITY OR ITS PROPERTY


herein.

83. Section 523(a)(6) of the Bankruptcy Code creates a rule of nondischargeability for

any debt “for willful and malicious injury by the debtor to another entity or to the property of

another entity.” 11 U.S.C. § 523(a)(6).

84. An injury is “willful and malicious” when the court finds “either an objective

substantial certainty of harm or [the debtor’s] subjective motive to cause harm.” Berry v.

Vollbracht (In re Vollbracht), 276 F. App’x 360, 361 (5th Cir. 2007).

85. Adams misused Madison Timber to sustain a singular fraud over many years, and

Seawright assisted him by recruiting new investors to Madison Timber.

86. Numerous red flags notwithstanding,18 Seawright lent his influence, his professional

expertise, and even his clients to Adams. Seawright knew or should have known that Madison

Timber was a fraud. He lured innocent investors to Madison Timber anyway, collecting

commissions for each dollar of each investment he brought in.

87. The fraudulent scheme perpetrated by Adams, with Seawright’s assistance, created

“an objective substantial certainty of harm” to the Receivership Estate and the defrauded investors

of Madison Timber, who now hold claims against the Receivership Estate.

88. Madison Timber would not have grown without Seawright’s encouragement.

Seawright’s assistance to Adams in perpetuating the Madison Timber Ponzi scheme demonstrates

18 See Amended Complaint, Exhibit A, at ¶¶ 101–107, Doc. 57, Alysson Mills v. Butler Snow, et al., 3:18-cv-866 (S.D. Miss.).


Page 44 of 55


24

a “subjective motive to cause harm” to the Receivership Estate and to the defrauded investors of

Madison Timber.



Seawright’s substantial assistance and encouragement is a proximate cause of the debts of the

Receivership Estate. Seawright is jointly and severally liable for the debts of the Receivership

Estate, which his substantial assistance and encouragement proximately caused. Because

Seawright acted with reckless disregard of the wellbeing of others, and in specific instances

described in this complaint committed actual fraud, punitive damages are appropriate.


Seawright’s willful and malicious injury to another, is exempt from Seawright’s Chapter 7

bankruptcy discharge.

___________________

WHEREFORE, the Receiver respectfully requests that the Court:

1. determine that Seawright’s debt to the Receivership Estate is not dischargeable pursuant to 11 U.S.C. § 523;

2. award any and all attorney’s fees, costs, and interest allowed by contract or law; and

3. awarding any and all other relief as may be just and equitable.


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25

February 7, 2020



BROWN BASS & JETER, PLLC Lilli Evans Bass, Miss. Bar No. 102896 1755 Lelia Drive, Suite 400 Jackson, Mississippi 39216 Tel: 601-487-8448 Fax: 601-510-9934 [email protected] Receiver’s counsel


FISHMAN HAYGOOD, LLP Admission pro hac vice forthcoming Brent B. Barriere Kristen D. Amond Rebekka C. Veith 201 St. Charles Avenue, Suite 4600 New Orleans, Louisiana 70170 Tel: 504-586-5253 Fax: 504-586-5250 [email protected] [email protected] [email protected] Receiver’s counsel


Page 46 of 55


Chapter 7 Voluntary Petition Bankruptcy Case No. 19-03921-NPO

Bk. Dkt. #1

Page 47 of 55


Fill in this information to identify your case:

United States Bankruptcy Court for the:

SOUTHERN DISTRICT OF MISSISSIPPI

Case number (if known) Chapter you are filing under:

� Chapter 7

� Chapter 11

� Chapter 12

� Chapter 13 � Check if this is anamended filing

Official Form 101Voluntary Petition for Individuals Filing for Bankruptcy 12/17The bankruptcy forms use you and Debtor 1 to refer to a debtor filing alone. A married couple may file a bankruptcy case together—called a jointcase—and in joint cases, these forms use you to ask for information from both debtors. For example, if a form asks, “Do you own a car,” the answerwould be yes if either debtor owns a car. When information is needed about the spouses separately, the form uses Debtor 1 and Debtor 2 to distinguishbetween them. In joint cases, one of the spouses must report information as Debtor 1 and the other as Debtor 2. The same person must be Debtor 1 inall of the forms.

Be as complete and accurate as possible. If two married people are filing together, both are equally responsible for supplying correct information. Ifmore space is needed, attach a separate sheet to this form. On the top of any additional pages, write your name and case number (if known). Answerevery question.

Part 1: Identify Yourself

About Debtor 1: About Debtor 2 (Spouse Only in a Joint Case):

1. Your full name

Write the name that is onyour government-issuedpicture identification (forexample, your driver'slicense or passport).

Bring your pictureidentification to yourmeeting with the trustee.

JonFirst name First name

DarrellMiddle name Middle name

SeawrightLast name and Suffix (Sr., Jr., II, III) Last name and Suffix (Sr., Jr., II, III)

2. All other names you haveused in the last 8 yearsInclude your married ormaiden names.

3. Only the last 4 digits ofyour Social Securitynumber or federalIndividual TaxpayerIdentification number(ITIN)

xxx-xx-3273

Official Form 101 Voluntary Petition for Individuals Filing for Bankruptcy page 1


Page 48 of 55


Debtor 1 Jon Darrell Seawright Case number (if known)

About Debtor 1: About Debtor 2 (Spouse Only in a Joint Case):

4. Any business names andEmployer IdentificationNumbers (EIN) you haveused in the last 8 years

� I have not used any business name or EINs. � I have not used any business name or EINs.

Include trade names anddoing business as names

Business name(s) Business name(s)

EINs EINs

5. Where you live If Debtor 2 lives at a different address:

4247 Crane BoulevardJackson, MS 39216Number, Street, City, State & ZIP Code Number, Street, City, State & ZIP Code

HindsCounty County

If your mailing address is different from the oneabove, fill it in here. Note that the court will send anynotices to you at this mailing address.

If Debtor 2's mailing address is different from yours, fill itin here. Note that the court will send any notices to thismailing address.

Number, P.O. Box, Street, City, State & ZIP Code Number, P.O. Box, Street, City, State & ZIP Code

6. Why you are choosingthis district to file forbankruptcy

Check one:

� Over the last 180 days before filing this petition,I have lived in this district longer than in anyother district.

� I have another reason.Explain. (See 28 U.S.C. § 1408.)

Check one:

� Over the last 180 days before filing this petition, Ihave lived in this district longer than in any otherdistrict.

� I have another reason.Explain. (See 28 U.S.C. § 1408.)



Page 49 of 55



Part 2: Tell the Court About Your Bankruptcy Case

7. The chapter of theBankruptcy Code you arechoosing to file under

Check one. (For a brief description of each, see Notice Required by 11 U.S.C. § 342(b) for Individuals Filing for Bankruptcy(Form 2010)). Also, go to the top of page 1 and check the appropriate box.

� Chapter 7

� Chapter 11

� Chapter 12

� Chapter 13

8. How you will pay the fee � I will pay the entire fee when I file my petition. Please check with the clerk’s office in your local court for more detailsabout how you may pay. Typically, if you are paying the fee yourself, you may pay with cash, cashier’s check, or moneyorder. If your attorney is submitting your payment on your behalf, your attorney may pay with a credit card or check witha pre-printed address.

� I need to pay the fee in installments. If you choose this option, sign and attach the Application for Individuals to PayThe Filing Fee in Installments (Official Form 103A).

� I request that my fee be waived (You may request this option only if you are filing for Chapter 7. By law, a judge may,but is not required to, waive your fee, and may do so only if your income is less than 150% of the official poverty line thatapplies to your family size and you are unable to pay the fee in installments). If you choose this option, you must fill outthe Application to Have the Chapter 7 Filing Fee Waived (Official Form 103B) and file it with your petition.

9. Have you filed forbankruptcy within thelast 8 years?

� No.

� Yes.

District When Case number



10. Are any bankruptcycases pending or beingfiled by a spouse who isnot filing this case withyou, or by a businesspartner, or by anaffiliate?

� No

� Yes.

Debtor Relationship to you

District When Case number, if known

Debtor Relationship to you

District When Case number, if known

11. Do you rent yourresidence?

� No. Go to line 12.

� Yes. Has your landlord obtained an eviction judgment against you?

� No. Go to line 12.

� Yes. Fill out Initial Statement About an Eviction Judgment Against You (Form 101A) and file it as part ofthis bankruptcy petition.



Page 50 of 55



Part 3: Report About Any Businesses You Own as a Sole Proprietor

12. Are you a sole proprietorof any full- or part-timebusiness?

� No. Go to Part 4.

� Yes. Name and location of business

A sole proprietorship is abusiness you operate asan individual, and is not aseparate legal entity suchas a corporation,partnership, or LLC.

Name of business, if any

If you have more than onesole proprietorship, use aseparate sheet and attachit to this petition.

Number, Street, City, State & ZIP Code

Check the appropriate box to describe your business:

� Health Care Business (as defined in 11 U.S.C. § 101(27A))

� Single Asset Real Estate (as defined in 11 U.S.C. § 101(51B))

� Stockbroker (as defined in 11 U.S.C. § 101(53A))

� Commodity Broker (as defined in 11 U.S.C. § 101(6))

� None of the above

13. Are you filing underChapter 11 of theBankruptcy Code and areyou a small businessdebtor?

If you are filing under Chapter 11, the court must know whether you are a small business debtor so that it can set appropriatedeadlines. If you indicate that you are a small business debtor, you must attach your most recent balance sheet, statement ofoperations, cash-flow statement, and federal income tax return or if any of these documents do not exist, follow the procedurein 11 U.S.C. 1116(1)(B).

For a definition of smallbusiness debtor, see 11U.S.C. § 101(51D).

� No. I am not filing under Chapter 11.

� No. I am filing under Chapter 11, but I am NOT a small business debtor according to the definition in the BankruptcyCode.

� Yes. I am filing under Chapter 11 and I am a small business debtor according to the definition in the Bankruptcy Code.

Part 4: Report if You Own or Have Any Hazardous Property or Any Property That Needs Immediate Attention

14. Do you own or have anyproperty that poses or isalleged to pose a threatof imminent andidentifiable hazard topublic health or safety?Or do you own anyproperty that needsimmediate attention?

� No.

� Yes.What is the hazard?

If immediate attention isneeded, why is it needed?

For example, do you ownperishable goods, orlivestock that must be fed,or a building that needsurgent repairs?

Where is the property?

Number, Street, City, State & Zip Code



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Part 5: Explain Your Efforts to Receive a Briefing About Credit Counseling

About Debtor 1: About Debtor 2 (Spouse Only in a Joint Case):15. Tell the court whether

you have received abriefing about creditcounseling.

The law requires that youreceive a briefing aboutcredit counseling beforeyou file for bankruptcy.You must truthfully checkone of the followingchoices. If you cannot doso, you are not eligible tofile.

If you file anyway, the courtcan dismiss your case, youwill lose whatever filing feeyou paid, and yourcreditors can begincollection activities again.

You must check one: You must check one:

� I received a briefing from an approved creditcounseling agency within the 180 days before Ifiled this bankruptcy petition, and I received acertificate of completion.

Attach a copy of the certificate and the paymentplan, if any, that you developed with the agency.

� I received a briefing from an approved creditcounseling agency within the 180 days before I filedthis bankruptcy petition, and I received a certificate ofcompletion.

Attach a copy of the certificate and the payment plan, ifany, that you developed with the agency.

� I received a briefing from an approved creditcounseling agency within the 180 days before Ifiled this bankruptcy petition, but I do not havea certificate of completion.

Within 14 days after you file this bankruptcypetition, you MUST file a copy of the certificate andpayment plan, if any.

� I received a briefing from an approved creditcounseling agency within the 180 days before I filedthis bankruptcy petition, but I do not have a certificateof completion.

Within 14 days after you file this bankruptcy petition, youMUST file a copy of the certificate and payment plan, ifany.

� I certify that I asked for credit counselingservices from an approved agency, but wasunable to obtain those services during the 7days after I made my request, and exigentcircumstances merit a 30-day temporary waiverof the requirement.

To ask for a 30-day temporary waiver of therequirement, attach a separate sheet explainingwhat efforts you made to obtain the briefing, whyyou were unable to obtain it before you filed forbankruptcy, and what exigent circumstancesrequired you to file this case.

Your case may be dismissed if the court isdissatisfied with your reasons for not receiving abriefing before you filed for bankruptcy.If the court is satisfied with your reasons, you muststill receive a briefing within 30 days after you file.You must file a certificate from the approvedagency, along with a copy of the payment plan youdeveloped, if any. If you do not do so, your casemay be dismissed.

Any extension of the 30-day deadline is grantedonly for cause and is limited to a maximum of 15days.

� I certify that I asked for credit counseling servicesfrom an approved agency, but was unable to obtainthose services during the 7 days after I made myrequest, and exigent circumstances merit a 30-daytemporary waiver of the requirement.

To ask for a 30-day temporary waiver of the requirement,attach a separate sheet explaining what efforts you madeto obtain the briefing, why you were unable to obtain itbefore you filed for bankruptcy, and what exigentcircumstances required you to file this case.

Your case may be dismissed if the court is dissatisfiedwith your reasons for not receiving a briefing before youfiled for bankruptcy.

If the court is satisfied with your reasons, you must stillreceive a briefing within 30 days after you file. You mustfile a certificate from the approved agency, along with acopy of the payment plan you developed, if any. If you donot do so, your case may be dismissed.

Any extension of the 30-day deadline is granted only forcause and is limited to a maximum of 15 days.

� I am not required to receive a briefing aboutcredit counseling because of:

� I am not required to receive a briefing about creditcounseling because of:

� Incapacity.I have a mental illness or a mental deficiencythat makes me incapable of realizing ormaking rational decisions about finances.

� Incapacity.I have a mental illness or a mental deficiency thatmakes me incapable of realizing or making rationaldecisions about finances.

� Disability.My physical disability causes me to beunable to participate in a briefing in person,by phone, or through the internet, even after Ireasonably tried to do so.

� Disability.My physical disability causes me to be unable toparticipate in a briefing in person, by phone, orthrough the internet, even after I reasonably tried todo so.

� Active duty.I am currently on active military duty in amilitary combat zone.

� Active duty.I am currently on active military duty in a militarycombat zone.

If you believe you are not required to receive abriefing about credit counseling, you must file amotion for waiver credit counseling with the court.

If you believe you are not required to receive a briefingabout credit counseling, you must file a motion for waiverof credit counseling with the court.



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Part 6: Answer These Questions for Reporting Purposes

16. What kind of debts doyou have?

16a. Are your debts primarily consumer debts? Consumer debts are defined in 11 U.S.C. § 101(8) as “incurred by anindividual primarily for a personal, family, or household purpose.”

� No. Go to line 16b.

� Yes. Go to line 17.

16b. Are your debts primarily business debts? Business debts are debts that you incurred to obtainmoney for a business or investment or through the operation of the business or investment.

� No. Go to line 16c.

� Yes. Go to line 17.

16c. State the type of debts you owe that are not consumer debts or business debts

17. Are you filing underChapter 7?

� No. I am not filing under Chapter 7. Go to line 18.

Do you estimate thatafter any exemptproperty is excluded andadministrative expensesare paid that funds willbe available fordistribution to unsecuredcreditors?

� Yes. I am filing under Chapter 7. Do you estimate that after any exempt property is excluded and administrative expensesare paid that funds will be available to distribute to unsecured creditors?

� No

� Yes

18. How many Creditors doyou estimate that youowe?

� 1-49� 50-99� 100-199� 200-999

� 1,000-5,000� 5001-10,000� 10,001-25,000

� 25,001-50,000� 50,001-100,000� More than100,000

19. How much do youestimate your assets tobe worth?

� $0 - $50,000� $50,001 - $100,000� $100,001 - $500,000� $500,001 - $1 million

� $1,000,001 - $10 million� $10,000,001 - $50 million� $50,000,001 - $100 million� $100,000,001 - $500 million

� $500,000,001 - $1 billion� $1,000,000,001 - $10 billion� $10,000,000,001 - $50 billion� More than $50 billion

20. How much do youestimate your liabilitiesto be?

� $0 - $50,000� $50,001 - $100,000� $100,001 - $500,000� $500,001 - $1 million

� $1,000,001 - $10 million� $10,000,001 - $50 million� $50,000,001 - $100 million� $100,000,001 - $500 million

� $500,000,001 - $1 billion� $1,000,000,001 - $10 billion� $10,000,000,001 - $50 billion� More than $50 billion

Part 7: Sign Below

For you I have examined this petition, and I declare under penalty of perjury that the information provided is true and correct.

If I have chosen to file under Chapter 7, I am aware that I may proceed, if eligible, under Chapter 7, 11,12, or 13 of title 11,United States Code. I understand the relief available under each chapter, and I choose to proceed under Chapter 7.

If no attorney represents me and I did not pay or agree to pay someone who is not an attorney to help me fill out thisdocument, I have obtained and read the notice required by 11 U.S.C. § 342(b).

I request relief in accordance with the chapter of title 11, United States Code, specified in this petition.

I understand making a false statement, concealing property, or obtaining money or property by fraud in connection with abankruptcy case can result in fines up to $250,000, or imprisonment for up to 20 years, or both. 18 U.S.C. §§ 152, 1341, 1519,and 3571./s/ Jon Darrell SeawrightJon Darrell Seawright Signature of Debtor 2Signature of Debtor 1

Executed on November 3, 2019 Executed onMM / DD / YYYY MM / DD / YYYY



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For your attorney, if you arerepresented by one

If you are not represented byan attorney, you do not needto file this page.

I, the attorney for the debtor(s) named in this petition, declare that I have informed the debtor(s) about eligibility to proceedunder Chapter 7, 11, 12, or 13 of title 11, United States Code, and have explained the relief available under each chapterfor which the person is eligible. I also certify that I have delivered to the debtor(s) the notice required by 11 U.S.C. § 342(b)and, in a case in which § 707(b)(4)(D) applies, certify that I have no knowledge after an inquiry that the information in theschedules filed with the petition is incorrect.

/s/ R. Michael Bolen Miss. Bar Date November 3, 2019Signature of Attorney for Debtor MM / DD / YYYY

R. Michael Bolen Miss. Bar 3615Printed name

Hood & Bolen, PLLCFirm name

Attorneys at Law3770 Highway 80 WestJackson, MS 39209Number, Street, City, State & ZIP Code

Contact phone (601)923-0788 Email address [email protected]. Bar 3615 MSBar number & State



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United States Bankruptcy CourtSouthern District of Mississippi

In re Jon Darrell Seawright Case No.Debtor(s) Chapter 7

VERIFICATION OF CREDITOR MATRIX

The above-named Debtor hereby verifies that the attached list of creditors is true and correct to the best of his/her knowledge.

Date: November 3, 2019 /s/ Jon Darrell SeawrightJon Darrell SeawrightSignature of Debtor

Software Copyright (c) 1996-2019 Best Case, LLC - www.bestcase.com Best Case Bankruptcy


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20-00011-npo dkt 24 filed 03/16/20 entered 03/16/20 12:33 ... · 16/03/2020 · 20-00011-npo dkt...

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