Investors seeking claims in an alleged Ponzi scheme involving former Chattanooga businessman John J. Woods will receive an initial payout of $18 million, a judge ruled Tuesday.
But the payout is only about a quarter of the $70 million in claims filed by investors who federal regulators alleged were defrauded by Woods’ scheme.
U.S. District Court Judge Steven D. Grimberg of Atlanta, following a Zoom hearing, agreed with a request by the case’s receiver for the initial distribution to investors.
A. Cotton Wright, the court-appointed receiver who has been selling off the assets of an investment fund Woods used to allegedly bilk investors, said during the hearing that she expects two more distributions, though the one approved Tuesday likely will be the biggest.
“This would be the largest distribution of the bunch,” she said.
She said another distribution to investors could come in late spring or early summer. Wright said a third distribution could be carried out in early 2024. She said there is about $19 million in the receivership account.
According to the U.S. Securities and Exchange Commission, Woods collected more than $110 million from investors with promises of 6-7% rates of return. But the commission said in August 2021 that the investments in the fund, Horizon Private Equity III, were “worth far too little for there to be any realistic prospect that the Ponzi scheme will be able to pay back existing investors their principal, let alone the promised…