Updates on First Liberty Investigation: Asset Auction and Controversial Motion at Bay Point

S. Gregory Hayes, the Receiver appointed by the court to oversee the investigation into First Liberty Building and Loan and Edwin Brant Frost IV, has submitted a request to auction off assets tied to the defendants amid ongoing claims of fraudulent practices and Ponzi schemes at First Liberty. The Securities and Exchange Commission (SEC) has been actively investigating these allegations at the Newnan-based non-bank lending firm.

The proposal includes employing Bullseye Auction & Appraisal LLC to appraise and auction off the assets on behalf of the Receivership Estate. Bullseye, which is bonded for $100,000, is well-equipped to handle the liquidation of these assets.

Among the assets currently controlled by the Receiver are First Liberty’s office space in Newnan and several vehicles like the 2006 Aston Martin DB5 and various Range Rover models, alongside other personal items held by Frost and his family. Bullseye would collect fees and commissions for each asset sold, with priorities set for covering costs and paying off valid liens before any leftover proceeds go back to the Receivership.

A significant deal emerged separately from the auction motion, as Bay Point Capital, a private real estate investment entity, filed a motion to intervene in the Receivership on Sept. 30. They aim to manage and collect on three specific loans held within First Liberty: the Cancer Care Loan (CCL), Full Circle Loan, and Stone Capital Loan (SC1).

The Receiver contests this motion, concerned that granting Bay Point control of their investments could obstruct the investigation and disadvantage other impacted investors. Part of First Liberty’s wrongdoing involved mingling investor funds, making it challenging to separate Bay Point’s contributions from others’. Moreover, loan integrity and recovery could be called into question, potentially complicating the resolution process for all parties involved.

While Bay Point’s losses are substantial, the Receiver argues that other investors, including those who lost substantial sums of money, would be placed at a disadvantage if Bay Point’s request were granted due to their financial position. For the sake of the overarching investigation and all stakeholders in the Receivership, the Receiver has appealed to the Court to dismiss Bay Point’s intervention motion.