UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-21964-CIV-ALTONAGA/Goodman 

SECURITIES AND EXCHANGE 

COMMISSION, 

 

Plaintiff,

v. 

TCA FUND MANAGEMENT 

GROUP CORP.; et al., 

Defendants.

________________________________/ 

ORDER 

THIS CAUSE is before the Court on Receiver, Jonathan E. Perlman’s Motion for 

Approval of Creditor Distribution Plan and First Interim Distribution to Creditors [ECF No. 294], 

filed on August 22, 2022. In an August 25, 2022 Order [ECF No. 295], the Court instructed the 

Receiver to publish the Motion and issued a September 26, 2022 deadline for creditors to file 

responses. (See id. 2–3). Creditors AW Exports Pty Ltd, Warwick Broxom, and Jonathan James 

Kaufman (the “Kaufman Creditors”) filed the only Response [ECF No. 302] on September 26, 

2022. The Receiver filed a Reply [ECF No. 306] on October 3, 2022. Being fully informed of the 

relevant arguments, the underlying facts, and the applicable law, the Motion is granted. 

I. BACKGROUND

This case dates to May 11, 2020, when the SEC’s years’-long investigation into 

Defendants, TCA Fund Management Growth Corp. and TCA Global Credit Fund GP, Ltd.’s

fraudulent revenue recognition practices culminated in this suit. The Complaint [ECF No. 1] 

alleged that Defendants had been reporting deceitfully high returns to investors, who were taking 

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on heavy losses. (See id. ¶¶ 32–33, 39–41, 43–46). That same day, the Court froze Defendants, 

TCA Global Credit Fund, LP, TCA Global Credit Fund, Ltd., and TCA Global Credit Master Fund, 

LP’s (the “Receivership Entities[’]”) assets in constructive trust and appointed the Receiver to

begin the tricky business of sorting out claims against the Receivership Entities — the value of 

which far exceeded the cash on hand. (See generally May 11, 2020 Order [ECF No. 5]). Both 

investors and creditors had claims against the Receivership Entities.

Over time, the Receiver grew the Receivership Entities’ cash holdings from $287,683 to 

$67,008,922. (See Aug. 4, 2022 Order [ECF No. 284] 10).1 These gains were the product of 

“successful recoveries of monies, sale of non-cash assets, as well as institution and resolution of 

litigation matters.” (Id. (citation and quotation marks omitted)). Having amassed sufficient funds 

to begin repaying defrauded investors, the Receiver developed a Proposed Distribution Plan, which 

called for investors to be reimbursed on a pro rata, rising tide2 basis. (See id. 11–12). The Court 

directed the Receiver to publish the plan and gave investors and creditors alike 60 days to file 

responses or objections. (See id. 1). 

One of the objections to the Proposed Distribution Plain came from the Kaufman Creditors. 

(See id. 33–34). The Kaufman Creditors represent a group of 27 trade creditors who had won a 

judgment against Feeder Fund LP — one of the Receivership Entities — in an Australian court. 

1 The Court uses the pagination generated by the electronic CM/ECF database, which appears in the headers 

of all court filings.

2 A “rising tide” reimbursement scheme involves making initial interim distributions to investors who have 

yet to recover much, if any, of their investment. (See Aug. 4, 2022 Order 27–28). To illustrate, suppose a 

bank has swindled 12 investors. One investor has already recovered 80 percent of her net investment, a 

second has recovered 30 percent, and the remaining 10 have yet to recover anything. Under the rising tide 

model, the first interim distribution would catch the bottom 10 investors up to the second investor, rather 

than distributing the funds on a pro rata basis to all 12. That way, everyone would have recovered at least 

30 percent of their investment after the first interim distribution. Future interim distributions would aim to 

catch the bottom 11 investors up to the first investor, with the eventual goal of getting everyone back to 

100% percent. (See id. 28).

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(See id.). They valued their claims “somewhere between $2 million and $3 million.” (Id. 33 

(citation omitted)). Unlike some of the investors who objected to the Receiver’s Proposed 

Distribution Plan (see, e.g., id. 13–30), the Kaufman Creditors voiced no issue with the structure 

of the Proposed Distribution Plan per se (see id. 33–34). Rather, they lamented that the Receiver 

had embarked on a project to reimburse investors without first developing “a dispute resolution 

process for the timely resolution of any disputed [creditor] claims.” (Id. 33 (alteration added; 

citation and quotation marks omitted)).

On July 11, 2022, the Court held a hearing at which objectors could voice their opposition 

to the Proposed Distribution Plan. (See id. 2). At the hearing, the Receiver and the Kaufman 

Creditors agreed to a 30-day timeline, during which the Receiver would “produce a dispute 

resolution process[.]” (Id. 34 (alteration added)). This rendered moot the Kaufman Creditors’ 

objection.

On August 4, 2022, the Court approved the Receiver’s plan in part, authorizing a first 

interim distribution of $55,452,651 to the 764 investors who had yet to recover at least 23.05

percent of their investment.3 (See id. 12, 34). Shortly thereafter, the Receiver filed his Motion, 

which identifies 27 known unsecured creditor claims valued at $2,207,235. (See Mot. ¶ 4). The 

Receiver also proposes a Creditor Distribution Plan that deems to reimburse creditors in a manner 

similar to the pro rata, rising tide scheme of the Proposed Distribution Plan. (See id. ¶ 16).

A. Creditor Distribution Plan Structure

To start, the Creditor Distribution Plan would set in motion a timeline for the resolution of 

creditors’ claims against the Receivership Entities. (See id. ¶ 5). Starting on the date the Court 

3 The August 4, 2022 Order authorized the $55,452,651 first interim distribution, but the Court has since

stayed the Order pending certain investors’ interlocutory appeal to the U.S. Court of Appeals for the 

Eleventh Circuit. (See Sept. 2, 2022 Order [ECF No. 299]; Notice of Appeal [ECF No. 307]). No funds 

have yet been distributed to investors, nor will they until the appeal is concluded.

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grants the Motion (the “Approval Date”), creditors would have 60 days to file their claims. (See 

id.). The Receiver proposes to give creditors notice of this 60-day deadline (the “Claims Bar Date”) 

by publishing it in the Sun Sentinel and Wall Street Journal within 10 days of the Approval Date. 

(See id.). He also would notify known creditors by mailing information about the Creditor 

Distribution Plan, including the Claims Bar Date, to each known creditor’s last known address. 

(See id.). As the name “Claims Bar Date” suggests, creditors would be barred from filing claims 

once the 60 days lapse. (See id.).

After the Claims Bar Date, the Receiver would have 45 days to “negotiate with claimants 

regarding any disputed claims and attempt to settle all such claims.” (Id. ¶ 6). During this 

negotiation period, the Receiver would file a status report with the Court, providing a “list of 

allowed creditor claims[.]” (Id. (alteration added)). He would also give notice to any potential 

creditors who had reached out regarding a claim via mail and email. (See id.). Thirty days after 

notice, creditors would be able to file objections to the Receiver’s findings with the Court (see id. 

¶ 7), which would initiate another 30-day period of negotiations (see id. ¶ 8). If a creditor and the 

Receiver were unable to come to an agreement regarding the value of a claim during this period, 

the Court would hold an evidentiary hearing to adjudicate any lingering disputes. (See id.).

Once claims have been resolved, the Receiver proposes situating creditors on equal footing 

with investors, rather than paying all claims at once. Specifically, the Creditor Distribution Plan 

would have the Receiver make “a first interim distribution to creditors of 23.05% of each creditor’s 

allowed claim” — the same percentage that the bottom 764 investors are set to receive under the 

August 4, 2022 Order. (Id. ¶ 16). Creditors would then share in future distributions “at the same 

percentage recovery as investors.” (Id.).

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B. The Kaufman Creditors’ Response

The Kaufman Creditors challenge the Creditor Distribution Plan’s structure and timeline

as it relates to known creditor claims.

4

 (See generally Resp.). They insist that known creditor 

claims should be subject to an expedited, 30-day resolution period, during which the Receiver 

should identify and pay undisputed claims and work to settle disputed claims. (See id. 12). If any 

creditor claims remain unsettled after 30 days, the Kaufman Creditors propose bringing the matter 

back “to the Court’s attention” for further resolution. (Id.). 

II. LEGAL STANDARD

District courts have “broad powers and wide discretion to determine relief in an equity 

receivership.” S.E.C. v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 1992) (citations omitted). That 

discretion “derives from the inherent powers of an equity court to fashion relief.” Id. (citation 

omitted). Consequently, any “action by a trial court in supervising an equity receivership is 

committed to [her] sound discretion and will not be disturbed unless there is a clear showing of 

abuse.” Bendall v. Lancer Mgmt. Grp., L.L.C., 523 F. App’x 554, 557 (11th Cir. 2013) (alteration 

added; citations and quotation marks omitted).

In receivership cases, courts need only determine that a proposed distribution plan is “fair 

and reasonable” under the circumstances. C.F.T.C. v. Walsh, 712 F.3d 735, 754 (2d Cir. 2013); 

see also S.E.C. v. Wang, 944 F.2d 80, 85 (2d Cir. 1991). The plan must be crafted “equitably and 

fairly, with similarly-situated investors or customers treated alike.” S.E.C. v. Credit Bancorp, Ltd., 

99-cv-11395, 2000 WL 1752979, at *13 (S.D.N.Y. Nov. 29, 2000), aff’d, 290 F.3d 80 (2d Cir. 

2002). As the Supreme Court has long recognized, “equality is equity[.]” Cunningham v. Brown, 

265 U.S. 1, 13 (1924) (alteration added).

4 The Kaufman Creditors have no objection to the Creditor Distribution Plan as it relates to presently 

unknown creditor claims. (See Resp. 12).

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III. DISCUSSION

The Kaufman Creditors object to the Creditor Distribution Plan’s proposed timeline for 

resolution of known claims, as well as its structure, which places creditors on equal footing with 

investors. The Court will address these arguments, but it must first consider the preliminary issue 

of whether the Receiver’s proposal satisfies due process. 

A. Due Process

Before approving an equity receiver’s proposal for resolving creditor claims against the 

receivership estate, the Court must take care to ensure that the proposal affords creditors “due 

process of law” and “adequately protect[s] their property.” Elliott, 953 F.2d at 1566 (alteration 

added). In this context, “[d]ue process requires notice and an opportunity to be heard.” Id. 

(alteration added; citations omitted). The Receiver’s proposal accomplishes both here.

The Creditor Distribution Plan satisfies the “notice” prong because it proposes a 60-day 

window for creditors to submit claims, during which time the Receiver will notify prospective 

creditors by publishing the details of the plan and the Claims Bar Date in the Sun Sentinel and Wall 

Street Journal, as well as by mailing the aforementioned information to each known creditor’s lastknown address. (See Mot. ¶¶ 5, 9, 11). Other courts have consistently found that this one-two 

punch of publication and notice-by-mail affords creditors adequate notice of the claims process in 

equity receivership cases. See, e.g., S.E.C. v. Path Am., L.L.C., No. 15-1350, 2016 WL 4528459, 

at *3, 6 (W.D. Wash. Aug. 30, 2016); Firestone Commc’ns, Inc. v. Q Television Network Inc., No. 

4:05-cv-766, 2009 WL 2949766, at *4 (N.D. Tex. Sept. 14, 2009); S.E.C. v. Alanar, Inc., No. 1:05-

cv-01102, 2009 WL 1664443, at *3–4 (S.D. Ind. June 12, 2009). The Court agrees that this 

approach suffices here.

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Turning to the second prong — “an opportunity to be heard[,]” Elliott, 953 F.2d at 1566 

(alteration added) — the Creditor Distribution Plan again passes muster. The Receiver proposes a 

window of 45 days after the Claims Bar Date for negotiation with creditors; an additional 30 days 

for the creditors to file objections; and finally, an opportunity for an evidentiary hearing with the 

Court if any factual disputes persist. (See Mot. ¶¶ 6–8). The promise of an evidentiary hearing 

affords creditors ample opportunity to make their case before the Court, should their negotiations 

with the Receiver reach an impasse. That is adequate. See Elliott, 953 F.2d at 1567 (“[A] district 

court does not generally abuse its discretion if its summary procedures permit parties to present 

evidence when the facts are in dispute and to make arguments regarding those facts.” (alteration 

added)). 

The Court is satisfied that the Creditor Distribution Plan does not offend prospective 

creditors’ due process rights. It thus turns to the Kaufman Creditors’ objections. 

B. Objections

The Kaufman Creditors voice no objection to the Creditor Distribution Plan’s timeline as 

it concerns creditors who have yet to be identified. (See Resp. 12). They ask only that the Court 

order a second, expedited timeline for those creditors that — like themselves — are already known 

to the Receiver and the Court. (See id.). According to the Kaufman Creditors, this expedited 

timeline should be set for 30 days, after which the Receiver should first file a motion “seeking 

authorization for the immediate payout of all undisputed amounts” and then “bring the matter to 

the Court’s attention within another 30 days” if any disputes persist. (Id.). 

This objection breaks neatly into two sub-issues. The first is whether the Court should 

reject the Receiver’s proposed model of pro rata, rising tide distributions in favor of the immediate 

and full payout that the Kaufman Creditors advocate. The second is whether the Court should adopt 

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an expedited timeline for the resolution of known creditor claims, separate from the lengthier-butunchallenged timeline that the Creditor Distribution Plan proposes for unknown creditor claims. 

The Court addresses the two in turn. 

1. Rising Tide 

To begin, the Court notes that this is an equity receivership case, not a bankruptcy. 

Certainly, there are cases in which courts fashioning relief in the equity receivership context find 

“bankruptcy law . . . analogous and instructive[.]” S.E.C. v. Wells Fargo Bank, N.A., 848 F.3d 

1339, 1344 (11th Cir. 2017) (alterations added). But the two bodies of law are distinct in that one 

must acquiesce to the bankruptcy code, while the other serves equity alone. See Liberte Capital 

Grp., L.L.C. v. Capwill, 462 F.3d 543, 551 (6th Cir. 2006) (distinguishing between bankruptcy 

receiverships, for which “Congress has spoken by setting forth broad and detailed statutes to guide 

federal courts[,]” and equity receiverships, which “fall outside the statutory bankruptcy 

proceedings” and are instead governed by “the traditional, common law powers of equity” 

(alteration added)). Accordingly, bankruptcy law, while occasionally helpful in equity receivership 

cases, does not control here. See C.F.T.C. v. Eustace, No. 05-cv-2973, 2008 WL 471574, at *7 

(E.D. Pa. Feb. 19, 2008). Indeed, courts overseeing equity receiverships treat “case law concerning 

equity receiverships” as “generally more applicable than bankruptcy case law.” Id. (citation 

omitted).

Here, the Creditor Distribution Plan deems to treat creditors the same as the defrauded

investors. (See Mot. ¶ 16). That means that after the first distribution, each creditor would have 

recovered at least 23.05 percent of its respective debts. (See id.). Creditors would then participate 

in future distributions on equal footing with the investors. (See id.). 

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The Kaufman Creditors never challenges rising tide as an equitable means of distributing 

receivership assets (see generally Resp.), nor could they. As the Court recognized in the August 4, 

2022 Order, rising tide “is ‘the method most commonly used (and judicially approved) for 

apportioning receivership assets.’” (Aug. 4, 2022 Order 28 (quoting S.E.C. v. Huber, 702 F.3d 903, 

906 (7th Cir. 2012))). The question here is not whether equity allows for a rising tide distribution 

plan similar to the one approved in the August 4, 2022 Order, but rather whether it compels

preferential treatment for the Kaufman Creditors because they are creditors.

The Kaufman Creditors’ argument that it does begins with the bankruptcy code, which 

instructs that creditors must be “paid in full before any funds can be returned to a bankrupt entity 

for the benefit of the entity’s shareholder or []members.” (Resp. 6 (alteration added; citing 11 

U.S.C. § 507(a); footnote call number omitted)). The Court acknowledges that “one of the general 

principles” in bankruptcy law is that creditors are typically “paid ahead of shareholders in the 

distribution of corporate assets[.]” In re Am. Wagering, Inc., 493 F.3d 1067, 1071 (9th Cir. 2007)

(alteration added). This firm bankruptcy principle rests on shakier foundations in the equity 

context, however. Here, courts strive for “equality[,]” not priority. Cunningham, 265 U.S. at 13

(alteration added). Thus, courts have not hesitated to group unsecured creditors and defrauded 

investors together for purposes of equity receivership distribution plans. See, e.g., C.F.T.C. v. Rust 

Rare Coin, Inc., No. 2:18-cv-00892, 2020 WL 4904165, at *2–4 (D. Utah Aug. 20, 2020); S.E.C. 

v. Alleca, No. 1:12-cv-3261, 2017 WL 5494434, at *5 (N.D. Ga. Nov. 16, 2017). 

The Kaufman Creditors also argue that unlike the defrauded investors, they “never even

intended to do business with” the Receivership Entities. (Resp. 9). As blameless “victims[,]” the 

Kaufman Creditors assert they should have priority over the investors who made risky investments. 

(Id. (alteration added)). This argument overlooks the investors’ centrality in making a distribution 

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plan feasible at all. Ignoring this key fact would not foster an equitable result here — quite the 

opposite. 

Rust Rare Coin, Inc. helps illustrate why. There, the court considered a distribution plan 

that “combine[d] claims from unsecured creditors and defrauded investors.” Rust Rare Coin, Inc., 

2020 WL 4904165, at *2 (alteration added). Unsecured creditors objected that they should be given 

priority over defrauded investors because they did not make the same risky investments and hence 

were less blameworthy. See id. at *3–4. The court rejected these arguments, reasoning that 

blameworthiness notwithstanding, equity was “best served” by treating the two classes similarly 

because “the only reason any funds [were] available to pay the unsecured creditors [was] because 

of the unlawful investments [the receivership entity] obtained.” Id. at *4 (alterations added). In 

other words, the defrauded investors were “in some sense . . . subsidizing the recovery of the 

unsecured creditors.” Id. at *3 (alteration added; footnote call number omitted). 

So, too, here. The funds to which the Kaufman Creditors seek access exist primarily

through the Receiver’s sale of special purpose vehicles (“SPVs”). (See Aug. 4, 2022 Order 10). 

These SPVs date back to business loans that Defendants made with defrauded investors’ money. 

(See id.). When a borrower could not repay its loans, Defendants would initiate a lawsuit, buy up 

the borrower’s assets at foreclosure, and transfer those assets to a new entity, the SPV. (See id.). 

Once the Receiver took over, he began selling the SPVs for the purpose of repaying investors. (See 

id.).

Equity does not require that the Receiver toil to recover investors’ money — money that 

was theirs in the first place — only to then let the Kaufman Creditors advance to the front of the 

line. As in Rust Rare Coin, Inc., the Kaufman Creditors have the investors to thank for any

distributions they receive here. See 2020 WL 4904165, at *3–4. The Court thus concludes that 

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equity allows for the two groups to participate in distributions as equals and rejects the Kaufman 

Creditors’ request for preferential treatment.

 2. An Alternative Timeline

Because the Kaufman Creditors will receive distributions on equal footing with the

defrauded investors, their second objection, in which they seek claim resolution and payment on an 

expedited timeline relative to the unknown creditors (see Resp. 10–12), is moot. The Creditor 

Distribution Plan proposes a window of at least 180 days before the Court holds evidentiary 

hearings on disputed creditor claims. (See Mot. 9). Once those disputed claims are resolved, the 

unknown creditors will be on equal footing with defrauded creditors — the same position the 

Kaufman Creditors now occupy. 

Be that as it may, no distributions will issue until the interlocutory appeal pending in the 

Eleventh Circuit (see Notice of Appeal [ECF No. 307]) is resolved. (See Aug. 4, 2022 Order 32–

33; Sept. 2, 2022 Order [ECF No. 299]). Accordingly, the relative speed with which creditor claims 

are resolved matters little at present. Regardless of whether it takes 30 days or 180 days to resolve 

the Kaufman Creditors’ claims, investors and creditors alike will have to wait for the interlocutory 

appeal to conclude before they receive anything. This stay renders the distinction between known 

and unknown creditors — at least with respect to the dispute resolution and payout timetable — 

moot. 

IV. CONCLUSION

In summary, the Creditor Distribution Plan is “fair and reasonable” under present 

conditions. Walsh, 712 F.3d at 754. The Court thus rejects the Kaufman Creditors’ request for 

preferential treatment. Investors, known creditors, and unknown creditors will participate in the

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pro rata, rising tide distribution scheme as equals upon resolution of the interlocutory appeal. 

Accordingly, it is

ORDERED AND ADJUDGED that the Receiver, Jonathan E. Perlman’s Motion for 

Approval of Creditor Distribution Plan and First Interim Distribution to Creditors [ECF No. 294]

is GRANTED.

DONE AND ORDERED in Miami, Florida, this 2nd day of December, 2022.

 ________________________________________

 CECILIA M. ALTONAGA

 CHIEF UNITED STATES DISTRICT JUDGE

cc: counsel of record

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