Last year MDK Law settled a multiyear dispute regarding the purchase of fractional shares in a real estate venture for approximately 12 investors. Plaintiffs were real estate investors—or so they thought. Their investment had gone bad, and the investment managers were demanding additional that Plaintiffs contribute additional capital and if the Plaintiffs refused, then the investment managers threatened to foreclose on their entire interest. After consulting a lawyer to review their documents and determine whether they were required to pay this demand, to Plaintiffs surprise, they were told that they did not own or invest in real estate.

Instead, Plaintiffs had purchased an LLC company which separately owned a share of the real estate investment. Plaintiffs had purchased a security thereby subjecting them to an entirely different set of laws.

Unfortunately, by signing a series of non-reliance statements within the purchase documents, any claim for fraud that the Plaintiffs might have had were extremely difficult to pursue. The result was a protracted and costly litigation process.

While MDK Law was able to resolve the issue in a manner that was highly favorable to the Plaintiffs, if Plaintiffs had hired an attorney to review these documents prior to investment, they may not have found themselves in the predicament they faced for over 3 years.

While fiscal discipline and financial literacy may afford persons the ability to invest in complex and lucrative investment schemes, it is critical they the investor understand fully the nature of the investment and the terms of the agreement. At MDK Law our attorneys have the experience and knowledge to navigate the sometimes complex world of 1031 exchange investment schemes. With our assistance we can provide you the guidance and counseling to ensure that when you choose to benefit from ever complex investment schemes you will do so with full understanding of the legal risks and benefits of the investment before you place your trust into the hands of an investment manager.


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