Attornery's for Donald K McGhan have filed motions to dismiss the lawsuits filed against him in the Southwest 1031 Exchange, Arrow 1031 Exchange, and Qualified Exchange Services caes. The two filings are available for download here and here. Once again, this makes for fascinating reading.
Basically McGhan's attorneys contend that the lawsuit needs to be dismissed because Don McGhan (this is my summary and opinion, I'm not an attorney) had the right to direct funds as he saw fit and he cannot be held personally responsible. Of course, Don McGhan was the Qualified Intermediary of record with the State of Nevada, I'm not sure how much more personal responsibility there can be.
The law firm of Hale Peek Dennison and Howard of Las Vegas, NV has filed for sanctions against Don McGhan for basically wasting the courts time by filing to dismiss. Apparently the motion to dismiss can be used as a stall tactic and if it is found to actually be a stall tactic, the court can impose sanctions on the people who are stalling.
If only there weren't real people with real money involved this would make for great entertainment. Sadly, those damaged left their future in the hands of Don McGhan and Southwest 1031 Exchange. Their future now hangs in the balance while the court tries to uncover where the money went and how to get it back to the innocent victim's involved.
I definately agree. The 1031 exchange / Tenant in process can be dangerous. Ask lots of stupid questions, especially about the broker dealers due dilligence on TIC deals
Posted by: tenant in common | August 01, 2007 at 03:57 PM
I also agree, but i think it's not dangerous, its fatal flaw.
-gab
Posted by: 1031 investors | March 01, 2010 at 04:15 AM