LeFever Mattson Bankruptcy: Plan Effective May 14, 2026, Investors Projected 19.7%-35.9%, No Payout Yet

What this page is, and the rule it follows

LeFever Mattson, a California corporation, and its affiliates managed real estate partnerships in Northern California that sold interests to individual investors, including investors who used IRAs. The companies, a court, the SEC and federal prosecutors are all involved, and the documents use different counts. This page reads the court papers: the plan and disclosure statement, the confirmation order, the trustee's first status report, the joint investigation report, one creditor dispute, the SEC's litigation release and the indictment. We name companies, courts and case numbers and describe individuals by role. Anything not found by a court, such as a prosecutor's or the SEC's account, is marked alleges. The claims agent, Verita Global, hosts every filing free at veritaglobal.net/LM.

The case is not a securities issuer that files with the SEC: there is no prospectus or 10-K to read. The record is the docket.

The case in dates

What the plan does to an investor's claim

The plan is a single-pot plan: it pools the assets and liabilities of the debtors and of KS Mattson Partners, LP and its related entities and treats all investors alike, whether or not their investment appears in the debtors' books. The trustee's report says that on the effective date all limited partnership interests, LLC interests and investor deeds of trust were cancelled and replaced with a single Investor Claim for each Investor, which carries Class A and Class B Plan Recovery Trust Units. Investors who voted to accept the plan and did not opt out of the Contributed Claim Election also contributed their own claims against third parties to the trust, in exchange for Class C units.

Each Investor Claim has two parts:

• Tranche 1: the amount invested, less returns of principal and less distributions received during the seven years before September 12, 2024.
• Tranche 2: the distributions that were deducted in working out Tranche 1.

Investors are paid on Tranche 1 first. Tranche 2 is paid only if every Tranche 1 claim is paid in full, and the disclosure statement shows 0.0% recovery on it in all four scenarios. The plan itself gives no release to the former principal or to the other 50% record owner of LeFever Mattson, who has a separate settlement approved by the court. The confirmation order also states that its Ponzi findings are not binding on the other 50% record owner of LeFever Mattson and related parties covered by a January 29, 2026 settlement (Docket No. 3876), and have no preclusive effect on two lenders, Freddie Mac and California Bank of Commerce. We did not read that settlement itself.

Projected recovery by class

These are the plan proponents' estimates, not results. The trustee's November 2, 2026 report says the Class A and Class B range "has not changed" from the one disclosed with the plan.

The disclosure statement compares the plan with a forced conversion to Chapter 7 (amounts in thousands of dollars, as stated in Exhibit C):

The gap between the two cases comes from two lines. Gross proceeds from the unsold properties are assumed higher in Chapter 11 (54,590 to 76,477 against 37,835 to 45,830), and total administrative claims are lower (54,510 to 48,910 against 74,023 to 64,140): the Chapter 7 columns add a trustee commission (4,013 to 4,730) and case professionals (21,000 to 15,000), while the Chapter 11 columns carry a wind-down budget of 5,500 to 4,500. All four start from the same assumed cash on hand of 94,745 and DIP financing claims of 12,100. The analysis is from December 11, 2025, before the consolidation order and before property sales began under the trust; it is the latest recovery table in the record, and the trustee's report says the range stands.

What that means in dollars (our arithmetic): an investor with an allowed Tranche 1 claim of $500,000 would, at 19.7% to 35.9%, receive between $98,500 and $179,500 in total over the life of the trust, and the first payment would be under 10%, or under $50,000. Those are projections on a claim that must first be allowed; they are not a quote of what any investor will receive.

Where the money stands

Net proceeds are after secured debt, closing costs and commissions, so net sales proceeds were about 17.7% of gross (our arithmetic). The largest single sale in the report is 2151 Salvio Street, which closed on October 30, 2026 for $15,000,000; the disclosure statement lists Umpqua Bank as the secured lender on that address, with a $14,328,260.33 voting amount. Property-by-property sale prices and dates are in the CSV. We left out net proceeds by property because the report's column alignment is ambiguous in the text we could read.

The trust must set reserves for its expenses and for disputed claims and must make distributions at least annually unless the oversight committee agrees otherwise. Before the first payout the trustee must finish allowing investor claims, resolve the administrative, priority and secured claims ahead of investors (including priority tax claims asserted by taxing authorities) and set reserves. The report states it in one sentence of its own: “No distribution has yet been made to Investors, and the Trustee has not set a date for the initial distribution.”

The largest secured creditors

Class 3 secured lenders are paid ahead of investors. The plan gives each lender claim its own subclass: 67 subclasses, with voting amounts totalling $233,230,213.73 (our arithmetic from Exhibit E of the disclosure statement, December 11, 2025; the list includes one claim shown at $1.00).

Socotra's share of the voting amounts is about 42.0% (our arithmetic). A voting amount is not the same figure as the principal balance; the figure below is the debtor's description in a dispute.

Socotra Capital: what the court papers say

Socotra Capital, Inc. is a Sacramento lender covered on our Socotra Capital review. In an opposition filed August 6, 2026 (Docket No. 4520) the Consolidated Debtor says Socotra was, at the start of the case, its largest single creditor, with about $94 million of principal outstanding plus more than $37 million of asserted accrued interest and fees, secured by 77 properties. These are the debtor's statements in a contested filing; Socotra's own position is in its motion, which we did not use.

• Investigation and settlement. The debtor says the Committee's investigation found that about $20 million moved from a LeFever Mattson bank account to the Socotra entities over seven years, and that the Committee informally asserted claims against Socotra including fraudulent transfer and equitable subordination. After mediation, a settlement agreement dated October 14, 2025 was approved by the court on November 14, 2025 (Docket No. 2852). The terms are in the agreement, which we did not read in full.
• Pinyon Creek. The debtor says the Pinyon Creek properties were sold in one bulk sale to EDC Badger, LLC for $22,250,000, the sale closed on March 10, 2026, and Socotra received $10,586,728 on that date, 100% of the balance owed on the applicable Socotra loans.
• Dispute ended. Socotra had moved on July 22, 2026 for release of funds and payment of legal fees under the settlement. The debtor opposed. On August 12, 2026 Socotra withdrew the motion, stating that it and the Consolidated Debtor "have resolved the issues and the relief requested by Socotra in the Motion." The filing does not give the terms.

Claims: counts, deadlines and what is still open

The nine omnibus motions allowed one Investor Claim per investor in the Tranche 1 and Tranche 2 amounts stated in the signed letter and disallowed the duplicate proofs. The report says the Trustee is litigating one contested objection to a large non-investor claim. The bar dates for new claims have passed: February 14, 2025 for the LFM debtors, October 3, 2025 for KS Mattson Partners, LP, and June 15, 2026 for administrative claims, according to the disclosure statement and the claims agent's calendar. Whether a late claim could be allowed is a legal question we did not research.

Money the trust is trying to add

The trust owns the debtors' claims against third parties plus the claims investors contributed. The trustee reports, and these are allegations or early-stage actions:

• Former outside counsel. On August 5, 2026 the trustee filed a complaint in Sonoma County Superior Court against a former outside lawyer for the enterprise and two law firms, Hanson Bridgett LLP and Morgan, Lewis & Bockius LLP. It alleges aiding and abetting securities fraud, fraud, breach of fiduciary duty and conversion, and seeks damages in excess of $200 million. The report says the defendants are expected to contest the claims and that such litigation typically takes years.
• Banks. Around September 10, 2026 the trustee began adversary proceedings against JPMorgan Chase Bank, N.A. (about $2 million from the 1059 account between 2017 and 2023) and Citibank, N.A. (more than $3 million between 2017 and 2024) to recover payments as fraudulent transfers.
• Investors who were paid more than they put in. One adversary proceeding against such an investor seeks about $650,000, and four settlements with investors in that position brought in more than $800,000 in the reporting period.
• The former principal's own bankruptcy. The trust filed a proof of claim for not less than $237 million in his Chapter 7 case (No. 24-10714), and the stipulation approved on July 1, 2026 subordinates the claims he and his wife filed here to investor claims. The deadline to object to his discharge is January 1, 2027.

The criminal and SEC cases

These run separately from the claims process.

• SEC. In No. 3:25-cv-04387 (N.D. Cal., filed May 22, 2025) the SEC alleges that the former chief executive defrauded about 200 investors of at least $46 million by selling fake interests in real estate limited partnerships between about 2007 and April 2024, and that he solicited investors to move IRA money into self-directed IRAs to buy them. The SEC called it a Ponzi-like scheme and named KS Mattson Partners LP as a relief defendant. The charges are under Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5.
• Criminal. The indictment (filed May 13, 2025, No. CR25-00126 CRB) charges seven counts of wire fraud, one of money laundering and one of obstruction. It alleges a scheme of more than a decade to raise money from hundreds of investors for interests that were not what they were told. A Press Democrat report of September 15, 2026 gives a trial date of May 3, 2027; we did not check that against the docket.
• Court finding in the bankruptcy. The confirmation order states that, on the evidence offered at confirmation, the debtors and the related entities “were operated as a Ponzi scheme from at least September 12, 2017,” that investors deposited over $104 million into one commingled account (the “1059 Account”) since then, and that over $70 million went out as payments to investors.

Why you see $46 million and 200 investors elsewhere

Articles that use “$46 million” and “about 200 investors” are quoting the SEC's complaint, and the disclosure statement describes that allegation as the amount raised in the last five years alone. The bankruptcy record is larger and measures something else.

Tax and IRA points the trustee has raised

The trustee's report is the only document on tax in the record we read, and it says it is not tax advice. It states that FTI Consulting sent 2025 Schedule K-1s in mid-September 2026 only to investors whose investment was on the debtors' books, that no K-1 or other tax form is being issued for “off-book” investments, and that a letter to IRA custodians of July 22, 2026 explains that investments were cancelled and replaced by one Investor Claim so custodians can adjust account records. On August 11, 2026 the trustee's tax advisors sent the IRS a position paper that proposes, among other things, that investors be eligible to claim theft loss deductions for Ponzi scheme losses under Revenue Ruling 2009-9 and Revenue Procedure 2009-20; the report says discussions are at an early stage with no agreement. For how an IRA holds real estate interests see our self-directed IRA real estate rules.

What we could not verify

• The terms of the January 29, 2026 settlement with the other record owner of LeFever Mattson (Docket No. 3876) and of the Socotra settlement of October 14, 2025.
• The voting tabulation (Docket No. 4162) behind the statement that Classes 3, 4 and 5 accepted. We rely on the confirmation order.
• Net sale proceeds by property, and the sale status of the properties still listed, because the PDF text columns do not align.
• The criminal trial date, which comes from a newspaper report.
• Whether the trustee's request to extend the claims objection deadline to May 10, 2027 was granted; the hearing was set for November 12, 2026.
• How the Chapter 11 plan's recovery table has moved since December 11, 2025. The trustee says it has not.

What a reader can do with this

This page does not tell you whether your claim is worth more or less than the projection or whether to take any step in the case. Here is what the record supports.

1. Find your own claim. The allowed Tranche 1 and Tranche 2 amounts are in the signed letter and the court order that allowed it. Verita's investor search and inquiry form are on the case website. Check the arithmetic against your own statements.
2. Keep your address current. Checks are mailed to the address on file with Verita. The trustee says it will never ask for bank or wire information, a fee, or a click to “claim” funds, and that it will not pay by wire.
3. Check whether you got a K-1 for 2025. The report says on-book investors should have received one in mid-September 2026 and tells those who did not to write to LMCommittee@pszjlaw.com.
4. Watch the next filings. The next dates in the record are the claims objection deadline (November 10, extended to November 12, 2026), the extension hearing on November 12, 2026, the trustee's quarterly report, and the discharge objection deadline of January 1, 2027.
5. Read how other collapsed sponsors handled claims. Our pages on First Liberty Building & Loan, Pacific Private Money Group and the list of real estate crowdfunding failures cover different claims rules.
6. Take tax and legal questions to a professional. Whether and how to treat a loss, an IRA claim, or a Tranche 2 amount is a question for a tax professional or lawyer with your statements.

FAQ

Sources, read November 8, 2026: U.S. Bankruptcy Court, N.D. Cal., In re LeFever Mattson, Case No. 24-10545, as posted by the claims agent at veritaglobal.net/LM: Order Confirming Third Amended Chapter 11 Plan, as Modified (Docket No. 4225); Third Amended Disclosure Statement with Exhibits C and E (Docket No. 3109); Plan Recovery Trustee's First Status Report to Investors (Docket No. 4607); Joint Investigation Report (Docket No. 2568); Opposition of the Consolidated Debtor to Socotra Capital Inc's Motion (Docket No. 4520) and Socotra's withdrawal (Docket No. 4529); Post-Confirmation Report for the quarter ended June 30, 2026 (Docket No. 4571). SEC Litigation Release LR-26312 and Press Release 2025-76 (SEC v. a former LeFever Mattson chief executive, No. 3:25-cv-04387, N.D. Cal.). Indictment in United States v. a former LeFever Mattson principal, No. CR25-00126 CRB (N.D. Cal.), posted by the U.S. Attorney's Office. The Press Democrat, September 15, 2026, for the trial date. The CSV gives the document for every row.