On August 30, 2018, Harvey Sender was appointed as the Receiver for Gary J. Dragul, GDA Real Estate Services, LLC, GDA Real Estate Management, LLC, and their respective properties and assets, and interests and management rights in related affiliated and subsidiary businesses (the “Receivership Estate” or the “Estate”). This website is maintained by Harvey Sender in his capacity as Receiver. The purpose of the site is to provide selected pleadings, documents, key dates, and status reports to interested parties regarding this matter. Neither the Receiver nor his counsel can or will provide legal advice to creditors, investors, or other interested parties. As the Dragul Receivership proceeding is a complex legal matter, all parties are encouraged to retain and consult with their own legal counsel and accountants regarding this matter.
Current Status Re: Distributions [Posted 7/28/2025]
On March 28, 2025, the bankruptcy court denied the Receiver’s claims in the Clearwater bankruptcy cases and rejected the Receiver’s settlement agreement with the Clearwater estates pursuant to which the Estate would receive $500,000. On April 8, 2025, the Receiver appealed the bankruptcy court’s March 28, 2025, Order and Judgment to the United States District Court in Colorado, and on April 9, 2025, filed a motion to stay proceedings pending that appeal. The District Court denied the Receiver’s Stay Motion on June 6, 2025, in an order plainly indicating the Receiver would not prevail on appeal. On June 10, 2025, the Receiver dismissed the appeal thereby terminating the Receivership’s involvement in the Clearwater bankruptcy cases.
On June 18, 2025, the Receiver filed his proposed Plan of Distribution. A copy of the Plan can be found under the “Pleadings” Tab to the left. As more fully described in the Plan, the Receiver proposes making an interim distribution of $1.3 million which would provide a net return to investors of approximately 40% of their cash-in, cash-out losses.
The only objection to the Plan was filed by Hagshama on July 11, 2025. Hagshama’s objection is also located under the Pleadings Tab. Hagshama is a large institutional investment firm that managed investments for hundreds of Israeli individuals. Hagshama formed separate LLCs to co-own nine properties with Dragul formed LLCs, comprised of small investors who often invested $50,000-$100,000.
Under the Plan, Hagshama is not projected to receive any distributions. In its objection, Hagshama argues it is entitled to over $1.1 million of the proposed distribution, and similarly the majority of any future distributions. On July 25, 2025, the Receiver replied to Hagshama’s objection and asked the Court to approve the Plan as submitted. The reply is also found under the Pleadings Tab.
Until the Receivership Court decides this issue, no distributions can be made. If the Court adopts Hagshama’s position, the Receiver will submit a revised Plan and provide notice and an opportunity for parties-in-interest to object.
The Receiver is continuing efforts to collect on the $14.7 million judgment obtained against Marlin Hershey in 2023 through enforcement proceedings in North Carolina. The Receiver will continue those efforts and/or investigate a potential sale of that judgment. If additional funds are recovered, they would be distributed when recovered under a Court approved Plan.
[Posted 3/3/2025]
There are several issues preventing the Receiver from closing the Receivership Estate and making distributions.
First, pursuant to a Settlement Agreement reached with Gary Dragul in October 2023, Mr. Dragul was obligated to pay the receivership estate $850,000 by October 25, 2024. Mr. Dragul failed timely to make the payment and failed to cure his default within 30 days as allowed by the Settlement Agreement. On December 20, 2024, at the Receiver’s request, the Court in the Insider Case entered a stipulated judgment against Dragul for $999,999.99. The Receiver is undertaking efforts to collect on that judgment.
Second, the Receiver settled the estate’s claims against the Clearwater bankruptcy estates in March 2024. A single investor, Chad Hurst, objected to the approval of that agreement, which would bring an additional $500,000 into the estate. The parties continue to litigate the issue; the January 31, 2025, hearing scheduled in the Receivership Court on that Settlement Agreement was vacated at the Court’s request because the sitting judge rotated to another courtroom on January 27, 2025. The hearing is now set to occur on April 18, 2025.
Third, the Receiver is continuing efforts to collect on the $14.7 million judgment obtained against Marlin Hershey in 2023 through enforcement proceedings in North Carolina. The Receiver will continue those efforts and/or investigate a potential sale of that judgment. Currently Mr. Hershey is in prison in Williamsburg Federal Correctional Institute in South Carolina; his release date is scheduled for May 26, 2025.
Despite these pending issues, the Receiver anticipates filing a proposed distribution plan in 2025 and will recommend to the Receivership Court that he be permitted to make interim distributions.