The federal courthouse annex on Barnard Street in Savannah

Settlement agreement for $7 million reached in Master Lending Group bankruptcy case

Widow of MLG founder Gregory M. Hirsch agrees to 'pay the gross amount of $7,000,000 to the Bankruptcy Estate'

One year after Master Lending Group, LLC (MLG) filed for Chapter 7 bankruptcy in the Southern District Courts of Georgia, a $7 million “compromise and settlement” has been tentatively reached to recoup some of the funds from the Savannah-based investment firm founded by the late Gregory M. Hirsch. According to court documents, the settlement has the agreement of Hirsch’s widowed wife—Judith Hirsch—and the Trustee assigned to the MLG estate, Tiffany Caron.

“Due to the costs and uncertainty of litigation, the Trustee believes it is in the best interest of the bankruptcy estate to settle with Mrs. Hirsch and her children,” reads part of a 21-page document, including the settlement agreement filed on July 1, 2024, with a motion to the judge written by Caron. “As a result of the analysis of the Forensic Team, months of negotiation with Mrs. Hirsch and the Mediation, the Trustee and Mrs. Hirsch have agreed on the terms.”

"This is especially true in the case of actual fraud, such as a Ponzi scheme."

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“Without a settlement, litigation could last for many years and any amounts recovered would be subject to a reduced payout to creditors due to the costs of litigation,” Caron argues in her motion to the court to approve the settlement. “Creditors are best served by an agreed resolution which will provide a distribution in a relatively short period of time. The further benefit to creditors in this case is the Trustee’s release of avoidance claims which would otherwise result in the Trustee filing lawsuits against the creditors in this case for recovery of preferential and fraudulent transfers. This is especially true in the case of actual fraud, such as a Ponzi scheme. Every single investor would be sued eventually after substantial discovery under Rule 2004 of the Federal Rules of Bankruptcy Procedure. This would result in millions of dollars of legal fees and the incurrence of substantial costs, particularly for court reporting and transcript charges. This settlement resolves all of these issues.”
Greg Hirsch was diagnosed with Lou Gehrig’s Disease (ALS) in August 2021 and died of the disease on August 3, 2023. Less than a month before his passing, on July 6, 2023, MLG filed for bankruptcy. There was $42.96 million in investor money missing at the time of MLG’s bankruptcy declaration. Once bankruptcy was filed by MLG (Judith Hirsch signed off on the order using Power of Attorney), the 130 claims against MLG and Gregory Hirsch became public record. Connect Savannah reported on the alleged “Ponzi scheme” of Hirsch at the time of the original MLG bankruptcy filing.

“There is 40 to 80 million dollars that went somewhere, and they are looking for clues to find where it went,” said Judge Edward Coleman of the forensic accountants going through MLG files during a March 6, 2024, hearing in Savannah. “At the bottom of this case, the suggestion has been made that this was a 'Ponzi scheme.' That’s a criminal activity and I want to know who was party to that.”
click to enlarge Settlement agreement for $7 million reached in Master Lending Group bankruptcy case
Hirsch & Tucker offices & former home to Master Lending Group, LLC on Mall Blvd.
Before his death at the age of 60, Gregory Hirsch was a professional CPA at his family firm. According to Neil Gordon, who represents the Trustee in the case, MLG was anything but a standard investment firm. “Greg was a Managing Partner at Hirsch & Company, then later Hirsch & Tucker, for a combined 35 years,” read a portion of Hirsch’s obituary in August 2023. The CPA firm Hirsch & Tucker is located at 440 Mall Blvd. Suite A, which is the same address used by Gregory Hirsch for MLG in annual business registration forms filed with the State of Georgia. The lack of accounting records kept for MLG transactions was especially concerning for Gordon.

“Mr. Hirsch was a CPA, and it’s rare that a CPA doesn’t document things like business transactions,” Gordon told the judge at the March 6 hearing. “Of course, that’s the whole aim of this enterprise. I’ve never seen this kind of money go out without documentation. It’s bizarre."

Caron wrote in her motion to Judge Edward Coleman that the settlement reached on July 1, 2024 “is in the best interest of creditors,” although the settlement is not official until the creditors, and court, sign off on it. The motion from Caron argues that four factors exist when the bankruptcy estate is deciding whether or not to accept a settlement agreement such as this one.

“These factors are as follows: (1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (4) the paramount interest of the creditors and a proper deference to their reasonable view in the premises.”

Caron also noted that a former MLG employee, Dean Flake, is already making payments to the Trustee.

“The Trustee is also collecting restitution payments from Dean Flake, a former employee of MLG, who had embezzled funds from the company.”

Flake is currently serving time for Bank Fraud after he was sentenced to 20 months in federal prison and 13 months of home confinement by U.S. District Court Judge William Moore in September 2020. Bobby L. Christine, U.S. Attorney for the Southern District of Georgia, said Flake stole millions by forging checks.
Filed in 2019 by Gregory M. Hirsch
“Stealing from your own long-time employer displays callous disregard for those who have placed employees in positions of trust,” Christine said in a 2020 justice department press release. “Dean Flake squandered his opportunity to earn an honest living when he bit the hand that generously fed him, and thus will now dine in a prison cafeteria. By the time his scheme was detected, Flake had stolen more than $1.6 million from his employer. The government identified, seized and forfeited $975,138.79 from the scheme, and after his arrest Flake admitted to stealing the money to feed a gambling addiction.”
click to enlarge Settlement agreement for $7 million reached in Master Lending Group bankruptcy case
The federal courthouse annex on Barnard Street in Savannah

Coleman will hear Caron’s motion to approve the settlement agreement during a hearing scheduled for 10 a.m. on July 30 in downtown Savannah (124 Barnard St., second floor hearing room), according to a court filing from July 2. A meeting of the creditors—or those with claims against MLG—was set for Tuesday, July 9, 2024 at the Social Hall at Congregation B'nai Brith Jacob Synagogue (5444 Abercorn St.) in Savannah. The meeting’s purpose and specifics were posted on the official website for the case,

“Please be advised the Trustee will be holding an in-person and virtual meeting of the creditors to discuss the status of the case, including a proposed settlement that is still being documented and is not yet final. Details of the settlement will follow by mail along with a Notice from the Bankruptcy Court of a hearing date for the Court to consider approval of the settlement once there is a signed agreement. The Trustee and Special Counsel for the Trustee will be present at the meeting to explain the status of the case, the proposed settlement and answer any questions you may have. If you believe that you are a creditor in this case, we encourage you to attend. This meeting is only for creditors of Master Lending Group, LLC. Security will be present at the entrance.”
Some of the creditors have more than one claim against MLG, but the approximately 100 claims against MLG would be paid out and distributed to claimants pro rata, or in proportion to each claim amount, should the agreement be officially settled. Judith Hirsch does deny all claims against her made by the Trustee, and the settlement agreement includes language denying fault or liability regarding MLG creditors.

“Mrs. Hirsch and Mrs. Hirsch’s children deny any liability to the Bankruptcy Estate or the Creditors, and nothing herein shall constitute an admission by Mrs. Hirsch or her children of any such liability.”


Travis Jaudon

Travis Jaudon is a reporter for Connect Savannah. He is a Savannah native and has been writing in Savannah since 2016. Reach him with feedback or story tips at 912-721-4358
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