updated 4/28/2011 5:46:34 PM ET 2011-04-28T21:46:34

CHICAGO, April 28, 2011 (GLOBE NEWSWIRE) -- Stoltmann Law Offices and Higgins and Burke, P.C. announce they filed an arbitration claim on behalf of a client of Virchow Krause & Company LLP, which is now known as Baker Tilly Capital. The client lost substantial sums in three private placements, The Orchard at Picacho, Cahava Investor, LLC and S&L Orlando, LLC. 

The private placements purchased posed an extremely high risk to the investor's principal. According to the Statement of Claim, the true risks of The Orchard at Picacho, Cahava Investor, LLC and S&L Orlando, LLC were not disclosed to the client. In addition, as alleged in the Statement of Claim, the investments were also unsuitable for the investor given his financial resources, actual investment objective and risk tolerance level. 

The Orchard at Picacho stated purpose was to purchase 930 acres of undeveloped land in Pinal County Arizona from an affiliated entity called Picacho Bridge, LLC. The total amount of the offering was $30.55 million and was sold out on March 16, 2006. Picacho was to purchase the raw land, which is located in Eloy, Arizona. According to the Statement of Claim, at the time of the offering, no plan had even been submitted to the county, no zoning changes had even been proposed to city council and no plan was in place to bring water and other basic services to the proposed development site.

Cahava Investor, LLC was a $17 million offering in a real estate development called Cahava Springs. Cahava Springs was to enter into a joint venture called CS Devco, LLC with Pyramid Community Developers in order to acquire Cahava Springs. Under the Private Offering Memorandum, Virchow Krause & Company LLC was entitled to an 8% commission on the sale of the units (totaling $1,360,000 for the entire offering), a placement fee of $100,000, and a 1% conditional fee. The Offering Memorandum also gives Virchow Krause & Company the right to purchase up to 25% of all available units and appoint two of the three members of the Governing Board.

S & L Orlando, LLC was represented to investors as being a secure, short term 9-month investment with principal protection. Under the Private Placement Memorandum ("PPM"), S&L Orlando sold a total of $3.2 million in these notes and acquired a loan in the amount of $18,550,000 in order to finance the purchase of hotel-condo units in a 14 story hotel complex located in downtown Orlando, Florida. The notes sold to investors were subordinate to this loan, which held a first mortgage position on the property. Once the purchases had been made, S&L was then going to operate the unit as a Crowne Plaza Hotel under a franchise agreement with InterContinental Hotels Group. This offering and the subsequent management of this property was managed by S&L Hospitality, LLC, a Wisconsin LLC. According to the PPM, an entity called VAF sub-CDE III, LLC ("VAF"), an affiliate of VKC and the accounting arm VKC, LLP, acquired this property for $23.5million. The property included over four acres of land, the building, unsold condominium units, and commercial units. Eventually, investors sustained a complete loss on the investment.

According to Chicago attorney Andrew Stoltmann, "Fortunately for clients who sustained losses in these three private placements and KeyLime Cove, and were clients of Virchow Krause & Company some, or all, of these losses might be recoverable through arbitration claims against the firm. For a no obligation, no cost determination on whether these losses can be recovered on a contingency fee basis, please contact our law firm in Chicago, Illinois."

According to attorney John S. Burke of Saint Charles, Illinois, "The soliciting of high risk, speculative private placements to unsuspecting clients is a major problem in Illinois and throughout the entire United States. Firms often are blinded by the large commissions and fees and don't do the necessary due diligence to protect investors. We encourage other victimized investors to contact us."

CONTACT: Stoltmann Law Offices
         Andrew Stoltmann Esq.
         o: 312-332-4200
         10 S. LaSalle, 35th Floor
         Chicago, IL 60603
         Higgins and Burke P.C.
         John Burke Esq.
         o: 630.762.9081
         2560 Foxfield Road, Suite 200
         Saint Charles, IL 60174

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