(Bloomberg) — Brian Kahn, a <a href="https://bitcomme.com/business-analyst-syllabus-guide-for-2026/” title=”Business Analyst Syllabus Guide for 2026″>businessman who pleaded guilty in a hedge fund fraud case, says he doesn’t have the money to pay back investors seeking reimbursement six months after he bought a $6 million mansion in Florida.
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Kahn, who also gained notoriety for building Franchise Group Inc. before it went bankrupt, faces up to five years in prison for conspiring to defraud investors caught in the 2020 collapse of Prophecy Asset Management. Those investors are seeking repayment from Kahn after winning a separate arbitration case and then a default judgment in civil court totaling $309 million. They want the judge in the civil case to compel Kahn to detail his finances to show why he hasn’t paid.
“My business went bankrupt, the equity of that business in which they held significant economic interests became worthless, and I had over 100% of my net worth invested in my business,” Kahn wrote to a Delaware Chancery Court judge in a letter dated July 16. “In summary, there is nothing left to give and nothing left to get.” Kahn said he couldn’t afford to pay his lawyers and he now has a court-appointed attorney in his criminal case.
Kahn’s letter listed his address in Islamorada, an upscale village in the Florida Keys that bills itself as the Sport Fishing Capital of the World. Kahn bought the 5,195-square-foot waterfront house in January, and it features five bedrooms, six bathrooms, a pool and a dock, records show.
Weeks earlier, Kahn sold his former home, a two-acre estate outside Orlando that once belonged to baseball superstar Ken Griffey Jr., for $11 million. That house, like his new one, was heavily mortgaged. It’s not clear in the mortgage documents how much equity Kahn held in the house he sold or the one he bought. In his letter, Kahn said he hasn’t declared personal bankruptcy.
Kahn didn’t have an immediate comment. Before pleading guilty in December in the Prophecy case, Kahn had said he was a victim who lost money in the hedge fund’s 2020 implosion.
The tussle over Kahn’s assets in Delaware is part of a years-long attempt by investors to collect hundreds of millions of dollars from Kahn, who managed much of Prophecy’s assets before it collapsed. The jousting in such contests can take years and yield little money, especially when it involves a home in Florida. A provision in the state’s constitution known as a homestead exemption provides powerful protection against a primary residence being seized by creditors in most instances for civil cases.
