The Securities and Exchange Commission is investigating the financial dealings of a California doctor-turned-developer, Donald J. Davenport, whose petition for bankruptcy filed last month may cost members and units of the Seventh-day Adventist Church millions of dollars.
Davenport, a general surgeon, gave up his medical practice to work in a multimillion-dollar real estate business that he began by building post offices in fast growing Sun Belt communities ad leasing them back to the government. For financing, he relied heavily on his ties to the closely knit Seventh-day Adventist Church of which he is a member.
The preliminary petition for bankruptcy filed July 22 listed more than 270 creditors, of whom the vast majority are Adventist pastors or other church workers, along with 27 institutions or units of the church.Although davenport has yet to file a full accounting of the amount owed, his attorney for the bankruptcy proceedings, Robert Shutan, estimated that creditor's claims may run as high as $40 million.
Shutan confirmed an SEC investigation is under way but would not talk about it. An SEC spokesman would neither confirm nor deny a probe is under way. Irving Sulmeyer, trustee for Davenport's enterprises, said the investigation "will have no effect on the [bankruptcy] proceedings." s