Investors snared in a large real estate scam are seeking to recover their money by forcing the company they invested in to declare bankruptcy. Seven people filed an involuntary petition last Thursday against Professional Investors Security Fund, one of two companies under federal investigation after their owner, Novato real estate mogul Ken Casey, died in May. Professional Investors Security Fund and Professional Financial Investors engaged in serious misconduct for nearly three decades leading up to Mr. Casey’s death, according to restructuring officers. More than 1,500 investors believed the interest payments they received were from collateral for their loan, when in fact a substantial amount was funded by new investments. Attorneys reported the findings to the Securities and Exchange Commission, which launched an investigation that is expected to wrap up in the fall, and all interest payments and withdrawals were frozen. Now, the seven petitioners are seeking a return of over $5 million that they invested in Professional Investors Security Fund, which does not have enough value to fully return investments. The company has until Aug. 6 to either consent to chapter 11 bankruptcy or contest the filing with a judge. Michael Hogan, the companies’ chief restructuring officer, told investors that the restructuring team is evaluating an appropriate response, and if consenting to the petition is the best way to maximize value for the investors, then they will do so. He also said the companies will likely enter bankruptcy or receivership, so that decisions will benefit from judicial supervision and court approval. “Our decision-making process is and will continue to be driven by what is in the best interest of the investors, and that includes our review of this involuntary petition,” Mr. Hogan wrote in a letter last Friday. Three of the petitioners live in Point Reyes Station: Liza Goldblatt is seeking $188,455, Andrew Michaels is seeking $377,250, and Mary Michaels is seeking $430,422. The most-invested petitioner, Jacques Achsen of San Anselmo, is seeking $3.3 million. One of the petitioners, who requested anonymity, told the Light that they filed the petition because of the dearth of information coming from the restructuring team and to protect the assets as quickly as possible. The restructuring team has sent six letters to investors since June 4, with varying amounts of information. In the letters, they said they will have a plan to address all investment types within two months from now. They are sorting through decades of financial misconduct by Mr. Casey’s two companies, which owned 30 properties in Marin and southern Sonoma County, consisting of over 600,000 square feet of commercial space and over 750 apartments. Investors were given a deed of trust for one or more properties or a straight note, and annual interest payments fluctuated between five and 10 percent. The company’s pitch was that property values reliably rise in Marin because new development is almost nonexistent. Some local investors were given a commission to bring in others. Mr. Casey, who had a record of tax fraud, was well known in Marin for his business ventures, philanthropy and recent political involvement.