Two large real estate companies under federal investigation for defrauding investors have declared bankruptcy, giving investors a larger say in how their money is recovered. The companies—Professional Financial Investors and Professional Investors Security Fund—were owned by the late Ken Casey, a Novato businessman who orchestrated a classic Ponzi scheme, according to lawyers handling the bankruptcy. The companies have assets: 70 commercial and residential properties in the North Bay worth over $550 million, minus roughly $300 million owed to banks. But as time went by, returns to investors were paid from new investments, not from the increasing value of the properties. Without new investment coming in, the scheme collapsed; now, the companies do not have enough value to return investments in full, and over 1,500 investors have large sums of money at risk. “Make no mistake about it: You have been victimized, you have been lied to, you have been cheated. You are the victims of a scheme, period,” attorney Ori Katz told investors on a video call on Monday. The meeting was an attempt for the new leadership team, Mr. Katz and Michael Hogan, the chief restructuring officer, to build trust with investors, and over 650 people attended. A number of investors are from West Marin, and some of them were paid a commission to bring in more investors. The meeting started with an apology from Mr. Katz and Mr. Hogan for their lack of communication, then they launched into a game plan of how investors could recover their money. They said all of the bad actors had been let go from the company, and that Mr. Hogan secured the companies’ 100-plus bank accounts. With a vacuum in leadership, Mr. Hogan has focused on supporting the 45-person property management team, which collects rent on nearly 1,000 apartments and 600,000 square feet of warehouse and office space. Through the Chapter 11 bankruptcy case, the Department of Justice will form a committee of around 10 large investors to serve as a watchdog for major decisions, and two ad-hoc committees will be separately formed, all with legal counsel on the companies’ bill. Investors will also be allowed to select a new independent director to oversee the company. The investigation by the Securities and Exchange Commission is expected to wrap up this fall, and Mr. Katz said he aims to get through bankruptcy swiftly, with no fighting over money, no litigation and a positive resolution for all.