GARY OWEN CARIS (SBN 088918) gcaris@btlaw
Transcript of GARY OWEN CARIS (SBN 088918) gcaris@btlaw
NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES
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Complaint Filed: August 31, 2017
DATE: March 26, 2020 TIME: 8:30 a.m. DEPT.: S26
NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES LOCATED AT: (1) 3768 LINDEN AVENUE, LONG BEACH, CALIFORNIA; AND (2) 6956 SEABORN STREET, LAKEWOOD, CALIFORNIA; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION OF BRICK KANE IN SUPPORT THEREOF
Case No. NC061364
BARNES & THORNBURG LLP
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Defendants.
Carol A. Pedersen, C.P.A., Individually, et al.
vs.
Plaintiffs,
Randolph Anthony Garcia and Victorianna Hendrickson, Trustees of The Amended and Restated Garcia Family Trust UTD October 28, 2009, individually, and as Limited Partner of the CA Pedersen Client Investment Pool Limited Partnership, et al.,
Attorneys for Receiver ROBB EV ANS & AS SOCIA TES LLC
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GARY OWEN CARIS (SBN 088918) [email protected] BARNES & THORNBURG LLP 2029 Century Park East, Suite 300 Los Angeles, California 90067 Telephone: (310) 284-3880 Facsimile: (310) 284-3894
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES, SOUTH DISTRICT
Electronically FILED by Superior Court of California, County of Los Angeles on 02/20/2020 04:36 PM Sherri R. Carter, Executive Officer/Clerk of Court, by E. Salcido,Deputy Clerk
NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES
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contingencies removed, with an $18,000 purchase credit, to Hector J. Gutierrez and Ricardo
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§ 568.5 the sale of the real property commonly described as 3768 Linden Avenue, Long Beach,
California ("Long Beach Property") for a purchase price of $1,230,000, all cash and with all
(1) Authorizing, approving and confirming under California Code of Civil Procedure 25
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23 13, 2019 and the Order Authorizing Receiver to Sell Real Property of the Receivership Estate
24 dated August 2, 2019, hereby moves the Court for an order:
22 Receiver and Authorizing Receiver to Sell Real Property of the Receivership Estate dated June
20 Subject Matter of this Action and For Modification of the Receivership Order Pursuant to
21 Paragraph 4.J. Thereof entered January 3, 2018, the Order Modifying Order Appointing a
18 Pedersen, Individually and In All Representative Capacities for the Receivership Defendants, to
19 Turn Over to Receiver All Electronic Documents Relating to the Investment Pool Which is the
17 November 2, 2017, the Order Granting Ex Parte Application for Order Compelling Carol A.
16 Receiver entered October 20, 2017, the Amendment to Order Appointing a Receiver entered
12 Partner of Carol Pedersen Family Limited Partnership, Carol Pedersen Family Limited
13 Partnership, Dland Flip, LLC, Hedwig & Fawkes, LLC, General Partner of Unicorn Partners
14 XXIV Fund, L.P., Unicorn Partners XXIV Fund, L.P., and Hedwig & Fawkes, LLC (hereinafter
15 collectively "Receivership Defendants") appointed pursuant to the Court's Order Appointing a
11 Accountancy Corporation, CA Pedersen Accountancy Corporation, Dland Flip, LLC, General
9 CA Pedersen Client Investment Pool Limited Partnership, Carol A. Pedersen, Partner of Pedersen
10 & Fernando, CPA's, Carol Pedersen, President, Director, and Sole Owner of CA Pedersen
5 this matter may be heard, in Department S26 of the above-entitled Court located at 275 Magnolia,
6 Long Beach, California 90802, Robb Evans & Associates LLC ("Receiver") as Receiver of all
7 real and personal property and assets of Defendants Carol A. Pedersen, C.P.A., Individually,
8 Carol A. Pedersen, General Partner of CA Pedersen Client Investment Pool Limited Partnership,
4 PLEASE TAKE NOTICE that on March 26, 2020 at 8:30 a.m., or as soon thereafter as
TO: THE PARTIES AND THEIR COUNSEL OF RECORD, TO THE PLAINTIFFS IN
2 THE RELATED ACTIONS AND THEIR COUNSEL OF RECORD, AND TO
3 LIENHOLDERS AND OTHER PARTIES IN INTEREST:
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implement the sale, including without limitation a grant deed to transfer title to the Lakewood
pursuant to terms of the Lakewood Purchase Agreement, and sign any and all documents to
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Authorizing the Receiver to complete the as-is sale of the Lakewood Property (6)
24 aggregate of 5% be paid through escrow;
23 through escrow, that all closing costs be paid through escrow and that sales commissions in the
Providing that, as to the Lakewood Property, the first deed of trust shall be paid (5) 22
21 Exhibit 2;
18 Counter Offer No. 1 together with the Addendum No. 1, As-Is Purchase Addendum and
19 Additional Terms, and Contingency Removal No. 2 (collectively, the "Lakewood Purchase
20 Agreement"), a true and correct copy of which is attached to the Declaration of Brick Kane as
16 contingencies removed, to Ricardo Pena and Nereyda Armenta-Gomez ("Lakewood Buyer"),
17 pursuant to the California Residential Purchase Agreement and Joint Escrow Instructions, Seller
14 § 568.5 the sale of the real property commonly described as 6956 Seaborn Street, Lakewood,
15 California ("Lakewood Property") for a purchase price of $650,000, all cash and with all
Authorizing, approving and confirming under California Code of Civil Procedure (4) 13
12 Buyer;
10 pursuant to terms of the Long Beach Purchase Agreement, and sign any and all documents to
11 implement the sale, including without limitation a grant deed to transfer title to the Long Beach
Authorizing the Receiver to complete the as-is sale of the Long Beach Property (3) 9
7 shall be paid through escrow as described herein, that all closing costs be paid through escrow
8 and that sales commissions in the aggregate of 5% be paid through escrow;
Providing that, as to the Long Beach Property, the first and second deeds of trust (2)
Pulido ("Long Beach Buyer"), pursuant to the California Residential Purchase Agreement and
2 Joint Escrow Instructions, Seller Multiple Counter Offer No. 1 together with the Addendum No.
3 1, Additional Terms and As-Is Purchase Addendum, Buyer Counter Offer No. 1 and Request for
4 Repair No. 1 (collectively, the "Long Beach Purchase Agreement"), a true and correct copy of
5 which is attached as Exhibit 1 to the Declaration of Brick Kane filed concurrently herewith;
Buyer;
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NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES
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BARNES & THORNBURG LLP Dated: February 20, 2020
10 evidence, argument and authority as may be presented at or before the hearing on this Motion.
8 February 21, 2018, the Receiver's Status Report Dated August 9, 2018, the Receiver's Report
9 Dated March 19, 2019, the Receiver's Report Dated September 20, 2019, and such further
4 and Motion, the Memorandum of Points and Authorities attached hereto, the accompanying
5 Declaration of Brick Kane served and filed concurrently herewith, the proposed order granting
6 this Motion, served and lodged concurrently herewith, the papers and records in the Court's file,
7 including without limitation the Report of Receiver's Activities From November 6, 2017 Through
PLEASE TAKE FURTHER NOTICE that this Motion is brought pursuant to the Order
2 Appointing a Receiver, the June 13, 2019 Order and August 2, 2019 Order referenced above, and
3 California Code of Civil Procedure§§ 564, 568 and 568.5, and is based on this Notice of Motion
en Carls An eys for Receiver ROBB EV ANS & AS SOCIA TES LLC
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believe the investment was being managed by outside licensed and regulated brokers. (Complaint,
"advised that the Investment Pool was seeing well above-average returns" and being led to
Defendants." (Complaint, 1 1). Further, the Complaint alleges that in reliance on Defendants and
their long-term relationship with the accountants and accountancy firm, Plaintiffs invested
millions of dollars in the CA Pedersen Client Investment Pool ("Investment Pool"), after being
businesses to fraudulently obtain funds from investors in violation of the California Corporate
Securities Law and divert them for their own personal use and the use of the remaining
Partners XXIV Fund, L.P.; Hedwig & Fawkes, LLC; John Pedersen; Andrew Pedersen; Steve
Pedersen; Mark Delmer Hawkins; Maureen Ellen Ashley; Mark Louis Hawkins; and Brett A.
Hawkins (hereinafter collectively "Defendants").
The Complaint alleges that Defendants Carol A. Pedersen ("Pedersen") and Dayantha
Manilal Fernando used the corporate entity defendants in "a complex network of funds and
CPA's; Pedersen & Fernando, CPA's; Dland Flip, LLC, General Partner of Carol Pedersen
Family Limited Partnership; Carol Pedersen Family Limited Partnership; Dland Flip, LLC,
Hedwig & Fawkes, LLC, General Partner of Unicorn Partners XXIV Fund, L.P.; Unicorn
Partner of CA Pedersen Client Investment Pool Limited Partnership; CA Pedersen Client
Investment Pool Limited Partnership; Dayantha Manilal Fernando; Carol A. Pedersen, Partner of
Pedersen & Fernando, CPA's; Dayantha Manilal Fernando, Partner of Pedersen & Fernando,
Hendrickson, Trustees of The Amended and Restated Garcia Family Trust UTD October 28,
2009, individually, and as Limited Partner of the CA Pedersen Client Investment Pool Limited
Partnership; Randolph Anthony Garcia and Martha Garcia, Trustees of The Amended and
Restated 1996 Garcia Family Trust, individually and as Limited Partner of the CA Pedersen
Client Investment Pool Limited Partnership; and RMG Corporation (hereinafter "Plaintiffs") on
August 31, 2017 against Defendants Carol A. Pedersen, C.P .A.; Carol A. Pedersen, General
This action was filed by Plaintiffs Randolph Anthony Garcia and Victorianna
MEMORANDUM OF POINTS AND AUTHORITIES
I. ST A TEMENT OF FACTS 2
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NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES
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I It was amended on November 2, 2017 solely to reduce the Receiver's bond to $50,000. It was amended again January 3, 2018 to expressly clarify that the Receivership Defendants were required to turn over to the Receiver all books, records and files of the Receivership Defendants, whether in paper or electronic format. 2 Attachment" 1" to the Receivership Order lists four other parcels of real property: one is located at 505 Gould Avenue, Hermosa Beach, California ("Hermosa Beach Property"), which was sold pursuant to the Order Authorizing, Approving and Confirming Sale of Real Property Located at 505 Gould Avenue, Hermosa Beach California; one is located at 121 South Pacific Street, Oceanside, California, a timeshare interest owned by Pedersen ("Timeshare Property") which the Court has ordered may be sold but which has not yet been sold; one is located at 2001 Hillcrest Drive, Ventura, California, which the Receiver has determined is not owned by any of the Receivership Defendants; and one is located at 69069 East Vine Maple Drive, Rhododendron, Oregon ("Oregon Property"), owned by Pedersen. The Oregon Property is not under the jurisdiction of this Court.
6 companies they control. (Complaint, ,r 6). The Order Appointing a Receiver ("Receivership
7 Order") was entered on October 20, 2017. 1 The Receiver commenced this assignment when it
4 Plaintiffs sought the appointment of a receiver to determine the extent to which the
5 Defendants commingled and diverted investor funds amongst themselves and the network of
3 Penal Code. (Complaint, ,r 5).
2 Corporate Securities Laws, California Civil Code, California Commercial Code, and California
,r,r 37-45, 49, 379, 380). Additionally, the Complaint alleges multiple violations of the California
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12 Defendants ... " Paragraph 4.A. specifically identifies assets on Attachment "1" and states, with
13 respect to those assets, that: "[T]he Receiver is hereby authorized, empowered and directed: A.
14 To marshal, collect, review, observe, discover and take charge of all the real and personal
15 property ... " The assets listed on Attachment "l" include six parcels ofreal property, including
16 the properties commonly described as 3 768 Linden Avenue, Long Beach, California ("Long
1 7 Beach Property"), owned by Receivership Defendant Carol Pedersen Family Limited Partnership
18 ("Pedersen FLP"), and 6956 Seaborn Street, Lakewood, California ("Lakewood Property"), co-
19 owned by Pedersen FLP and Pedersen' s son, Andrew Pedersen. 2
20 The Receiver filed its Report of Receiver's Activities From November 6, 2017 through
11 owned, beneficially or otherwise by, or in the possession, custody or control of Receivership
8 filed the requisite bond and oath on November 6, 2017.
9 The Receivership Order provides, at paragraph 1, that the Receiver "take possession of all
10 real and personal property and assets of Receivership Defendants, whether directly or indirectly
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7 period, the Receivership Defendants controlled by Pedersen raised about $29.1 million from
8 individuals and entities known to be investors and another $412,000 from individuals and entities
6 The Receiver performed a forensic review and analysis of those documents. During this time
5 Trade"), which received and paid out investor funds from September 2010 through August 2017.
4 Financial Corporation ( collectively with E-Trade Securities LLC, referred to herein as "E-
3 Receivership Defendants' accounts at FirstBank Holding Co. ("First Bank") and E-Trade
2 accompanying Declaration of Brick Kane, the Receiver obtained documents from the
1 February 21, 2018 ("First Report") on February 22, 2018. As set forth in the First Report and the
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26 admitted to executing a scheme to defraud clients for whom she served as an investment advisor
23 States District Court, Central District of California, Case No. CR 19-00013 DMG. (March 2019
24 Report pp. 1-2, Ex. 1 ). Pedersen pied guilty to the crime charged in a single-count information,
25 wire fraud, in violation of Title 18, United States Code, § 1343. In the Plea Agreement, Pedersen
21 Pedersen entered into the Plea Agreement for Defendant Carol Ann Pedersen ("Plea Agreement")
22 with the United States in the case of United States of America v. Carol Ann Pedersen, United
20 Receiver's Activities filed on March 19, 2019 ("March 2019 Report"), on January 8, 2019,
17 which supported the conclusion that Pedersen was responsible for running a Ponzi scheme.
18 The Receiver's conclusion that the Receivership Defendants controlled by Pedersen were
19 engaged in a fraudulent Ponzi scheme was confirmed. As more fully set forth in the Report of
16 Receiver also described misrepresentations on investor statements and other investor documents
15 September 2010. In addition to the forensic analysis described in detail in the First Report, the
14 all the information available to it, that Pedersen was running a Ponzi scheme at least since
13 other sources of income are reflected in the bank documents. The Receiver concluded, based on
12 Pedersen's net investment income during this time period was only approximately $53,000. No
9 who are possible investors. The total amount raised was about $29.5 million. During this same
10 time period, Pedersen made payments to known investors of about $25 .2 million and payments to
11 possible investors of about $1.01 million, totaling approximately $26.2 million. However,
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3 The Receiver requests that the Court take judicial notice of all of the Receiver's reports referenced herein pursuant to Evidence Code § 452.
7 00013-DMG, Doc 20 (March 20, 2019). As set forth in the Receiver's Report Dated September
8 20, 2019 ("September 2019 Report"),3 Pedersen's sentencing hearing was held on September 4,
6 Criminal Minutes - General, U.S. District Court Central District of California, Case 2: 19-cr-
5 Ponzi scheme. On March 20, 2019 Pedersen pled guilty to the single-count information. See
4 funds in order to honor distribution requests made by prior investor-victims and was operating a
3 and had established with First Bank and E-Trade. She further admitted that she would solicit new
2 victims' funds as promised, but would instead deposit the funds into accounts that she controlled
between approximately 1996 and September 1, 2017. She admitted that she did not invest the
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26 Authorizing Receiver to Sell Real Property of the Receivership Estate ("Lakewood Property
24 because he had been previously dismissed from the litigation. Subsequently, the Receiver entered
25 into a stipulation with Andrew Pedersen to sell the Lakewood Property, entitled Stipulation
23 Court determined that it did not have jurisdiction over Andrew Pedersen without his consent,
22 Lakewood Property, because it is co-owned by Pedersen FLP and her son Andrew Pedersen. The
21 Estate dated June 13, 2019 ("Long Beach Sale Order"). The Court denied the motion as to the
20 Order Appointing a Receiver and Authorizing Receiver to Sell Real Property of the Receivership
17 On June 13, 2019, the Court heard the Receiver's motion for approval to market and sell
18 the Long Beach Property and the Lakewood Property, subject to future Court confirmation. The
19 Court granted the motion as to the Long Beach Property, as set forth in the Order Modifying
16 Judgments against Pedersen have been entered in the instant action and related actions.
13 etc., et al. v. Carol Pedersen, Los Angeles Superior Court Case No. BC668345; Mary F.
14 Marroquin et al. v. Carol Pedersen et al., Los Angeles Superior Court Case No. BC680766; and
15 Janet Cottrell, et al. v. Carol Pedersen, Los Angeles Superior Court Case No. NC061559.
9 2019. Pedersen was sentenced to a prison term of 97 months.
10 In addition to the instant action and the criminal case, three other sets of plaintiffs in three
11 related actions have filed suit against Pedersen and other Receivership Defendants, also asserting
12 fraudulent conduct in connection with investments made by those plaintiffs: Lael Montgomery,
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County Recorder of said County.
Book 507, Pages 28 and 29 of Maps, in the Office of the
of Los Angeles, State of California, as per map recorded in
sell, at private sale and subject to future confirmation by the Court, the Lakewood Property
equally co-owned by Pedersen FLP and Andrew Pedersen and legally described as:
Lot 1 of Tract No. 17487, in the city of Lakewood, County
Pursuant to the Lakewood Sale Order, among other things the Receiver was authorized to
removed.
the Long Beach Purchase Agreement, the property will be sold for $1,230,000, with an $18,000
credit back to the Long Beach Buyer at closing. The sale is all-cash. All contingencies have been
Pursuant to the Long Beach Sale Order, the Receiver has entered into the Long Beach
Purchase Agreement with Hector J. Gutierrez and Ricardo Pulido ("Long Beach Buyer"). Under
an ordinary and customary brokerage commission upon a completed sale of the property.
Under the Long Beach Sale Order, the Receiver was also authorized to enter into a
contract with a real property broker to market the Long Beach Property for sale using ordinary
and customary methods for the sale of the property and pursuant to which the broker will be paid
Lot on the West.
feet of Linden A venue vacated immediately adjoining said
owned by Receivership Defendant Pedersen FLP and legally described as:
Lot I in Block 3 of Tract No. 2964, in the city of Long
Beach, County of Los Angeles, State of California, as per
map recorded in Book 3 7, Page 3 5 of Maps, in the Office
of the County Recorder of said County. Also the East 20
Pursuant to the Long Beach Sale Order, among other things the Receiver was authorized
to sell, at private sale and subject to future confirmation by the Court, the Long Beach Property
("Lakewood Sale Order").
pursuant to the Order Authorizing Receiver to Sell Real Property of the Receivership Estate
Stipulation"). The Lakewood Property Stipulation was approved by the Court on August 2, 2019
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estimated market value at the time it was vacated, and the balances owed on the two liens which
maintained, in poor condition and evidenced several years of neglect and clutter. Based on the
the Long Beach Property tend to experience a high flow of traffic. The home was poorly
the Receiver. It backs onto retail properties on a main street. Two streets to the side and front of
having attractive architecture and located in a nice neighborhood, provided several challenges to
November 13, 2018, once following the entry of the Long Beach Sale Order on July 1, 2019 and
once after the property was vacated, on September 14, 2019. The Long Beach Property, while
The Receiver's staff inspected the Long Beach Property on three occasions, once on
MARKETING AND PROPOSED SALE OF THE LONG BEACH PROPERTY 20 II.
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19 contingencies have been removed.
17 Purchase Agreement with Ricardo Pena and Nereyda Armenta-Gomez ("Lakewood Buyer"),
18 pursuant to which the Lakewood Property will be sold for $650,000. The sale is all-cash and all
15 of the net proceeds.
16 Pursuant to the Lakewood Sale Order, the Receiver has entered into the Lakewood
14 payments he made after entry of the Lakewood Sale Order. The Receiver's share is the balance
13 of the Lakewood Sale Order, dividing the balance by two and adding back all full mortgage
12 taking net proceeds, subtracting all full mortgage payments made by Andrew Pederson after entry
10 each and every full mortgage payment that he made to Wells Fargo Home Mortgage ("Wells
11 Fargo") after entry of the Lakewood Sale Order. Andrew Pedersen's share is determined by
8 calculating how net proceeds from the sale would be split evenly between the Receiver and
9 Andrew Pedersen subject to certain adjustments whereby Andrew Pedersen would get a credit for
7 the Lakewood Property sale process. The Lakewood Sale Order further provided a method for
4 ordinary and customary brokerage commission upon a completed sale of the property. The
5 Receiver was to keep Andrew Pedersen informed regarding retention of a broker and any offer
6 that it intended on accepting, however he had no right to object or have any input with respect to
3 customary methods for the sale of the property and pursuant to which the broker will be paid an
2 with a real property broker to market the Lakewood Property for sale using ordinary and
1 Under the Lakewood Sale Order, the Receiver was also authorized to enter into a contract
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25 only 5% below the upper end of value and the Receiver's asking price. None of the other initial
21 These efforts led to multiple offers for the Long Beach Property. In response, the
22 Receiver prepared and disseminated through Fasnacht its Seller Multiple Counter Offer No. 1
23 detailing various requirements of the Receiver and maintaining the $1,295,000 asking price. In
24 response, the Long Beach Buyer increased their offer significantly, to $1,230,000, which was
20 The home also was promoted across Fasnacht's numerous social media platforms.
18 November. The property was featured on three brokers tours in November. Over 30 agents
19 viewed the Long Beach Property, who shared the listing with over 8,400 prospective purchasers.
17 held between October 11, 2019 and December 1, 2019. Four open houses were held in
16 Long Beach Property from early October through early December. Four private showings were
15 Coldwell Banker Coastal Alliance, through Fasnacht, took several steps to market the
14 estate.
13 in early October, once it was determined that a sale would generate value for the receivership
12 In consultation with Fasnacht, the Receiver determined to list the property for sale at that amount
11 latter analysis suggested that the upper end of value of the Long Beach Property was $1,295,000.
10 comparative market analyses from F asnacht, one in November 2018 and one in July 2019. The
9 agreed to a 5% sales commission. The Receiver obtained two thorough and comprehensive
8 "Team Fasnacht Realty Group"), is a very active listing agent in the neighborhood. Fasnacht
7 experience and knowledge of the neighborhood. Fasnacht, along with her group of agents (the
6 Alliance was selected to be the listing agent. She was selected because of her extensive
4 and sell the property to generate proceeds for the receivership estate.
5 After evaluating potential real estate firms, Helene Fasnacht of Coldwell Banker Coastal
2 the lienholders agreed to accept a discounted payoff amount. As described below, the second trust
3 deed holder has agreed to accept a discounted payoff, which has enabled the Receiver to market
encumber the property, there was no meaningful equity for the receivership estate unless one of
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5 III. LIENS ON THE LONG BEACH PROPERTY AND ESTIMATED PROCEEDS TO
6 THE RECEIVERSHIP EST ATE
1 offerors countered the Receiver's offer. The Receiver accepted this offer. Eventually, subject to
2 providing an $18,000 buyer's credit for necessary repairs, all contingencies were removed on
3 January 8, 2020 and the Long Beach Buyer's $25,000 earnest money deposit has become non-
4 refundable. The Long Beach Buyer is a non-insider, arm's length purchaser.
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22 2015, which fueled the Ponzi scheme until it collapsed. The Receiver will propose, as part of any
23 future claims allowance and payment process, that the first $200,000 of receivership estate funds
24 available for claimants be paid to Wall in light of Wall's agreement to accept a discounted payoff
25 of the Wall lien on the Long Beach Property.
20 Wall, designated as Investor 27 in the Receiver's First Report, also lost over $12.8 million
21 in Pederson' s Ponzi scheme, based largely on a payment of $12. 7 million to Pederson in January
18 buyer's $18,000 credit, it is anticipated that the receivership estate will be paid approximately
19 $173,000 from the Long Beach Property sale.
14 expense of foreclosing on the Long Beach Property and then attempting to resell it. Therefore,
15 Wall reached an agreement with the Receiver and agreed to accept $200,000, one-half of the
16 principal amount of the loan, in full satisfaction of the Wall lien. After payment of the two
17 secured liens, pro-rated taxes, costs of sale (including the sales commission) and deducting the
11 secure a loan Pedersen obtained in August 2017, shortly before the inception of the receivership,
12 at a time Pedersen was in desperate need of cash to forestall the impending collapse of her Ponzi
13 scheme. The Receiver understands that Wall did not want to be burdened with the effort and
7 There are two voluntary secured debts on the Long Beach Property: a first deed of trust in
8 favor of JP Morgan Chase Bank, N .A ("Chase") and a second deed of trust in favor of the Loren
9 and Carol Wall Family Trust ("Wall"). It is anticipated that Chase's balance at closing will be
10 approximately $765,000. The Wall lien has a face amount of$400,000 and was entered into to
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6 her mother, Kathy Evans) are extensively involved in marketing and selling real property
7 throughout the Lakewood Property's neighborhood. The "Evans Team" has over 30 years of
3 13, 2018 and July 1, 2019. The home is a modest, tract home in a nice area. After evaluating
4 potential real estate firms, the Receiver selected Kelly Evans (no relation to Robb Evans) of
5 REMAX College Park Realty to be the listing agent. Kelly Evans and her listing team (including
2 The Receiver's staff inspected the Lakewood Property on two occasions, on November
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22 which was $100 over the asking price, which was accepted by the Receiver. All contingencies,
23 including the financing contingency, were removed on January 29, 2020 and the Lakewood
24 Buyer's earnest money of $10,000 has become non-refundable. The Lakewood Buyer is a non-
25 insider, arm's length purchaser.
20 Receiver obtained four offers for the Lakewood Property. While three of the offerors did not take
21 steps to counter the Receiver's counter offers, the Lakewood Buyer made an offer of $650,000,
19 websites resulting in 9, 765 online views and the dissemination of 5, 700 flyers. In response, the
18 marketing efforts included 28 private showings, marketing links through at least 12 different
17 REMAX College Park Realty, through Kelly Evans, listed the property for 87 days. Its
16 determined to list the property for sale at that amount in late October.
15 a listing price of $649,900 was appropriate. In consultation with Kelly Evans, the Receiver
13 The first analysis suggested that a significant amount of remodel and repair work was needed to
14 maximize the value of the property. The second analysis suggested that, given comparable sales,
12 comprehensive comparative market analyses, one in November 2018 and one in October 2019.
8 experience selling homes in the area, specializing in those built by the developer of the Lakewood
9 Property. Andrew Pedersen indicated that he was pleased the Receiver was using a realtor with
10 extensive experience in the neighborhood. Additionally, Kelly Evans agreed to lower the real
11 estate commission from 6% to 5%. Kelly and Kathy Evans provided the Receiver two
v. Seymour, 35 Cal. 2d 494, 503, 218 P.2d 536 (1950). Based on these facts and circumstances, it
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properties will generate net proceeds for the benefit of the receivership estate.
The Court is empowered with wide discretion in confirming a judicial sale. Lesser & Son
agents and prospective buyers. Despite these challenges, the Receiver obtained a sale at just 5%
below a full value list price for the Long Beach Property and slightly above a full value list price
for the Lakewood Property. All contingencies have been removed on both properties and there
are sufficient sale proceeds to pay all lienholders, with Wall agreeing to accept a payment of one
half the principal balance in full satisfaction of the second lien on the Long Beach Property. Both
notification before gaining access for the purpose of showing the property to other real estate
remained occupied by Andrew Pedersen throughout the sale process, which required 24-hour
with the Receiver throughout this process. The Lakewood Property is jointly owned and
Beach Property for the receivership estate. Pedersen was uncooperative and uncommunicative
two lienholders. Until Wall agreed to accept a reduced payoff, there was no equity in the Long
the Receiver. The Long Beach Property was in need of extensive deferred maintenance and has
The Long Beach Property and Lakewood Property have each posed unique challenges to
THE RECEIVER HAS MAXIMIZED VALUE FOR THESE ASSETS AND THE
SALES SHOULD BE CONFIRMED
7 Fargo's secured lien, pro-rated taxes, costs of sale (including the sales commission) and allocating
8 the split between the Receiver and Andrew Pedersen to account for the credits in favor of Andrew
6 anticipated that its balance at closing will be approximately $338,000. After payment of Wells
5 Pedersen has been maintaining the monthly mortgage payments to Wells Fargo and it is
There is one voluntary lien against the property in favor of Wells Fargo. Andrew
LIENS ON THE LAKEWOOD PROPERTY, THE SPLITTING OF NET SALE
PROCEEDS WITH ANDREW PEDERSEN AND ESTIMATED PROCEEDS TO
THE RECEIVERSHIP EST A TE
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NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES
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11 proceeds will be approximately $130,000.
9 Pedersen as a result of the monthly mortgage payments he has been making pursuant to the
10 Lakewood Sale Order as described above, it is anticipated that the Receiver's share of net
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By:~~~
Attorn ys for Receiver ROBB EV ANS & AS SOCIA TES LLC
BARNES & THORNBURG LLP Dated: February 20, 2020
5 Procedure§§ 568 and 568.5, and the Long Beach Sale Order and Lakewood Sale Order.
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3 order providing for a sale to the buyers of the properties pursuant to the Long Beach Purchase
, 4 Agreement and Lakewood Purchase Agreement, as authorized by California Code of Civil
2 respectfully requested that this Court grant the Motion, confirm the sales and enter the proposed
is appropriate to confirm the Long Beach Property and Lakewood Property sales. It is
NOTICE OF MOTION AND MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES
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28 was entered on October 20, 2017 and the Amendment to Order Appointing a Receiver that was BARNES & -1-
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27 appointed Receiver in the above-captioned case pursuant to the Order Appointing a Receiver that
I am the President of Robb Evans & Associates LLC ("Receiver"), the Court 1. 26
25 I, Brick Kane, declare as follows:
Defendants. 23
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22 Complaint Filed: August 31, 2017
DATE: March 26, 2020 TIME: 8:30 a.m. DEPT: S26
DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER AUTHORIZING, APPROVING AND CONFIRMING SALE OF REAL PROPERTIES LOCATED AT: (1) 3768 LINDEN A VENUE, LONG BEACH, CALIFORNIA; AND (2) 6956 SEABORN STREET, LAKEWOOD, CALIFORNIA
Case No. NC061364
21 Carol A. Pedersen, C.P.A., Individually, et al.,
19 Plaintiffs,
20 vs.
Randolph Anthony Garcia and Victorianna Hendrickson, Trustees of The Amended and Restated Garcia Family Trust UTD October 28, 2009, individually, and as Limited Partner of the CA Pedersen Client Investment Pool Limited Partnership; Randolph Anthony Garcia and Martha Garcia, Trustees of The Amended and Restated 1996 Garcia Family Trust, individually and as Limited Partner of the CA Pedersen Client Investment Pool Limited Partnership; and RMG Corporation, Limited Partner of CA Pedersen Client Investment Pool Limited Partnership,
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES, SOUTH DISTRICT
Attorneys for Receiver ROBB EV ANS & ASSOCIATES LLC
GARY OWEN CARIS (SBN 088918) [email protected] BARNES & THORNBURG LLP 2029 Century Park East, Suite 300 Los Angeles, California 90067 Telephone: (310) 284-3 880 Facsimile: (310) 284-3894
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Electronically FILED by Superior Court of California, County of Los Angeles on 02/20/2020 04:36 PM Sherri R. Carter, Executive Officer/Clerk of Court, by E. Salcido,Deputy Clerk
ATTOl(Nt::YS AT LAW DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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27 $25.2 million and payments to possible investors of about $1.01 million, totaling approximately
22 2017. The Receiver performed a forensic review and analysis of those documents. During this
23 time period, the Receivership Defendants controlled by Carol Pedersen ("Pedersen") raised about
24 $29 .1 million from individuals and entities known to be investors and another $412,000 from
25 individuals and entities who are possible investors. The total amount raised was about $29.5
26 million. During this same time period, Pedersen made payments to known investors of about
16 Evans & Associates responsible for reviewing the financial documents which formed the basis for
17 the forensic accounting described in the First Report. I was one of the individuals primarily
18 responsible for drafting the First Report. As set forth in the First Report, the Receiver obtained
19 documents from the Receivership Defendants' accounts at FirstBank Holding Co. ("First Bank")
20 and E-Trade Financial Corporation ( collectively with E-Trade Securities LLC, referred to herein
21 as "E-Trade"), which received and paid out investor funds from September 2010 through August
14 Evans & Associates principally responsible for supervising and directing the forensic accounting
15 prepared by the Receiver and described in the First Report, and was one of the members of Robb
13 through February 21, 2018 ("First Report") on February 22, 2018. I was the member of Robb
The Receiver filed its Report of Receiver's Activities from November 6, 2017 2. 12
entered on November 2, 2017 (collectively, the "Receivership Order"). I am one of the members
2 of Robb Evans & Associates LLC responsible for the day-to-day management and supervision of
3 this receivership estate. Robb Evans, Robb Evans & Associates LLC, and/or I have been
4 appointed receiver in over 200 actions over the last 20 years, including over 90 equity
5 receivership actions. I have been personally involved in each of these receiverships, and was one
6 of the members of Robb Evans & Associates responsible for managing, supervising and making
7 decisions concerning these receivership estates, including decisions regarding the sale of various
8 real and personal property assets which cumulatively have exceeded one billion dollars. I also
9 have personal knowledge of the facts set forth in this declaration and if I were called upon to
10 testify as to these facts I could and would competently testify based upon my personal
11 knowledge.
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•• ,.., • .1 ... ,-iw,,_,.
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18 Pedersen were engaged in a fraudulent Ponzi scheme was confirmed. On January 8, 2019,
19 Pedersen entered into the Plea Agreement for Defendant Carol Ann Pedersen ("Plea Agreement")
20 with the United States in the case of United States of America v. Carol Ann Pedersen, United
21 States District Court, Central District of California, Case No. CR 19-00013 DMG. Pedersen pled
22 guilty to the crime charged in a single-count information, wire fraud, in violation of Title 18,
23 United States Code, § 1343. In the Plea Agreement, Pedersen admitted to executing a scheme to
24 defraud clients for whom she served as an investment advisor between approximately 1996 and
25 September 1, 2017. She admitted that she did not invest the victims' funds as promised, but
26 would instead deposit the funds into accounts that she controlled and had established with First
27 Bank and E-Trade. She further admitted that she would solicit new funds in order to honor
The Receiver's conclusion that the Receivership Defendants controlled by 4. 17
11 related actions have filed suit against Pedersen and other Receivership Defendants, also asserting
12 fraudulent conduct in connection with investments made by those plaintiffs: Lael Montgomery,
13 etc., et al. v. Carol Pedersen, Los Angeles Superior Court Case No. BC668345; Mary F.
14 Marroquin et al. v. Carol Pedersen et al., Los Angeles Superior Court Case No. BC680766; and
15 Janet Cottrell, et al. v. Carol Pedersen, Los Angeles Superior Court Case No. NC061559.
16 Judgments have been entered against Pedersen in this action and the related actions.
Besides the Plaintiffs in the instant action, three other sets of plaintiffs in three 3. 10
9 about $27.5 million.
$26.2 million. However, Pedersen's net investment income during this time period was only
2 approximately $53,000. No other sources of income are reflected in the bank documents. The
3 Receiver concluded, based on all the information available to it, that Pedersen was running a
4 Ponzi scheme at least since September 2010. The First Report also describes misrepresentations
5 on investor statements and other investor documents which I reviewed and which support the
6 conclusion that Pedersen was responsible for running a Ponzi scheme. Based on the Receiver's
7 review, analysis and reconciliation of the documents and records that have been made available to
8 it, including the documentation obtained from many, but not all, investors, investor claims are
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ATTORNEYS AT LAW
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27 Lot on the West.
20 authorized to sell, at private sale and subject to future confirmation by the Court, the Long Beach
21 Property, which is legally described as:
22 Lot 1 in Block 3 of Tract No. 2964, in the city of Long
23 Beach, County of Los Angeles, State of California, as per
24 map recorded in Book 3 7, Page 3 5 of Maps, in the Office
25 of the County Recorder of said County. Also the East 20
26 feet of Linden Avenue vacated immediately adjoining said
Pursuant to the Long Beach Sale Order, among other things the Receiver was 6. 19
13 jurisdiction over Andrew Pedersen without his consent, because he had been previously dismissed
14 as a defendant from the litigation. Subsequently, the Receiver entered into a stipulation with
15 Andrew Pedersen to sell the Lakewood Property, entitled Stipulation Authorizing Receiver to Sell
16 Real Property of the Receivership Estate ("Lakewood Property Stipulation"). The Lakewood
17 Property Stipulation was approved by the Court on August 2, 2019 pursuant to the Order
18 Authorizing Receiver to Sell Real Property of the Receivership Estate ("Lakewood Sale Order").
12 denied the motion as to the Lakewood Property, because the Court determined that it did not have
5 and sell the real property commonly described as 3768 Linden Avenue, Long Beach, California
6 ("Long Beach Property"), owned by Receivership Defendant Carol Pedersen Family Limited
7 Partnership ("Pedersen FLP"), and 6956 Seaborn Street, Lakewood, California ("Lakewood
8 Property"), co-owned by Pedersen FLP and Pedersen's son, Andrew Pedersen, subject to future
9 Court confirmation. The Court granted the motion as to the Long Beach Property, as set forth in
10 the Order Modifying Order Appointing a Receiver and Authorizing Receiver to Sell Real
11 Property of the Receivership Estate dated June 13, 2019 ("Long Beach Sale Order"). The Court
On June 13, 2019, the Court heard the Receiver's motion for approval to market 5. 4
2 March 20, 2019 Pedersen pled guilty to the single-count. Pedersen's sentencing hearing was held
3 on September 4, 2019. Pedersen was sentenced to a prison term of 97 months.
distribution requests made by prior investor-victims and was operating a Ponzi scheme. On
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DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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27 on November 13, 2018, once following the entry of the Long Beach Sale Order on July 1, 2019
The Receiver's staff inspected the Long Beach Property on three occasions, once 8. 26 25 after entry of the Lakewood Sale Order. The Receiver's share is the balance of the net proceeds.
22 of the Lakewood Sale Order. Andrew Pedersen's share is determined by taking net proceeds,
23 subtracting all full mortgage payments made by Andrew Pederson after entry of the Lakewood
24 Sale Order, dividing the balance by two and adding back all full mortgage payments he made
15 customary brokerage commission upon a completed sale of the property. The Receiver was to
16 keep Andrew Pedersen informed regarding retention of a broker and any offer that it intended on
17 accepting, however he had no right to object or have any input with respect to the Lakewood
18 Property sale process. The Lakewood Sale Order further provided a method for calculating how
19 net proceeds from the sale would be split evenly between the Receiver and Andrew Pedersen
20 subject to certain adjustments whereby Andrew Pedersen would get a credit for each and every
21 full mortgage payment that he made to Wells Fargo Home Mortgage ("Wells Fargo") after entry
10 Book 507, Pages 28 and 29 of Maps, in the Office of the
11 County Recorder of said County.
12 Under the Lakewood Sale Order, the Receiver was also authorized to enter into a contract with a
13 real property broker to market the Lakewood Property for sale using ordinary and customary
14 methods for the sale of the property and pursuant to which the broker will be paid an ordinary and
9 of Los Angeles, State of California, as per map recorded in
6 authorized to sell, at private sale and subject to future confirmation by the Court, the Lakewood
7 Property, which is legally described as:
8 Lot 1 of Tract No. 17487, in the city of Lakewood, County
Pursuant to the Lakewood Sale Order, among other things the Receiver was 7. 5
1 Under the Long Beach Sale Order, the Receiver was also authorized to enter into a contract with a
2 real property broker to market the Long Beach Property for sale using ordinary and customary
3 methods for the sale of the property and pursuant to which the broker will be paid an ordinary and
4 customary brokerage commission upon a completed sale of the property.
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DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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22 the Long Beach Property from early October through early December. Four private showings
23 were held between October 11, 2019 and December 1, 2019. Four open houses were held in
24 November. The property was featured on three brokers tours in November. Over 30 agents
25 viewed the Long Beach Property, who shared the listing with over 8,400 prospective purchasers.
26 The home also was promoted across Fasnacht's numerous social media platforms.
Coldwell Banker Coastal Alliance, through Fasnacht, took several steps to market 10. 21
20 estate.
12 Coastal Alliance was selected to be the listing agent. She was selected because of her extensive
13 experience and knowledge of the neighborhood. Fasnacht, along with her group of agents (the
14 "Team Fasnacht Realty Group") is a very active listing agent in the neighborhood. Fasnacht
15 agreed to a 5% sales commission. The Receiver obtained two thorough and comprehensive
16 comparative market analyses from Fasnacht, one in November 2018 and one in July 2019. The
17 latter analysis suggested that the upper end of value of the Long Beach Property was $1,295,000.
18 In consultation with Fasnacht, the Receiver determined to list the property for sale at that amount
19 in early October, once it was determined that a sale would generate value for the receivership
After evaluating potential real estate firms, Helene Fasnacht of Coldwell Banker 9.
7 liens which encumber the property, there was no meaningful equity for the receivership estate
8 unless one of the lienholders agreed to accept a discounted payoff amount. As described below,
9 the second trust deed holder has agreed to accept a discounted payoff, which has enabled the
10 Receiver to market and sell the property to generate proceeds for the receivership estate.
5 was poorly maintained, in poor condition and evidenced several years of neglect and clutter.
6 Based on the estimated market value at the time it was vacated, and the balances owed on the two
4 side and front of the Long Beach Property tend to experience a high flow of traffic. The home
2 while having attractive architecture and located in a nice neighborhood, provided several
3 challenges to the Receiver. It backs onto retail properties on a main street. Two streets to the
and once after the property was vacated, on September 14, 2019. The Long Beach Property,
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ATTOKNl-:YS AT LAW
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DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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buyer's $18,000 credit, it is anticipated that the receivership estate will be paid approximately
secured liens, pro-rated taxes, costs of sale (including the sales commission) and deducting the
principal amount of the loan, in full satisfaction of the Wall lien. After payment of the two
expense of foreclosing on the Long Beach Property and then attempting to resell it. I reached an
agreement with Mr. Wall pursuant to which he agreed to accept $200,000, one-half of the
secure a loan Pedersen obtained in August 2017, shortly before the inception of the receivership,
at a time Pedersen was in desperate need of cash to forestall the impending collapse of her Ponzi
scheme. The Receiver understands that Wall did not want to be burdened with the effort and
trust in favor of JP Morgan Chase Bank, N.A ("Chase") and a second deed of trust in favor of the
Loren and Carol Wall Family Trust ("Wall"). It is anticipated that Chase's balance at closing will
be approximately $765,000. The Wall lien has a face amount of $400,000 and was entered into to
12. There are two voluntary secured debts on the Long Beach Property: a first deed of
Exhibit 1.
"Long Beach Purchase Agreement"), a true and correct copy of which is attached hereto as
Multiple Counter Offer No. 1 together with the Addendum No. 1, Additional Terms and As-Is
Purchase Addendum, Buyer Counter Offer No. 1 and Request for Repair No. 1 (collectively, the
7 offer. The Receiver accepted this offer. Eventually, subject to providing an $18,000 buyer's
8 credit for necessary repairs, all contingencies were removed on January 8, 2020 and the Long
9 Beach Buyer's $25,000 earnest money deposit has become non-refundable. The Long Beach
10 Buyer is a non-insider, arm's length purchaser. The sale contract with the Long Beach Buyer is
11 set forth in the California Residential Purchase Agreement and Joint Escrow Instructions, Seller
6 value and the Receiver's asking price. None of the other initial offerors countered the Receiver's
11. These efforts led to multiple offers for the Long Beach Property. In response, the
2 Receiver prepared and disseminated through Fasnacht its Seller Multiple Counter Offer No. 1
3 detailing various requirements of the Receiver and maintaining the $1,295,000 asking price. In
4 response, one of the offerors, Hector J. Gutierrez and Ricardo Pulido ("Long Beach Buyer")
5 increased their offer significantly, to $1,230,000, which was only 5% below the upper end of
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DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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25 days. Its marketing efforts included 28 private showings, marketing links through at least 12
26 different websites resulting in 9,765 online views and the dissemination of 5,700 flyers. In
27 response, the Receiver obtained four offers for the Lakewood Property. While three of the
REMAX College Park Realty, through Kelly Evans, listed the property for 87 15. 24
17 Additionally, Kelly Evans agreed to lower the real estate commission from 6% to 5%. Kelly and
18 Kathy Evans provided the Receiver two comprehensive comparative market analyses, one in
19 November 2~18 and one in October 2019. The first analysis suggested that a significant amount
20 of remodel and repair work was needed to maximize the value of the property. The second
21 analysis suggested that, given comparable sales, a listing price of $649,900 was appropriate. In
22 consultation with Kelly Evans, the Receiver determined to list the property for sale at that amount
23 in late October.
9 November 13, 2018 and July 1, 2019. The home is a modest, tract home in a nice area. After
10 evaluating potential real estate firms, the Receiver selected Kelly Evans (no relation to Robb
11 Evans) of REMAX College Park Realty to be the listing agent. Kelly Evans and her listing team
12 (including her mother, Kathy Evans) are extensively involved in marketing and selling real
13 property throughout the Lakewood Property's neighborhood. The "Evans Team" has over 30
14 years of experience selling homes in the area, specializing in those built by the developer of the
15 Lakewood Property. Andrew Pedersen indicated to the Receiver's representative that he was
16 pleased the Receiver was using a realtor with extensive experience in the neighborhood.
The Receiver's staff inspected the Lakewood Property on two occasions, on 14. 8
3 million in Pederson's Ponzi scheme, based largely on a payment of $12.7 million to Pederson in
4 January 2015, which fueled the Ponzi scheme until it collapsed. The Receiver will propose, as
5 part of any future claims allowance and payment process, that the first $200,000 of receivership
6 estate funds available for claimants be paid to Wall in light of Mr. Wall's agreement to accept a
7 discounted payoff of his lien on the Long Beach Property.
Wall, designated as Investor 27 in the Receiver's First Report, also lost over $12.8 13. 2
$173,000 from the Long Beach Property sale.
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DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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20 challenges to the Receiver. The Long Beach Property was in need of extensive deferred
21 maintenance and has two lienholders. Until Wall agreed to accept a reduced payoff, there was no
22 equity in the Long Beach Property for the receivership estate. Pedersen was uncooperative and
23 uncommunicative with the Receiver throughout this process. The Lakewood Property is jointly
24 owned and remained occupied by Andrew Pedersen throughout the sale process, which required
25 24-hour notification before gaining access for the purpose of showing the property to other real
26 estate agents and prospective buyers. Despite these challenges, the Receiver obtained a sale at
27 just 5% below a full value list price for the Long Beach Property and slightly above a full value
The Long Beach Property and Lakewood Property have each posed unique 17. 19
12 Mortgage ("Wells Fargo"). Andrew Pedersen has been maintaining the monthly mortgage
13 payments to Wells Fargo and it is anticipated that its balance at closing will be approximately
14 $338,000. After payment of Wells Fargo's secured lien, pro-rated taxes, costs of sale (including
15 the sales commission) and allocating the split between the Receiver and Andrew Pedersen to
16 account for the credits in favor of Andrew Pedersen as a result of the monthly mortgage payments
17 he has been making pursuant to the Lakewood Sale Order as described above, it is anticipated that
18 the Receiver's share of net proceeds will be approximately $130,000.
There is one voluntary lien against the property in favor of Wells Fargo Home 16. 11
2 Armenta-Gomez ("Lakewood Buyer") made an offer of $650,000, which was $100 over the
3 asking price, which was accepted by the Receiver. All contingencies, including the financing
4 contingency, were removed on January 29, 2020 and the Lakewood Buyer's earnest money of
5 $10,000 has become non-refundable. The Lakewood Buyer is a non-insider, arm's length
6 purchaser. The sale contract with the Lakewood Buyer is set forth in the California Residential
7 Purchase Agreement and Joint Escrow Instructions, Seller Counter Offer No. 1 together with the
8 Addendum No. 1, As-Is Purchase Addendum and Additional Terms, and Contingency Removal
9 No. 2 (collectively, the "Lakewood Purchase Agreement"), a true and correct copy of which is
10 attached hereto as Exhibit 2.
offerors did not take steps to counter the Receiver's counter offers, Ricardo Pena and Nereyda
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Los ANC.F.I.ES
DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER MODIFYING ORDER APPOINTING A RECEIVER AND AUTHORIZING RECEIVER TO SELL REAL PROPERTY OF ESTATE
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list price for the Lakewood Property. All contingencies have been removed on both properties
and there are sufficient sale proceeds to pay all lienholders, with Wall agreeing to accept a
payment of one-half the principal balance in full satisfaction of the second lien on the Long
Beach Property. Both properties will generate net proceeds for the benefit of the receivership
estate. Based on all of these factors, I believe that both of these sales represent an excellent result
for the receivership estate and that the sales should be confirmed.
I declare under penalty of perjury that the foregoing is true and correct and that this
declaration was executed on February !i_, 2020 at Sun Valley, California.
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