RECEIVERSHIP APublicationofthe CaliforniaReceiversForum … · APublicationofthe...
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Spring 2010 • Issue 36 A Publication of the California Receivers Forum R ECEIVERSHIP I n s i d e 16 Ask the Receiver 12 ONE RECEIVER’S PERSPECTIVE Examining the Nuts and Bolts of a Business Turnaround 18 PROFESSIONAL PROFILE Richard Ormond’s Journey to Receivership Law: Swift and Exceptionally Rewarding 17 WORD TO THE WISE DEPT. How and Why to Avoid Jury Trial of Claims Against a Receiver or a Receivership Estate 19 The List 23 LA/OC Chapter of California Receivers Forum Presents Ask the Judges Program for SoCal Bar NEWS Though the names in the headlines change, the scenario is all too familiar to regulatory receivers and their counsel: The Securities and Exchange Commission or other regulatory agency brings expedited proceedings in federal court with allegations of massive fraud, requests for an asset freeze and the appointment of a receiver to take over an enterprise in some stage of disarray. Indeed, with the embarrassment of having overlooked the Madoff affair still smarting at the SEC, that agency will likely be bringing an increasing number of such actions, and there is no reason to believe that other agencies such as the FTC and CFTC won’t be following suit in the current climate. That raises the prospect for an increase in receiverships, and with that increase, a greater number of tough questions about clawbacks and related issues. Ted Phelps is a man with many interests quite apart from his successful Los Angeles receivership practice PCG Consultants, which features special expertise in forensic investigation. When not tracing and recovering assets for financial institution clients or operating businesses as a court-appointed receiver – most recently liquidating a string of auto dealerships in Las Vegas under the aegis of the Clark County District Court – Ted may be spending time at top dive spots around the world. From Truk Lagoon to the Florida Keys, Ted might be the guy in the neoprene suit next to you. CSULA Students Learn to Sniff Out Fraud In Accounting Class Sponsored/Taught by PCG Consultants Continued on page 5... Continued on page 3... LOYOLA IV IS COMING NEXT YEAR! Check out the Publisher’s Comments column on page 2 for first details of the new format and location of the planned three-day seminar on virtually all aspects of receiverships, to be presented by the California Receivers Forum in conjunction with Loyola Law School of Los Angeles. LA Receiver Firm Steps Into Classroom Max Liphart of Ted Phelp’s PCG Consultants explains expert fraud detection techniques to CSULA’s accounting students in the jointly- developed class. Regulatory Receiverships Fraud Case Receiver’s Recovery of Ponzi Profits: An Update on Clawback Recovery Actions BY :NICK MORGAN,ESQ. AND NICK PUJJI,ESQ.*
Transcript of RECEIVERSHIP APublicationofthe CaliforniaReceiversForum … · APublicationofthe...
Spring 2010 • Issue 36
A Publication of the
California Receivers Forum
RECEIVERSHIP
I n s i d e
16 Ask the Receiver
12ONE RECEIVER’S
PERSPECTIVE
Examining the Nuts
and Bolts of a
Business Turnaround
18
PROFESSIONAL PROFILE
Richard Ormond’s
Journey to
Receivership Law:
Swift and
Exceptionally
Rewarding
17WORD TO THE WISE DEPT.
How and Why to Avoid
Jury Trial of Claims
Against a Receiver or a
Receivership Estate
19 The List
23LA/OC Chapter of
California Receivers
Forum Presents Ask
the Judges Program
for SoCal Bar
NEWS
Though the names in the headlines change, the scenario isall too familiar to regulatory receivers and their counsel: TheSecurities and Exchange Commission or other regulatory agencybrings expedited proceedings in federal court with allegations ofmassive fraud, requests for an asset freeze and the appointmentof a receiver to take over an enterprise in some stage of disarray.
Indeed, with the embarrassment of having overlooked theMadoff affair still smarting at the SEC, that agency will likelybe bringing an increasing number of such actions, and there isno reason to believe that other agencies such as the FTC andCFTC won’t be following suit in the current climate. Thatraises the prospect for an increase in receiverships, and withthat increase, a greater number of tough questions aboutclawbacks and related issues.
Ted Phelps is a man with many interests quiteapart from his successful Los Angeles receivershippractice PCG Consultants, which features specialexpertise in forensic investigation. When not tracingand recovering assets for financial institution clientsor operating businesses as a court-appointed receiver –most recently liquidating a string of auto dealershipsin Las Vegas under the aegis of the Clark CountyDistrict Court – Ted may be spending time at topdive spots around the world. From Truk Lagoon tothe Florida Keys, Ted might be the guy in theneoprene suit next to you.
CSULA Students Learnto Sniff Out Fraud InAccounting ClassSponsored/Taught byPCG Consultants
Continued on page 5...
Continued on page 3...
LOYOLA IVIS COMING
NEXT YEAR!
Check out the Publisher’sComments column onpage 2 for first details ofthe new format andlocation of the plannedthree-day seminar onvirtually all aspects ofreceiverships, to bepresented by the CaliforniaReceivers Forum inconjunction with LoyolaLaw School of LosAngeles.
LA Receiver Firm Steps Into Classroom
Max Liphart of Ted Phelp’s PCG Consultantsexplains expert fraud detection techniques toCSULA’s accounting students in the jointly-developed class.
Regulatory Receiverships
Fraud Case Receiver’s Recovery ofPonzi Profits: An Update on ClawbackRecovery ActionsBY: NICK MORGAN, ESQ. AND NICK PUJJI, ESQ.*
I am pleased to announce thatLoyola IV is in the works. The datefor the 2.5 day comprehensive seminaron the A-Z of Receiverships will beJanuary 20 – 22, 2011; the venue isthe Los Angeles Convention Centeron Figueroa Street next to LA Live.Loyola Law School will continue toserve as our academic sponsor eventhough we have outgrown thefacilities on the law school campus.We anticipate having an increasednumber of Loyola faculty membersspeak at this upcoming conference.
The venue is not the only change.The format of the program has beenexpanded in two important ways.First, on Thursday starting at aroundnoon, there will be a half-day sessionfor administrators. This is for areceiver’s administrative staff andbrand new receivers who desire tolearn administration basics.
We perceive that this is animportant hands-on tutorial regardingthe administration support for thesuccessful receiver. Secondly, theFriday program will cover the legalauthority for receivers, an overview ofthe different types of receivers,procedural aspects, rights, risks andcompensation.
The Saturday program will offertwo tracks. One track emphasizesadvanced real estate, operatingcompanies, and regulatory receiver-ships and is geared to experiencedreceivers and the other track is anexpanded discussion of rents andprofits receiverships and all of thespecialty real estate applications suchas substandard housing, sale of multi-family units, and some of the nuancesof completing construction. TheSaturday sessions are designed toprovide more emphasis for receivers intheir preferred area of interest.
An important expansion in LoyolaIV will be an increase in the numberof judges who are invited to
participate on panels and provide thisimportant input for both new andexperienced receivers. Aside fromprocedural content of the course,direct judicial input is perhaps themost important aspect of this trainingprogram.
As with Loyola I, II and III, therewill be ample socializing andnetworking opportunities for theparticipants – an opportunity to meetand speak with other receivers,lawyers, judges, accountants,administrators and those who provideservices for receivers. It is ourexperience that this is one of the keyside benefits of the two and one halfday program.
By all accounts, the demand forreceivers continues high and in somesectors, unprecedented. Consistentwith this, the demand for informationregarding receivers also continueshigh, according to Jeanne Sleeper ofJBS & Associates which administersthe California Receivers Forum (andwhose office takes the calls).Therefore we anticipate a largeturnout for Loyola IV. Within thenext month or so, registrationinformation will be available on theweb site (www.receivers.org) and willbe mailed to members of theCalifornia Receivers Forum. Staytuned.
Receivership News
Published byCalifornia Receivers Forum
954 La Mirada St.Laguna Beach, CA 92651
949.497.3673 x 200www.Receivers.org
PublisherRobert P. Mosier
EditorKirk S. Rense, Editor
[email protected] Collins, CPA
Associate Editor
Associate PublishersKenton Johnson
Beverly McFarlandRon Oliner
Rob Warren, III
Contributing ColumnistsAlan Mirman
Heard in the HallsPeter DavidsonAsk the Receiver
OfficersRon Oliner, Chair
Robert Mosier, Chair ElectJames Lowe, Treasurer
Nancy Hotchkiss, SecretaryGordon Dunfee, Projects Director
Receivership News is publishedquarterly by the CaliforniaReceivers Forum, a not-for-profitassociation. Articles in thispublication express the opinionsof their authors and do notnecessarily reflect the views of thedirectors, officers or members ofthe California Receivers Forum.Articles are intended as a sourceof general information and shouldnot be construed as specific advicewithout further inquiry and/orconsultation with professionalcounsel.
© copyright 2010California Receivers Forum
All rights reserved.
Publisher’s CommentsBY ROBERT MOSIER, PUBLISHER*
Robert P. Mosier
*Robert P. Mosier is aSouthern California trusteeand receiver and principalof Mosier & Company,Inc., a firm that hasspecialized in managingand turning aroundtroubled companies formore than 25 years.
Mr. Rense is a lawyerspecializing in insolvencyand in representing court-appointed fiduciaries, withmore than 20 years'experience. Kirk is aCalifornia ReceiversForum, LA/OC ChapterBoard Member.
Kirk Rense, Esq.
Page 2 • Spring 2010
Spring 2010 • Page 3
Continued from page 1.
“Clawback” Recovery Actions...
Time for Payback?It’s not hard to imagine the following circumstances: An
investor places money with a company purporting to arbitrageinternational postal coupons. Over a period of several years, shereceives interest payments like clockwork at the promised rateof return.
Then an investigative reporter publishes an articlequestioning the company’s bona fides. Investors scramble topull out their money. Luckily, our investor retrieves hermoney before the enterprise collapses. On balance, she feelsthat she fared well, having recovered her initial investmentback as well as collecting years of interest payments. But thena trustee demands that she return those profits and herprincipal. This scenario, which could have been taken fromtoday’s headlines, is not entirely fictional; it derives from aU.S. Supreme Court case involving one of America’s mostfamous flim-flam artists: Charles Ponzi (Cunningham v. Brown,265 U.S. 1, 13 (1924)).
“More than 80 years later the lawhasn’t changed much.”
More than 80 years later the law hasn’t changed much.InJuly 2008, the Ninth Circuit described the plight of RobertKowell, an investor who received 20 percent returns every 90days “risk free” from a business that purported to provideworking capital to a latex glove manufacturer in Malaysia.Long after Kowell had spent his gains, he received a letter froma court-appointed receiver demanding that he return $69,546 in“profits” or face a lawsuit (Donell v. Kowell, 533 F.3d 762 (9thCir. 2008)). Such “clawback” demands and relatedcontroversies have only increased as the number of SECreceiverships rises.
Fraudulent ConveyancesSEC receivers have a number of tools at their disposal forreclaiming money repaid to investors by a fraudulententerprise. If the business is in bankruptcy, fraudulent-conveyance claims may be brought under the BankruptcyCode. (See In re Bayou Group, LLC, 362 B.R. 624, 632 (Bankr.S.D.N.Y. 2007).) Indeed, the trustee may require investors toreturn fictitious profits, as well as the original principal, unlessthey can prove they gave value or acted in good faith inreceiving the transfer. (See SEC v. Forte, Nos. 09-63, 09-64,2009 WL 4809804 (E.D. Pa. December 15, 2009).)
In addition, whether or not a bankruptcy proceeding ispending, in most states (including California) an SEC receivermay employ a version of the Uniform Fraudulent Transfer Act(UFTA). Actions under the UFTA (Cal. Civil Code §§3439–3439.12) against innocent investors generally arelimited to recovery of fictitious profits (Donell, 533 F.3d at770) [Ed. Note: California law allows up to a seven-year reach-back depending upon facts of the case.]
As Judge Richard Posner explained in Scholes v. Lehmann (56F.3d 750, 755 (7th Cir. 1995)), an investor fortunate enough to
have received fictitious profits “should not be permitted tobenefit from a fraud [at the expense of other investors] merelybecause he was not himself to blame for the fraud. All he isbeing asked to do is to return the net profits of his investment—the difference between what he put in at the beginning and whathe had at the end.” (Scholes, 56 F.3d at 757–758.)
DisgorgementFinally, an SEC receiver has the power to simply move for
disgorgement against third parties holding assets transferred tothem by defendants in the underlying SEC enforcement action(SEC v. Wencke, 783 F.2d 829 (9th Cir. 1986)).Disgorgement proceedings are summary in nature and arisefrom the courts’ equitable powers under federal securities lawsto prevent the dissipation of assets and allow for the recoveryof diverted assets.
Another common strategy is for receivers to recover fundsby naming victim-investors as “relief defendants,” or “nominaldefendants,” in an action. (See Janvey v. Adams, Alguire, et al.,Nos. 09-10761, 09-10765 (5th Cir.) (ancillary actions toStanford Int’l Bank, Ltd., No 3-09-0298-N (N.D. Tex.)).) A
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relief defendant is not accused of wrongdoing, but a federalcourt may order equitable relief against such an individualwhere that individual (1) has received ill-gotten funds, and (2)does not have a legitimate claim to those funds. (SEC v.Colello, 139 F.3d 674, 677 (9th Cir. 1998).)
These proceedings may allow a receiver to claw-back boththe profits and original principal invested by investors, quicklyturning into true victims of the scheme those lucky enough tohave received temporary profits. (See SEC v. George, 426 F.3d786, 798-99 (6th Cir. 2005) (ordering winning investors toreturn profits and principal); Forte, Nos. 09-63, 09-64, 2009 WL4809804, at *6 (acknowledging statutory and case law supportfor a receiver’s recovery of both profits and principal frominvestors).)
As the Ninth Circuit has noted, “Ponzi schemes leave notrue winners once the scheme collapses—even the winners weredefrauded, because their returns were illusory.” (Donell, 553 F.3dat 779.)
Although clawbacks from defrauded investors may seemharsh, the process is designed to achieve an equitable result inwhich no single investor shoulders a disproportionate share ofthe damage inflicted by the underlying fraud. In other words,each investor is made to feel the pain.
Oftentimes, investors feel relieved or reassured once theybegin receiving interest payments on that investment in a foreigncurrency exchange firm, yet two years down the road they may beforced to pay back, not only the interest they “earned”, but theirown principal investment. Receivers and their counsel should beaware of the various strategies and pitfalls that await theirattempts to clawback such principal and profits.
* Nick Morgan, Esq. is a partner in DLAPiper LLP’s Los Angeles office, and specializesin complex securities litigation matters, with aspecial emphasis on the representationof issuers, officers and directors, investmentfunds, analysts, brokers, and receivers inconnection with Securities and ExchangeCommission and Financial Industry RegulatoryAuthority litigation.
*Nick Pujji, Esq. is an associate in DLA PiperLLP’s Los Angeles office, and specializesin employment, securities, and general litigationmatters.
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“Clawback” Recovery Actions...
Page 4 • Spring 2010
Nick Morgan, Esq.
Nick Pujji, Esq.
Spring 2010 • Page 5
Ted has just added yet another facet to his interests professionaland personal, however. This spring he and his staff have sponsoredand are teaching a one-of-a-kind, case-based advanced forensicaccounting class for California State University at Los Angeles’outstanding Accounting Department. Officials at the school haveworked closely with PCG Consultants to tailor the program to meetstudent needs.
The University’s Accounting Department Chair GregKunkel had the idea for the class, and Dan Ryan, a CSULA professorand ATFE agent, spearheaded the development effort.
Mr. Ryan, University Professor Kathryn Hansen, Ph.D., and PCGConsultants’ Max P. Liphart, Sarah Carson and Cindy Park spent ayear preparing the course curriculum and materials, primarilyunderwritten by Ted Phelps’ PCG Consultants. Mr. Ryan, Mr.Liphart, Ms Carson and Ms Park are the principal instructors for the12-week course. As an added bonus, an entire class devoted tocomputer forensics was taught by Manfred Hatzberger of the Pasadenafirm Guidance Software, Inc.
“This class offers students an inside look at how real fraudcases are investigated” said Mr. Liphart, a CPA and director ofoperations for Ted at PCG Consultants. “Students already get plentyof theory in other courses; this class uses actual cases and documentsworked by PCG to teach the students how investigations are donein the nitty gritty world of forensic accounting and fraudinvestigations,“ Mr. Liphart added.
Ted said he is delighted to be a part of such a valuable addition tothe University’s curriculum:
“We are extremely pleased to take part in this program and helpeducate the next generation of forensic accountants andinvestigators. Understanding the intricacies of fraud andembezzlement and how it is properly investigated is essential ifaccountants, fraud examiners and investigators areto adequately prevent and detect these crimes that cost Americanbusiness billions of dollars each year,“ he said.
CurriculumThe nefarious doings of less-than-ethical business people are the
meat and potatoes of the course. A recent class gave students a start-to-finish overview of a forensic accounting assignment.
Students first explored the nature of a fraud engagement – goals andchallenges – followed by discussion of a sample proposal and overviewof the detailed planning necessary before undertaking an assignment.
Real documents with redacted identifying information were thenused to take students step-by-step through (a) how to locate pertinentdocuments, (b) how to detect early indications of intent to commitfraud in billing, shipping and accounting records, and (c) how tocorrelate companion or sequential documents to detect falsification ofquantities and dollar amounts.
“Knowing enough about the targetbusiness to identify the best persons tointerview and most productive line ofinquiry to follow takes time and planning,”Ted said. “The students learn that thescope of available materials and the type ofapparent fraudulent scheme present shapethe investigation and interviewingprocess.”
Typical fraudulent schemes includemanipulating accounts receivable aging(or re-invoicing older invoices), factoringschemes to over-qualify invoices for advances, or simply over-pricinggoods on invoices to be factored.
“The documents we use as examples from real cases (withidentifying information redacted) are eye-openers of either howsophisticatedly or how crudely a fraud can be perpetrated,” Mr.Liphart said.
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Ted Phelps Class...
Please contact: LORA WONGSenior Vice President, Division Manager
213.362.5288 [email protected]
ONE MASTER FIDUCIARY SIGNATURE CARD AND A DEDICATED RELATIONSHIP BANKER TO ASSIST YOU WITH EVERY STEP ALONG THE WAY
Curriculum lecture duties are shared by (among others) Cindy Park and Sarah Carsonof PCG Consultants and Manfred Hatzberger of Guidance Software, Inc. (L-R).
Ted Phelps
Continued on page 7...
“Sometimes it is almost comical, as when a draft invoice is foundwith a handwritten notation that all invoiced sums ‘need to beinflated.’ A $31,000 invoice can become a $96,000 invoice with a fewkeystrokes in an ethical vacuum,” he added.
Kickbacks are another fertile area of investigation. Principalvendors are generally happy to receive substantial overpayments ifallowed to retain a portion of the overpayment while returningthe bulk of the amount under the table, Ted commented.
“I like to think that PCG Consultants and I are doing ourpart in grooming the next generation of forensic accountants,and are giving a little back to the community at the same time,”he said.
CSULA’s J. Gregory Kunkel, Chair of the Department ofAccounting in the College of Business and Economics, praisedthe efforts of Ted Phelps and his team:
“On behalf of the students and faculty of the Department ofAccounting at California State University, Los Angeles, I want tothank you and your team of consultants for teaching our Case Studiesin Forensic Accounting course. Your consultants were able to bringknowledge and real world experience to the classroom that was muchappreciated by our students. Some of our best students remarked thatit was the best accounting class they had ever taken at Cal State LosAngeles!
“I know that your firm devoted a lot of time to make this class asuccess. Your willingness to give back to the Los Angeles communityis exemplary. You and your team of PCG Consultants have had apositive impact on the lives and careers of the next generation offorensic accountants.”
Spring 2010 • Page 7
Continued from page 5.
Ted Phelps Class...
Marc Brooks, Executive Vice [email protected]
Phone: (866) 689-6823 Fax: (866) 689-6824
MARAEscrow is proud to be acting as the EscrowAgent for many Receiverswho are currently in active sales, marketing and closings.
It’s been said that closing individual condominium units to retail Buyers in a Subdivision is difficult if notimpossible. Not true, if you have the right team in place.
Recently, in a Broken Condo Project in Reno, Nevada the team at MARA Escrow orchestrated and closed anindividual unit to a Buyer within 24 Hours of receipt of a contract and a second unit to another Buyer withwithin 48 Hours of receipt of contract.
0is substantially added to my value as a Receiver and also gave me the peace of mind that things will be done right.Mara Escrow gives me the comfort to know that if issues arise Mara will find a solution and make it seemless.
— MarkWeinstein, Receiver
MARA Escrow has sold over 50,000 Subdivision Units in over 2,500 Subdivision Projects.
MARA Escrow has closed over $500,000,000.00 in Real Property Assets conveyed under Receivership.
We are actively completing due diligence on many other For Sale Housing Projects.
The class in advanced forensic accounting was quickly filled up by CSULA’saccounting students. The largely commuter school is widely-known for the diversityand dedication to academics of its student body and its range of educational programs.CSULA offers both bachelors and master’s degrees in accounting and accountancy.
Barton Stern, CPMVentura Investment Co.
Tel: 805-484-0477
Is pleased to announce
his appointment as
Rents & Profits Receiver fora 170 Unit Apartment Complex
Prudential Mortgage Capital, LLCv. Cre9, LLC
Superior Court of CaliforniaCounty of Ventura
Howard M. EhrenbergSulmeyerKupetz, APC
Tel: 213-626-2311
is pleased to announce
the completion of his duties as
Receiver for
Zamora Investments, Inc.
Superior Court of California
County of Los Angeles
North Valley District
Gordon E. Dunfee, Esq
Tel: 858-456-7111
is pleased to announce
his appointment as
Rents and Profits Receiver for DCR
Mortgage v. Pen Holdings, LLC
Yuma County Superior Court
State of Arizona
Robb Evans & Associates LLC
Tel: 818-768-8100
is pleased to announce
its appointment as
Receiver of National Credit
Acceptance, Inc.
Superior Court of California
County of Sacramento
Robb EvansRobb Evans & Associates LLC
Tel: 818-768-8100
is pleased to announcehis appointment as
Special Master in the matter ofUnited States of America v.
$6,874,561.25 in Funds from SixWells Fargo Bank Accounts, et al.
U.S. District CourtCentral District of California
Western Division
Robb EvansRobb Evans & Associates LLC
Tel: 818-768-8100
is pleased to announcehis appointment as
Dissolution Trustee of LandAmericaFinancial Group, Inc., et al. of a bankholding company and other assets
in Chapter 11 proceedings
U. S. Bankruptcy CourtEastern District of Virginia
J. Benjamin McGrew, CPM, CCIMTel: 916-482-5100 ext 15
is pleased to announcehis appointment as
Rents and Profits Receiver for WellsFargo Bank v. Kobra PropertiesA $233,000,000 Loan Portfolioconsisting of 21 Office and Retail
Building and Commercial &Residential Land.
Superior Court of CaliforniaCounty of Placer
J. Benjamin McGrew, CPM, CCIMTel: 916-482-5100 ext 15
is pleased to announcehis appointment as
Rents & Profits Receiver for PacificHorizon Mortgage Investors v. LucidiFamily Limited Partnership. Class
“A” Equestrian Facility.
Superior Court of CaliforniaCounty of San Diego
Central Division
James GranbyFerris & Britton
Tel: 760-484-0687
is pleased to announce
his appointment as
Rents & Profits Receiver for
California Beach House Hotel
Superior Court of California
County of Los Angeles
Page 8 • Spring 2010
Joseph S. YarmanThe Real Estate Group
Tel: 310-500-2840x202
is pleased to announce
his appointment as
Rents & Profits Receiver for Retail
Shopping Center, Los Angeles,
California
Superior Court of California
County of Los Angeles
Robert E. StensonEquassure, Inc.
Tel: 310-355-9350
is pleased to announce
the completion of his duties as
Rents & Profits Receiver for Pecos
Commerce Center, LLC
Superior Court
Maricopa County, Arizona
Robert E. Stenson
Equassure, Inc.
Tel: 310-355-9350
is pleased to announce
his appointment as
Equity Receiver for
Ennis Homes, Inc. – Silver Springs
Superior Court of California
County of Fresno
Thomas C. HebrankHebrank Consulting
Tel: 619-400-4922
is pleased to announce
the completion of his duties as
Rents & Profits Receiver for
Blu Water Crossing mixed use
development in Carlsbad, CA
Superior Court of California
County of San Diego
Jane F. HoffnerBascom Portfolio Advisors
Tel: 949-955-2994
is pleased to announce
her appointment as
Rents & Profits Receiver for
Trioaks, LLC a retail property
in Van Nuys, CA
Superior Court of California
County of Los Angeles
Patrick GalentineCoreland Companies
Tel: 714-573-7780
is pleased to announce
his appointment as
Rents & Profits Receiver for
U.S. Bank National vs. Doheny V, LLC
Superior Court of California
County of Mono
Patrick GalentineCoreland Companies
Tel: 714-573-7780
is pleased to announce
his appointment as
Rents & Profits Receiver for
Riverside Village, LLC
vs. Univillage, L.P.
Superior Court of CaliforniaCounty of Riverside
Thomas C. HebrankHebrank ConsultingTel: 619-400-4922
is pleased to announcehis appointment as
Operating Company Receiver forSunshine Communities AssistedLiving Facilities in Los Angeles
Superior Court of CaliforniaCounty of Ventura
Patrick GalentineCoreland Companies
Tel: 714-573-7780
is pleased to announce
his appointment as
Rents & Profits Receiver for
GE vs. Tampa Plaza Partners, LLC
Superior Court of California
County of Los Angeles
Spring 2010 • Page 9
Stephen J. DonellFedReceiver
Tel: 310-207-8481
is pleased to announcehis appointment as
Rents & Profits Receiver for a105,000 sf Office Building
Jefferson-Pilot Investments, Inc v.Cranbrook Realty Investment Fund
Superior Court of CaliforniaCounty of Alameda
Stephen J. DonellFedReceiver
Tel: 310-207-8481
is pleased to announce
his appointment as
Equity Receiver forGJB Enterprises, Inc. et al
LBS Fund, LP v. GJB Enterprises, Inc.et al
Superior Court of CaliforniaCounty of Los Angeles
West District
Stephen J. DonellFedReceiver
Tel: 310-207-8481
is pleased to announce
his appointment as
Securities & Exchange CommissionRegulatory Receivership for
The Premium Return Fund UnlimitedSEC v. The Premium Return
Fund LLP et al.
US District CourtSouthern District of California
Stephen J. DonellFedReceiver
Tel: 310-207-8481
is pleased to announcehis appointment as
Securities & Exchange CommissionRegulatory Receivership for USARetirement Management Services
SEC v. USA Retirement et al.
US District CourtCentral District of California
Stephen J. DonellFedReceiver
Tel: 310-207-8481
is pleased to announcehis appointment as
Securities & Exchange CommissionRegulatory Receivership for Learn
Waterhouse Inc.SEC v. Learn Waterhouse Inc.
US District CourtSouthern District of California
James H. DonellFedReceiver
Tel: 310-207-8481
is pleased to announcehis appointment as
Securities & Exchange CommissionRegulatory Receivership for
Lincoln Funds et al.SEC v. Lincoln Funds International,
Inc. et al.
US District CourtCentral District of California
James H. DonellFedReceiver
Tel: 310-207-8481
is pleased to announcehis appointment as
Securities & Exchange CommissionRegulatory Receivership for
Newpoint FinancialSEC v. Newpoint Financial Services
Inc. et al.
US District CourtCentral District of California
James H. DonellFedReceiver
Tel: 310-207-8481
is pleased to announce
his appointment as
Construction Completion Receiverfor 24 Town Homes
Chinatrust Bank v. SovereignProperties et al.
Superior Court of CaliforniaCounty of Los AngelesSouthwest District
James H. DonellFedReceiver
Tel: 310-207-8481
is pleased to announce
the completion of his duties as
Rents & Profits Receiver fora 240 unit apartment complex.ORIX Capital Markets, LLC v.Newport Cove East, LLC et al.
Eight Judicial CourtClark County, Nevada
Page 10 • Spring 2010
De’Ann ClarkTREO
Tel: 949-951-1000
is pleased to announceher appointment as
Rents & Profits Receiver for MixedUse Retail, Commercial,
Manufacturing & ApartmentBuildings.
Broadway Federal Bank v. Jervis
Superior Court of CaliforniaCounty of Los Angeles
William J. HoffmanTrigild, Inc.
Tel: 858-720-6700
is pleased to announce
his appointment as
Rents & Profits Receiver
for Suites Properties LLC
District Court
Clark County, Nevada
William J. HoffmanTrigild, Inc.
Tel: 858-720-6700
is pleased to announce
his appointment as
Rents & Profits Receiver for
MCC/I&G Viad Office Tower
Owner LLC
Superior Court
Maricopa County, AZ
Peter J. Doumani
Tel: 310-278-6667
is pleased to announce
the completion of his duties as
Operating Company Receiver for
Morgan Creek Golf Country Club
Superior Court of California
County of Placer
Peter J. Doumani
Tel: 310-278-6667
is pleased to announce
the completion of his duties as
Operating Company Receiver for
Beach Plaza Hotel
Superior Court of California
County of Los Angeles
Robert C. Warren III
Investors’ Property Services
Tel: 949-900-6161
is pleased to announce
his appointment as
Rents & Profits Receiver for
Cobblestone Creek
Sixth Judicial District, Idaho
Robert P. MosierMosier & Company, Inc.Tel: 714 432-0800 x222
is pleased to announcehis appointment as
Receiver for SCOC in Santa ClaritaTo oversee the disposition of
a medical office buildingthat is 70% complete
Superior Court of CaliforniaCounty of Los Angeles,Chatsworth Divisiion
Robert P. MosierMosier & Company, Inc.
Tel: 714 432-0800 x222
is pleased to announce
his appointment as
Receiver for
Millennium Garage Doors
A corporate dissolution and windup
Superior Court of California
County of Riverside
Robert P. MosierMosier & Company, Inc.Tel: 714 432-0800 x222
is pleased to announcehis appointment as
Criminal Court Receiver forPetronella Roofing and Related
Entities to shut down and liquidatean operation involved in Workers’Compensation Insurance fraud
Superior Court of CaliforniaCounty of Orange
Spring 2010 • Page 11
[On occasion receivers find themselves operatingcommercial structures, sometimes as a stopgap while warringparties litigate control, sometimes while secured creditors andthe debtor’s principals negotiate a workout, sometimes underother fact patterns. When they do, receivers may have anopportunity—perhaps a duty — to “turn around” a failingproperty to preserve its market value. In this article H.Michael Wyant provides tips and war stories garnered fromfifty years’ experience on how to successfully analyze andcorrect problem practices of a property in decline. Ed.]
Every property, company, department and project is different,even though one might look similar to another. Two high-riseoffice buildings in the same location built identically at the sametime may have substantially different net operating income
(NOI). The buildings may have different owners, differenttenants, different management and different financing, asexamples. But there are fundamentals basic to the beginning ofany evaluation / study.
My list of these fundamentals is the result of more than fiftyyears of solving problems. I owned my first automobile when Iwas thirteen. I remember the day the junkyard wrecker towedthat piece of steel, metal and parts into our driveway. It was a1941 Crosley with a two cylinder air-cooled engine, which hadbeen abandoned many years before.
My father made a living as an attorney, but in my opinionhe was a better mechanic and problem solver. He taught mehow to take apart every nut, bolt, electrical wire, cotter pin,piston — all the parts — and put them into labeled cigar boxes.I had to learn what each part was for, what role it played in theoverall operation of the car. I learned diligently from him andput that Crosley back together, replacing worn out or brokenparts as I did so. What a thrill it was to drive that compactvehicle around when I finished the turnaround on it.
Today, I use the same steps learned so long ago. Firstvisualize taking apart every piece of what makes up a troubledproperty and putting that part into a labeled box. Thenevaluate whether that part functions properly or needs to berepaired or replaced. Finally, if you can put it all back togetherwith repaired or replaced parts you have successfully turnedaround a problem. Certainly, the receivership process is moresophisticated, but it can be done.
FIRST STEPS: STOP, LOOK and LISTEN!STOP: Make your analysis at a specific point in time.
Why? A property, its tenants, staff, seasons of the year, outsidefactors, the economy and much more all have an effect on whatis happening in the property or business being studied. Energycosts are a huge part of the operating expenses of an officebuilding, for example. Some large utility companies changeelectricity charges four times in a year — winter rates, summerrates, phasing in of already-approved rate increases, with newrates pending. These facts need to be recognized, understoodand adjusted when comparing energy costs month-to-monthand year-to-year. Occupancy levels also must be adjusted beforemaking proper comparisons.
LOOK: Take a personal tour of all the property, makingnote of its physical condition; note everything that may affectthe property’s image and marketing. Support this with amplephotographs. This will save time preparing your written reportand also illustrate details of your recommendations.
Page 12 • Spring 2010
One Receiver’s Perspective
Examining the Nuts and Boltsof a Business TurnaroundBY: H. MICHAEL WYANT*
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Continued on page 13...
Always tour the property with the staff member responsiblefor that aspect of the property you are reviewing, whether a chiefengineer, tenant improvement coordinator, marketing specialist,property manager, security supervisor, parking supervisor,landscaping maintenance supervisor or the property’s outsidecontractors. Perform each tour separately with the appropriateperson, since each supervisor will provide more details whenothers are not around. Pay special attention to the physicalcondition, the warranties, the operating efficiencies, potentialenergy improvements and the like.
You might take a tip from former President Lyndon Johnson.When a group of people met in his office to make a presentation,President Johnson would sit back quietly in his chair with hisfinger tips together and listen to all that was said. When thegroup finished their presentation, he would ask one simplequestion, “AND?” The group would quickly respond with moreinformation than they were prepared to give in order to fill thequiet void in speaking and would produce more facts to showthey were totally familiar with what they were discussing. Afterrepeating this several times with the group, the president wouldend the session. Then he would look to his own staff – who hadbeen diligently taking notes – and request follow up investigationon all the additional information presented to set the factsstraight before making his decision.
A careful receiver should go beyond what he or she sees andwork to understand why the situation is the way it is, how long ithas been this way and what recommendations the supervisorswould make to improve the situation.
LISTEN: As with “looking,” the receiver should workbeyond what is being said in order to discover the history andspecific details of any problem issues. A part of my assignmenton a large consulting job where marketing success haddiminished was to prepare a new marketing plan. A good part ofmy compensation was tied to the success of that plan.
I spoke with everyone in the marketing department to gathertheir ideas and analyses of what plans had worked and why otherplans had not. I went into depth on some of the previousmarketing failures. When my marketing plan – a part of theoverall business plan — was implemented, sales reached threetimes the volume of previous years. I earned handsome fees onthe enhanced sales but I didn’t take credit for being a marketinggenius. I gave credit to the marketing team, to which I hadlistened intently. The owners of the project had apparentlystopped listening to their own staff!
NEXT STEPS – CONSIDER ALL FACTORSI group most critical factors under two headings: Inside
Factors and Outside Factors. Always remember to analyze thefollowing:
INSIDE FACTORS:Operations: When evaluating property management staff
members consider: are they the right people for the jobs assignedto them; do they have enough time to do the job; what hinders asuccessful operation; what are the factors to success; what is their
motivation for successfully performing their job? Don’t overlookany departments, especially engineering, accounting, parking,security, tenant improvements, landscaping maintenance, thefire/life safety team, the concierge (if the building has one).Pursue key questions with the marketing team, the leasingspecialists (and their advertising methods). Check out financingconditions, real estate tax status (recommend the owner go forreductions due to the economy, if possible), and more.
Utilities/Energy usage: Has the building been through acomplete energy analysis and, if so, were the recommendationsimplemented? I was involved in one office building that was ahuge energy hog. We brought in an engineering team toevaluate every potential for saving energy. Their list of 26 keyareas was impressive, but the payback over a number of years didnot justify the cost of recommended changes. We did make 16 ofthe suggested changes at a cost of $1.2 million, however. Wesaved more than $600,000 in the first year alone and more insucceeding years even as the utility companies’ rates continuedto rise
We signed a contract with the engineering firm to implementthese sixteen changes with no financial outlay — the
Continued from page 12.
Examining the Nuts and Bolts...
Spring 2010 • Page 13
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We currently work with severalbanks and multiple receivers.
Continued on page 14...
engineering company covered the price of the equipment andinstallation out of the monthly energy savings over five years, atthe end of which we had an option to purchase the equipmentfor $1. The tenants also saved money on the pass-through costs.
Tenants: Talk with your tenants and their network ofsuppliers, clients and contacts. You may find it advantageous fora large tenant to have their company contacts and supplierslocated closer to them. This might save all concerned time andmoney in decision-making, shipping, postage, telephone calls, etc.
OUTSIDE FACTORS:Competition: What / who are your biggest competitors?
What are they doing that your property is not doing? What istheir occupancy level compared with yours, etc.?
Neighborhood: Evaluate whether your building is in a primelocation and, if not, what can be changed to bring more peopleto your doorstep? A bank building I once represented was in aprime traffic location on two major thoroughfares. But thecommunity became more of a walking community than a drivingone. So we bought a small commercial building adjacent to thebank and a vacant parking lot. We remodeled the front of allthe tenant spaces, entered into new leases with continuingtenants, and opened several small boutique shops that fronted on
the acquired vacant lot. Through attractive landscaping of thelot and carefully-selecting the boutique tenants we were able toattract much of the walking traffic to the adjacent bank building.
Region: What is happening in your region? How does itaffect your property? Are there new competitive propertiescoming on the market and, if so, what can you do to sign uptenants before that competitive property starts its advertisingcampaign?
Traffic: What are the traffic counts at your property andnearby? What can you do to attract the drivers’ attention?
Demographics: Do current demographic factors favor yourspecific property? How will these factors change? What can youdo to enhance marketing to a specific type of tenant based onthe demographic information?
Economy: How do the local, regional, national andinternational conditions affect your property and the financialstatus of your current tenants (or prospective tenants)?
Political Conditions: Are local or national politics affectingthe property? Can you take advantage of conditions for yourown marketing purposes, i.e., look for tenants that may wish todownsize while staying in the same neighborhood (and
Page 14 • Spring 2010
FRANDZEL ROBINS BLOOM & CSATO, L.C.
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Fax: (415) 291-9153
Real Estate Finance & Transactions
Financial Services
Creditors’ Rights & Commercial Litigation
Equipment Leasing
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F
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Contact: Craig A. Welin, Esq.
E-mail: [email protected]
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C
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McKenna Long & Aldridge LLP offers a
proven track record in the areas of receivership,
bankruptcy, and creditors’ rights.
Contact:
Gary Caris(213) 243-6107 phone
(213) 243-6330 [email protected]
444 South Flower StreetLos Angeles, CA 90071
www.mckennalong.com
Continued from page 13.
Examining the Nuts and Bolts...
Continued on page 15...
eventually grow again into more space)? Use creative leases toanticipate and make provision for such needs tailored to specifictenants.
Is there an Economic Development Department in your city?Can you study its list of favored types of businesses? Thatdepartment may assist you in developing marketing plans andeven provide prepared factors on tax benefits, lower utility ratesand employee count ratios. This information will help inkeeping your tenants’ needs met and allow you to market theseand other advantages to new prospective businesses / tenants.
Meet with your local political body to see what it can do foryou and what you can do for the area. Remember that the citywill reap higher taxes from many sources, not just from thebuilding leases, but also from its tenants, their product sales, andtenants’ expenditures in the local economy. There is a normalturnaround factor of new money coming into a local economy –it is recycled at least 2 ½ times before it leaves the localcommunity.
SUMMARY: LEAD THE MARKET!Your goal is to be first in the market place when the bottom
of the U economic curve starts to go up! So remember to:• Look at the property first, the location second, the region
third and the political situation fourth.
• When you take apart something, be sure you label it and set itin separate “boxes” so you know exactly how to fit that partback into the whole project.
• Analyze every part to see what is working and what needs tobe replaced or repaired.
• Prepare a preliminary turnaround strategy.• Prepare a financial budget to coincide with the strategy.• Prepare a flow chart with the above and allow room for delays
and changes.• Inspect each step along the way while reviewing the agreed
upon strategy to determine if anything needs to be changedduring the course of implementing your new plan.
* Mike Wyant is a principal of Wyant andAssociates, a full-service real property firmspecializing in receivership, acquisition,development, construction and management ofcommercial and industrial properties. Mr. Wyantformerly served as a member of the CaliforniaEconomic Advisory Council. His firm may bereached at www.wyantandassociates.com.
Spring 2010 • Page 15
Continued from page 14.
Examining the Nuts and Bolts...
Mike Wyant
Page 16 • Spring 2010
In the Summer 2008 issue of Receivership News, “Ask theReceiver” discussed the concept of having a receiver appointedin aid of execution to sell a judgment debtor’s domain name andother intellectual property. A district court in northernCalifornia had appointed a receiver to take control of internetdomain names owned by a judgment debtor, so they could besold to satisfy a judgment. The defendant appealed and thecourt stayed the sale, but not the receivership, pending theappeal. In February, the Ninth Circuit in Office Depot Inc. v.Zuccarinini, 596 F.3rd 696 (9th Cir. 2010) finally ruled,affirming the appointment of the receiver and the receiver’sability to sell the domain names to help satisfy the judgment.The case provides a powerful new tool for judgment creditors toobtain satisfaction of judgments against persons or entitiesowning valuable intellectual property, such as domain names.
New Tool for Judgement CreditorsOffice Depot had obtained a judgment against Zuccarini. It
transferred its judgment to DS Holdings, (“DSH”) whichattempted a levy on domain names owned by Zuccarini whichwere registered with VeriSign, which is the official registry for all“.com” and “.net” domain names. It has its headquarters in theNorthern District of California. Zuccarini owned more than 248domain names registered with VeriSign, more than 190 of whichwere “.com” domain names.
The Ninth Circuit explained that there are three primaryactors in the domain name system. Companies called “registries”which operate a database (or “registry”) for all domain nameswithin the scope of their authority. There are companies called“registrars”, which register domain names with registries onbehalf of those who own the names. There are “registrants” whoown the domain names. The VeriSign is for the registry fordomain names “.com” and “.net”. DSH initially filed a requestfor turnover in the District Court to compel the registrars ofcertain of the domain names owned by Zuccarini to transferownership to DSH. The District Court denied that request,holding that under California Code of Civil Procedure §699.040it could not order third parties to turn over property. Stymied,DSH moved for the appointment of a receiver to obtain and sellthe “.com” domain names and apply the proceeds in satisfactionof the judgment.
The court first held it had quasi in rem jurisdiction over thedomain names. A district court can obtain quasi in remjurisdiction over property situated within its geographicalborders by seizing the property in the manner provided by statelaw. It held that quasi in rem jurisdiction can be asserted overintangible property. The court then cited to California CivilCode §695.010(a) which provides that “except as otherwiseprovided by law, all property of the judgment debtor is subject toenforcement of a money judgment.” §699.710 goes on toprovide “[a]ll property that is subject to enforcement of a moneyjudgment…is subject to a levy under a writ of execution to
satisfy a money judgment.” The court concluded, under theseprovisions, that all property of a judgment debtor can be used tosatisfy a writ of execution. The court acknowledged thatgenerally under §699.040 property must be levied upon by“taking into custody.” However, the court noted that “thetaking into custody” language in §699.040 does not appear in§708.620, which governs the appointment of receivers in aid ofexecution. The court, therefore, concluded that while a domainname may not be levied upon, it is still subject to executionthrough the use of a receiver.
While California law says nothing about the specific locationof domain names, the Anti-cybersquatting Consumer ProtectionAct does. It provides that in rem jurisdiction over a domainname shall be “in the judicial district in which the domain nameregistrar, domain name registry or other domain name authoritythat registered or signed the domain name is located…” 15 USC§1125(d)(2)(A). In other words, domain names are personalproperty subject to execution and are located wherever theregistry or registrar are located. Because Verisign has itsheadquarters in the Northern District of California, the NinthCircuit affirmed the district court’s order appointing a receiverover Zuccarini’s domain names registered with VeriSign so thatthe receiver could sell the domain names to satisfy the judgment.
This case will be extremely useful for judgment creditors andshould provide a new source of work for receivers because, basedon the Ninth Circuit’s opinion, only by having a receiverappointed will a judgment creditor be able to execute on ajudgment debtor’s domain names.
*Peter A. Davidson is a Partner of Ervin Cohen &Jessup LLP a Beverly Hills Law Firm. His practiceincludes representing Receivers and acting as aReceiver in State and Federal Court.
Ask The ReceiverBY PETER A. DAVIDSOn*
Peter A. Davidson
It is a general rule in state and federal courts that permission tobring suit against a receiver or receivership estate for some actiontaken or contract entered into by the receiver must first be obtainedby motion from the appointing judge. Such claims are typically tried(unless quickly dismissed for frivolousness or otherwise resolved) inthe appointing court for purposes of judicial economy and becausethe appointing judge is most familiar with the facts andcircumstances of the case. But what happens if a jury trial isrequested in a court, unequipped for jury trials – a Family Law orProbate court, for example?
In such cases, a jury trial would likely be transferred to a generalcivil trial judge who administers jury trials but knows nothing aboutyou, the receiver, little about receivership law, and what you asreceiver did in the course of your case. Perhaps more important isthe fact that the jury does not know you, what your function was(what a receiver is), and why you should not be held liable either inyour representative capacity or personally. There will also beexacerbated costs of defense because of such lack of familiarity withapplicable law and facts.
Receiverships are equitable remedies. Consideration of claimsagainst the estate and the receiver in his representative capacity(CCP §568) should be by the appointing court sitting in equity,without a jury. But there is some case law that suggests that aclaimant may be entitled to a jury trial of her/his claims. How bestto reduce this possibility?
Following are two clauses that a receiver may wish toincorporate in her/his various agreements with vendors, buyers ofpersonal and real property, and as otherwise prudent to enhance theprobability that the appointing court will consider and adjudicatesuch claims without a jury:
JurisdictionAny controversy and/or dispute arising under or by virtue of the
Agreement shall be submitted to the Court then supervising thereceivership (“Receivership Court”) in the Receivership Actiontitled, *** v. ***, et al., bearing Los Angeles County SuperiorCourt Case No. ****** (“Receivership Action”), which is deemed
Spring 2010 • Page 17
Word to the Wise Dept.
How and Why to Avoid Jury Trial of ClaimsAgainst a Receiver or a Receivership EstateBY RICHARD WEISSMAN, ESQ.*
Continued on page 22...
The past two years have been two of the busiest years of mylife both personally and professionally. Between becoming a newfather and building a successful practice focused on receivershiplaw and issues, I have never had so much fun in my life.
My first exposure to the world of Receivers began during myfirst year of law school at the University of San Diego in theearly 1990s, when I received a grim call from my father askingme if I could go to the law school library and look up “what is areceiver?” At the time my father was an investor in a realproperty deal that was about go into receivership. Researchquickly taught me that a receiver was not a football player butrather a court officer, appointed usually at the request of asecured creditor or regulatory agency, typically tasked withseizing and preserving assets pending completion of ongoinglitigation.
After that call and all through law school, I becamefascinated with the powers and responsibilities of a courtappointed “neutral” party inserted into the middle of a dispute toprotect and preserve assets. Being fluent in Spanish, I was tornbetween my vision of myself as a future “internationaltransactions” attorney, and focusing on insolvency, receivershipand bankruptcy—topics that I found to be extremely interestingand challenging.
The job market in 1999 and the dot-com bust, took me to afirst job with a small West Los Angeles law firm that had alitigation/bankruptcy department which regularly sought theappointment of receivers. I then moved on to a boutiquebankruptcy firm that focused primarily on Chapter 7 trusteerepresentation (and some receivership matters), where I had thefortunate opportunity to learn from David Gill, one of theleaders in the area of neutrals.
Now, nearly 15 years after that phone call from my father, Iam a shareholder with Buchalter Nemer where I representlenders, special servicers, provisional directors and receivers.Some of my representative clients include major national andregional banks and other financial institutions, as well asrespected and prominent receivers (many of whom I met throughthe California Receivers Forum). My journey to Buchalterintroduced me to my friend and partner, Michael Wachtell, towhom I owe, in great part, my career and success as an attorney.He is a wonderful friend and mentor and has taught me how tobe a better lawyer.
*********************My father was a professional race car driver from Argentina,
and my mother, an English teacher, which probably explains my
Page 18 • Spring 2010
Professional Profile
Richard Ormond’s Journey to ReceivershipLaw: Swift and Exceptionally RewardingBY RICHARD ORMOND, ESQ.*
Continued on page 20...
Karen, Andrew and Richard Ormond.
THELIST WHILE THERE IS NO COURT-APPROVED LIST OF RECEIVERS, THE FOLLOWING IS A PARTIAL LIST OF RECEIVERS
WHO ARE MEMBERS OF THE CALIFORNIA RECEIVERS FORUM AND HAVE CONTRIBUTED TO THIS PUBLICATION.
• This symbol indicates those receivers who completed a comprehensive16-hour course on receivership administration and procedures presentedat Loyola Law School in April 2000.
� This symbol indicates those receivers who completed a comprehensive16-hour course on receivership administration and procedures presentedat Loyola Law School in October 2004.
� This symbol indicates those who facilitated the October 2004 Loyola Law Schoolcourse.
� This symbol indicates those receivers who completed a comprehensive 16-hour courseon receivership administration and procedures presented at Loyola Law School inJanuary 2009.
� This symbol indicates those who facilitated the January 2009 Loyola Law Schoolcourse.
AREA PHONE E-MAIL AREA PHONE E-MAIL
Spring 2010 • Page 19
Bay Area• David Bradlow 415-206-0635 [email protected]� Clay Dunning 925-210-0606 [email protected]
David A. Falls 925-933-2875 [email protected]�� Dennis P. Gemberling 415-434-0135 [email protected]����•Beverly N. McFarland 916-759-6391 [email protected]• Donald G. Savage 510-547-2247 [email protected]��� Kevin Singer 415-848-2984 [email protected]
David Summers 925-933-2875 [email protected] D. Upton 717-833-6173 [email protected] P. Wilson 619-641-1141 [email protected] Wilson 925-942-2600 [email protected]
Sacramento Valley����•Marilyn Bessey 916-930-9900 [email protected]�� Robert C. Greeley 916-484-4800 [email protected]� Donald A. Hildebrand 916-705-8160 [email protected]
Mark J. Len 916-927-0997 [email protected]���• J. Benjamin McGrew 916-482-5100 x 15 [email protected]����•Scott Sackett 916-930-9900 [email protected]���� Kevin J. Whelan 916-783-3552 [email protected] Area�• Steve Franson 559-930-8119 [email protected]��� Hal Kissler 559-256-4010 [email protected]� Terence J. Long 559-225-5688 [email protected]��� Jim Lowe 559-269-0484 [email protected] Angeles/Orange County/Inland Empire� Frank Borman 310-295-1676 [email protected]��• Edythe L. Bronston 818-528-2893 [email protected]
Weldon L. Brown 951-682-5454 [email protected] DeCarlo 714-751-2787 [email protected] Carlston 949-705-5038 [email protected]
���� Thomas Henry Coleman 661-284-6104 [email protected] Crane 949-646-2903 [email protected]
����• Peter A. Davidson 310-273-6333 [email protected] K. Diamond 310-277-0077 [email protected]
���� James H. Donell 310-207-8481 [email protected]�� Steve Donell 310-207-8481 [email protected]
Peter J. Doumani 310-278-6667 [email protected]� Gordon E. Dunfee 858-456-7111 [email protected]� Howard M. Ehrenberg 213-626-2311 [email protected]��� Robb Evans & Associates 818-768-8100 [email protected]
Rafael Figueroa 818-298-8896 [email protected]� Louis A. Frasco 818-903-1883 [email protected]� Allen Freeman 310-234-8880 [email protected]
Patrick Galentine 714-573-7780 [email protected]����•David A. Gill 310-277-0077 [email protected]� James Granby 760-484-0678 [email protected]
Robert S. Griswold 858-597-6100 [email protected] Haddock 310-306-6789 [email protected] F. Hoffner 949-955-2994 [email protected] Hollowell 213-631-0812 [email protected] Ibarra 323-363-2468 [email protected] J. Joseph 310-277-0077 [email protected] Jordan 310-500-284x 202 [email protected]
� Nancy Knupfer 310-893-9611 [email protected] Lim 310-689-8118 [email protected] Mandel 310-276-2990 [email protected]
�• Byron Z. Moldo 310-273-6333 [email protected] D. Myers 909-398-4200 [email protected]
Los Angeles/Orange County/Inland Empire��• George R. Monte 626-930-0083 [email protected]���• Douglas Morehead 949-852-0900 [email protected]����•Robert P. Mosier 714-432-0800 [email protected]�• Dennis M. Murphy 626-794-0288 [email protected]����•David J. Pasternak 310-553-1500 [email protected]�• James L. Peerson, Jr. 323-954-7575 [email protected]��� Theordore G. Phelps 213-629-9211 [email protected]�� Gary A. Plotkin 818-906-1600 [email protected]
John Rachlin 310-552-9064 [email protected]����•David L. Ray 310-481-6700 [email protected]� Terri L. Riker 949-337-2518 [email protected]
George E. Schulman 310-277-0077 [email protected]� Thomas A. Seaman 949-222-0551 [email protected]��� Kevin Singer 310-552-9064 [email protected]
Donald N. Soucy II 818-312-5818 [email protected]• Steven M. Speier 949-222-2999 [email protected]� David Stapleton 213-235-0600 [email protected]
Tim Strader Jr. 949-622-0420 [email protected]�• William E. Turner 714-228-9153 [email protected]���� David D. Wald 310-979-3850 [email protected]����•Robert C. Warren III 949-900-6161 [email protected]���� Richard Weissman 310-481-6700 [email protected]
Joseph S. Yarman 310-500-2840x203 [email protected]��• Adrian Young 909-945-4586 [email protected]�� Andrew R. Zimbaldi 714-751-7858 [email protected] Diego Area�� M. Daniel Close 858-792-6800 [email protected]� Gordon E. Dunfee 858-456-7111 [email protected]���• Mike Essary 858-560-1178 [email protected]����•Martin Goldberg 858-560-7515 [email protected]� Jim Granby 619-233-3131 [email protected]
Robert S. Griswold 858-597-6100 [email protected]�� Thomas C. Hebrank 619-400-4922 [email protected]�• William J. Hoffman 858-720-6700 [email protected]�• Richard M. Kipperman 619-668-4500 [email protected]��• George R. Monte 626-930-0083 [email protected]�• Dennis M. Murphy 626-794-0288 [email protected]
Douglas P. Wilson 619-641-1141 [email protected] Barbara/Ventura County� Gordon E. Dunfee 858-456-7111 [email protected]
Robert Gonzales 805-445-9182 [email protected] Mitchell 805-445-7121 [email protected]
��• George R. Monte 626-930-0083 [email protected]� Rajendra (Bob) Pershadsingh
805-617-0140 [email protected] C. Ricker 805-899-4304 [email protected]
� Barton Stern 805-484-0477 [email protected]
competitive nature and my love of reading. I grew up in LongBeach, California in a home where Spanish was spoken so thatmy sisters and I would be fluent while we used English at schooland with friends. This has given me the advantage of beingtotally proficient in Spanish, allowing me to work with many ofour Spanish-speaking clients.
I attended Long Beach Polytechnic High School, where mykicking skills acquired playing soccer allowed me to be thekicker for the school’s football team. I played alongside futureNFL superstars like Willie McGinnis of USC and New EnglandPatriots fame. My crowning achievement on the field was a 47-yard field goal against Banning High School. From there myathletic career has gone downhill.
I could not be prouder than I am of my family and lifeoutside work. I am married to a wonderful and beautiful woman,Karen, and we have a 17-month-old son, Andrew. Andrewdoesn’t know it yet, but he’s going to be a professional soccerplayer. Karen is also of Argentinean descent and together weare teaching Andrew Spanish so that he too has the advantageof being bilingual.
***********************I am currently involved in many high profile cases including
Lehman Brothers, FSB. v. Beverly Hills Estates funding, et al., a
massive mortgage fraud case that has been active in the FederalCourt since 2003. This case has received a lot of attention fromthe press because of its interesting and bizarre facts —-including the amounts taken by the scheme, a polygamousdefendant who fled the country for over four years, and thecriminal prosecution of high profile brokers and bankers.
My most memorable moment in this case was participatingin multiple raids with U.S. Marshals, alongside my firm’s client,receiver David Pasternak, to seize assets from less thancooperative defendants. In one raid we seized more than$80,000 in cash and multiple firearms. It was an interestingexperience trying to fit a massive shotgun into the trunk of mytiny convertible and then, after failing to do so, driving downthe 10 Freeway with the shotgun in the passenger seat, 4handguns in the trunk and a suitcase full of cash—all with thetop down, hoping to not get pulled over. Newspapers havefollowed this case; the entire case will someday be the subject ofmy first novel or screenplay when I trade in my law license for awriting career.
I am also counsel to receiver Taylor B. Grant in the Bank ofAmerica v. W.L. Homes receivership. This receivership hasgenerated over $90,000,000 from real property sales for the benefitof Bank of America and other creditors seeking to recover losses.
Page 20 • Spring 2010
Continued from page 18.
Professional Profile...
Triple Crown Insurance
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Triple Crown Insurance Services, Inc.6151 Fairmount Ave., #211San Diego, CA 92120
Phone: 619-280-8700 • Fax: [email protected]
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Our Insurance Clients:ReceivershipsAccountantsLenders with REO & OREO PropertiesAsset ManagersConflict Resolution SpecialistsProblem Resolution Specialists
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Spring 2010 • Page 21
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Professional Profile...
Pro bono and nonprofit work are also important to me. Mymost rewarding pro bono achievement this past year was assisting afamily in adopting their three year old daughter. Because I amfluent and literate in Spanish, I was able to help these people, froma demographic that is not usually well represented in our legalsystem. Helping this family become whole was one of the mostrewarding moments in my practice of law. My wife and I wereinvited to a homemade tamale dinner in exchange.
I have been extremely fortunate in gaining personal honors. Ihave been selected five times as a Southern California SuperLawyers Rising Star (2005 through 2009), and was also selectedas one of “L.A.’s Top 100 Lawyers” in 2009 by the Los AngelesBusiness Journal –one of only a handful of attorneys under theage of 40 to be selected.
I see my career as one that is just getting off the ground, and Iplan to stick around the practice of law and the CRF for the nextseveral decades.
*Richard Ormond is ashareholder in BuchalterNemer’s Litigation PracticeGroup in Los Angeles. Hispractice encompasses receiver-ship, provisional directors andother remedies as well ascorporate, intellectual propertyand real estate litigation.
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by the Parties to be the Court of competent jurisdiction for allproceedings of every nature relating to this Agreement and fordetermining all of the rights and duties of the Parties hereto.
“All petitions, complaints, actions for intervention and/ormotions and proceedings of every nature relating to this Agreementand/or among and between the Parties hereto shall be filed in theReceivership Action. The Receivership Court, sitting without ajury, shall hear all such matters. The parties hereby expressly waiveand release all and any right(s) to a trial by jury on all issues arisingfrom this agreement. No Party shall have the right to file anindependent action in any other county or in any other judicialdistrict in Los Angeles County in an effort to have another Courtobtain personal or in rem jurisdiction over any such controversy ordispute, in any manner whatsoever.
“The terms ‘Party’ or ‘Parties’, as used herein, refers to Buyerherein and all other bidders and purchasers of the subject realproperty, and the receivership in the Receivership Action. Thereceiver, individually, is not a party to said Receivership Action, andis not personally liable to Buyer or any third party arising from thesale of the Property. In the event a dispute arises over theinterpretation, construction and/or enforcement of any provision ofthis Agreement, and/or there is any dispute or conflict regarding theperformance of any term(s), covenant or act thereunder, theReceivership Court, in its discretion, shall determine whether anaward of reasonable attorney’s fees and/or costs to any Party shouldbe made and in what amount(s), if any.”
Receiver’s Agency“The receiver is acknowledged by Buyer to be only an agent of
the Court and not acting as a principal in the sale herein. Therefore,the receiver, in his personal and/or official capacity herein, shall notbear any personal liability under the Agreement, in any manner, andshall not be individually named as a party in any action, petition orproceeding of any nature, notwithstanding the intent or substance ofSection 568, California Code of Civil Procedure. Buyer expresslywaives each and all of the provisions of Section 568.
“Any action by a Party or Buyer in contravention to thisparagraph shall entitle the receiver, upon motion in suchproceeding(s), to a complete and full dismissal from said action orproceeding and to indemnification and award against such Party andBuyer of professional fees and costs actually incurred by the receiverto obtain his dismissal. The Parties further acknowledge and agreethat the receiver also shall be entitled to an award of professionalfees and costs, at his then professional hourly rate charged for hisservices, in the event he brings said motion(s) on his own behalf,rather than through counsel. Buyer acknowledges that the receiveris an attorney, licensed under the laws of the state of California, andthat he is not representing the Buyer in any manner.”
*Richard Weissman, Esq. is a receiver and acts as counsel to receivers inaddition to his financial law practice. He is a partner in the Los Angelesfirm Saltzburg, Ray & Weissman, LLP.
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Word to the Wise...
LA/OC Chapter of California Receivers ForumPresents Ask the Judges Program for SoCal Bar
The Los Angeles / Orange County Chapter of the CRF presented its “Ask the Judges”luncheon at the Millennium Biltmore Hotel in Downtown Los Angeles on March 17 tomore than 120 members of the Southern California legal and receivership communities.
U.S. District Court Judge Dean D. Pregerson, U.S. Bankruptcy Judge Sheri Bluebond,Los Angeles Superior Court Judge James Chalfant and Orange County Superior CourtJudge Derek Hunt fielded questions from moderator David J. Pasternak, Esq. and theaudience at the affair.
Questions were solicited fromCRF members for several weeks priorto the event. Topics touched uponincluded criteria for deciding toappoint a receiver and receiverselection criteria, the import ofrocketing real estate foreclosures forthe receivership community, sales ofreal property from within thereceivership rather than aftercompletion of judicial or non-judicialforeclosure proceedings, and manyothers at the 90-minute event.
“The program was an outstanding success with nearly every seat taken,” said ToniSpangler of JBS & Associates, which coordinated the program for the local CRFchapter. “The interest and response was so great that I’m sure we’ll be doing thisevery year.”
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The Millennium BiltmoreHotel ballroom was packed.
Distinguished panelists Hon. Derek Hunt (L) and the Hon.Dean D. Pregerson shared their views on receiver law.
Distinguished panelist Hon. Sheri Bluebond, (C.D. BankruptcyCourt) and moderator David Pasternak.
Among attendees RichardWeissman, David Ray,Edythe Bronston andMike Wachtell (L-R).
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