The facts of life are that any promoter that put together major land deals, like those done in USA, will someday have money if not currently.  Also, generally, such promoters chose not to go bankrupt since this stops future deals and exposes their dealings to the world.  Hence,  Lemke on Comvest, the Binford , Godines (spellings) and others should be pursued at the option of the DL.  It is perfectly understandable that many DLs would rather settle, not sue, but the  father knows best attitude of Cross and the 51% should not prohibit the rights of the minority to pursue claims.   Having chased several wheeler dealers, I can tell you the squeaky wheel gets the grease.   Not all are fruitful but when you hit pay dirt it is well worth the effort since the bulk of the lenders will not pursue this option.  Recently, the HMA bankruptcy estate sold off a $ 2 million judgment against Abolafia (who ran the Royal hotel for Hantges and Milanowski) and is generally known as the time share hustler.  He drives expensive cars, is a member of the country club but he tells the estate he cannot pay.  Maybe so but whoever has purchased the note (which will go cheap) can hound him into making a profitable settlement since he has not and will not go bankrupt.

 By this post I am not impugning the integrity of the Trustee.  I find him cordial and often helpful in situations where a remedy is necessary in an expensive and complex world — such as when he suggested that Beaulieu send a letter to Judge Jones addressing his grievances.  — Result, it worked and justice was done. However, under the present circumstances, the cash and assets of the estate will be drained with unproductive actions or in actions when Direct Lenders deserve a more pro-active approach that resolves many of the current problems.   It is clear that the Trustee is fence sitting with respect to Cross, regardless of  whether Cross is right or wrong.   The Trustee is simply not involved.  Issues such as (1) enforcement and comment on agreements;  guarantor suits,  security interest issues,  all are pressing and demand proactive action, not fence sitting.    I suggested that the trusteee consider a “roll-up” of Direct Lenders interest on the Barkett property to create a more liquid, sellable, mergable deal for possible public company acquisition, which was generally accepteable,  but nothing was done. Now Direct Lenders fact increasngly complex litigation from Barkett. Many of the Direct Lenders which were sued by Barkett should have been subject to the Trustees actions to minimize and clarify the claims which now linger in California and Nevada in a confusing mess. Title problems could be handled by the Trustee and a Gramacy type proceeding would certainly help in the liquidation of assets, but nothing is being done. No clear fault lies here but only observations that again the process is not working.

The BB litigation cannot be solved without a dismissal in our opinion (and I admit we are certainly not experts on this) since their are to many conflicting claims.  Conflicts of interest may exist between counsel for the Trustee and DACA counsel that may be adverse to creditor/lenders.

  We suggest that in the event of a dismissal, counsel stipulate on the use  of assets for the resolutoin of post dismissal problems which now are so complex no one has a solution.  If a BB /Silar solution is workable, the ARC assets must be preserved and not diluted.  ARC Silar response to dismiss bankruptcy

The attached  email addressed to Amsbury lenders get to the point of recent comments concerning Cross billings.  It reads as follows:

No one wanst LA county to take the Casatic property and sell the lender’s interest at a tax sale. However, it is important that the parties get their act together. First, Cross did a deal with DACA that requires as we understand it, them to pay the taxes.  Why are they not being paid?  Why isn’t the trustee enforcing the 51% vote by the lenders in equity to compel DACA to pay the taxes and avoid the expense and waste of time envisioned in the current LA motion?  Cross took their money and ran leaving stranded investors members of a newly formed LLC that has substantive rights to also compel the payment of taxes.  The new LLC and Cross are silent on the motion leaving one to seriously wonder if investors have been left at the train station again.

Also, with the Trustee could do more than just charge fees and sit on the property. As we understand it, the Trustee, did not on this deal or any other, take a stand, participate in the vote,  assert any positive position for the lenders or alternatives.   We think DACA should  be compelled to perform or void the LLC transfer and seek judgment against them for breach of contract. Also, the Trustee we believe could have taken action to control the Barkett litigation, bring it into the bankruptcy forum and perhaps shorten the result one way or the other. Certainly, they could act on offers like they did in Gramacy to protect the interest of selling Direct Lenders where the playing field was under the scurtiny of the Court. LA County Response by Trustee

The problems with the Gramacy vote illustrated the point.  Confusion in voting when the 51%, insiders control outsiders, finally, logic and bidding controlled the day and Direct Lenders got their checks.  Now turn to Comvest, Casatic, Binford and others where the sacred 51% do gooders control the show.   On Casatic, McKnight, an investor and former USA attorney sued in Jones court, in Reno, on his debt against Barkett.  Barkett sued in California on a lender liability theory.  Cross after a 51% vote (or so they say) sells out, pockets some money, wishes Direct Lenders the best and transfers everyone’s interest to a newly former LLC managed by a few naive DLs.  DACA puts up $ 200 K to sue Barkett–or they say— Howard promises to pay the property  taxes if he gets the property//with a residual interest to Direct Lenders but he is a no show requiring LA to file the motion.    Rasmussen sues in Reno in the McKnight case to add her clients to the Reno litigation of McKnight—since she forgot to file answers for most of her clients that now face defaults in California.  The Trustee sits on his butt with the June 9th hearing approaching. —- RESULTS—ABSOLUTE CONFUSION AND TREMENDOUS COST!

All these matters should have been handled like Gramacy.  Open court before the bankruptcy Judge Jones. Open bidding, opportunity to ask questions. Some oversight and finally, you can get good title with tempered influence by the insider gang. To make matters even more complex, the newly formed CasaticLLC has as its member Barkett creating a conflict for the attorney or any attorney.  Also, the securities division of California is looking at this process for clear violations of the securities laws.  Jones should take control and avoid the problems he created when he said in open court that: “ if they voted for it, they got it” and he didn’t care what happened after that.  Problem is Jones that the masses don’t really understand whats going on.  Better a Judge decide than all these self interested players.

Now enter the 51% argument that the statute is unconstitutional and deprives DLs of due process of law.   It essentially denies individual DLs  property rights by denying them access to the courts.  If it is ruled unconstitutional, what  is next?   Again, bankruptcy supervision is the key.  Barkett is raising lack of good title as a defense and all his claims could be decided in the BK along with the lender liability issues. (Can’t you hear Judge Jones cursing Judge Riegle )