SEC vs. Private Equity Management Group
Federal Court Receiver

Situation:

• Alleged Ponzi scheme
• New dollars pay off maturing investors and fund ongoing operations
• Eight institutional investors defrauded
• $1 billion investment

Goals:

• Maximize recovery for investors/creditors
• Sell 50+ assets worldwide
• Coal mines in China; 880 acres in Costa Rica; Timeshare project in Canada; oil and gas rights in Russia; real properties and notes in US
• Maximize the value of 275 life policies
• Pursue litigation

Results:

• To date $135 million of assets sold
• 237 life policies transferred to investors with a potential future value of $275 – $335 million
• Litigation is ongoing
• Potential recovery: in excess of 40%

Mosier & Company, Inc.

SEC vs. National Financial Systems, Inc.
Federal Court Receiver

Situation:

• Alleged Ponzi scheme
• 100 investors defrauded
• Mostly pension plans for small companies
• A high-yield cash fund: insufficient to repay investors; new dollars used to pay off early investors and support operations

Goals:

• Maximize recovery for investors
• Sell notes receivable and real estate
• Sell untainted pension administration division
• Pursue litigation

Results:

• Pension administration business sold preserving legal status for dozens of retirement plans
• Recommend LIFO method of distribution due to poor
• books and records
• 42.5% recovery for the investors
• Two year administration

Mosier & Company, Inc.

IRS vs. A.L. Hargis
Federal Court Receiver

Situation:

• Warehouse banking operation where individuals seek to avoid paying income taxes
• All records destroyed prior to appointment
• Over 800 participants in the program

Goals:

• Recover records
• Recover and sell assets
• Pay IRS liens and penalties
• Reconcile participant accounts

Results:

• Warehouse banking operation shut down
• Letter provided by a participant leads to recovery of several assets
• List of participants found
• Participants advised: change in tax status with potential, retroactive tax liability dating back several years

Mosier & Company, Inc.

CSA
State Court Receiver and Provisional Director

Situation:

• Dispute between two owners
• Specialty consulting business
• Claims and counter claims of abuse and misuse
• Lawsuits pending: request for dissolution
• 70 consultants caught in the struggle

Goals:

• Separate the two owners
• Divide the business
• Arrive at a buyout number for the owner who purchased the main business assets and attributes (location, telephone number, name, web site, etc)

Results:

• Negotiations: settlement reached in 3 months
• Buyout consisted of cash and note
• One party started a new, competing company
• Consultants choose which entity
• Receiver converted to Provisional Director
• Oversee implementation of settlement

Mosier & Company, Inc.

W-23 Lofts
State Court Receiver

Situation:

• West Hollywood lofts condo project; 12 units
• 80% completion; stalled, over budget
• The bank: $9.5 million in the project
• The cost to complete: another $2 mil/6 months
• Condo financing required 50% of units to be sold before any financed unit could be closed

Goals:

• Get owner cooperation: release guarantees
• Select a general contractor and sales team
• Complete construction and then sell the units
• Obtain all necessary approvals including HOA
• Price the units to sell but maximize the recovery for the lender

Results:

• Construction completed on time (6 months) and on budget ($2 million)
• All documents and approvals obtained
• Initial lackluster broker changed
• Project sold out in twelve months
• Lender recovered 66% of its loan amount

Mosier & Company, Inc.

Bellagio of Palmdale
State Court Receiver

Situation:

• 12 of 24 units incomplete at 75%
• The cost to complete: $1.3 million and 6 months
• Owners cooperative with release of guarantees
• High desert pricing declined significantly (>50%)

Goals:

• Select a general contractor and sales team
• Complete construction and then sell the units
• Price the units to sell but maximize the recovery for the lender

Results:

• Construction: on time and on budget
• Sales lagged expectations
• Several price reductions
• Total lapse time: greater than 12 months
• Lender: recovered $2.7 million plus raw land

Mosier & Company, Inc.

Apartments West of Downtown LA
State Court Receiver

Situation:

• Older 12-unit apartment complex
• Significant deferred maintenance
• Difficult neighborhood: drugs, prostitution, gangs
• Default by borrower
• Several Vacancies

Goals:

• Retain on-site Spanish-speaking managers
• Lease out the project and improve security
• Offer competitive move in specials
• Resolve City code violations
• Perform selective maintenance and repair
• Upgrade rents in improved units

Results:

• All units leased: move-outs replaced timely
• Install security cameras, lights and new rules
• Improve grounds and physical appearance
• Continuous graffiti removal
• Selectively improved units with move-outs
• Coordinated a short-sale to get lender paid

Mosier & Company, Inc.

Historic Office Building San Francisco
Federal Court Receiver

Situation:

• Owner/manager in default on loan
• Focus: immediate cash vs. long-term stability
• 30% vacancy and below market lease rates
• Deferred maintenance throughout
• Two of five elevators inoperable
• City mandated repairs/upgrades
• Keen interest in the property: age & location

Goals:

• Replace management and stabilize the project
• Improved lease rates and occupancy
• Address City code deficiencies
• Upgrade rents in improved units as appropriate
• Sell the building at the best price
• Cap rate: $17 million value vs. $41 million loan

Results:

• New on-site management
• Renovation experience
• Occupancy improved to 80%
• Lease rates returning to market
• National credit-worthy tenant selected for retail space suggesting an improved cap rate
• Technical problems resolved (elevators)
• Replaced boilers with city-provided steam
• Project sold for $35 million; 50% down and an owner-carry note

Mosier & Company, Inc.

Strip Mall West of Downtown LA
State Court Receiver

Situation:

• Default on underlying mortgage
• Owner occupied 30% of the center
• Owner cut favorable deals with several tenants
• Deferred maintenance throughout
• Tenant unrest and revolt
• Some had stopped paying rent

Goals:

• Replace management and stabilize the project
• Improved lease rates and occupancy
• Upgrade rents in improved units as appropriate
• Stop the owner from interfering in the management of the property

Results:

• Locks changed on owner units
• Tenants resumed paying rent
• Owner contained and interference limited
• Project stabilized to facilitate foreclosure
• Foreclosure completed

Mosier & Company, Inc.

686 Acres: 1,700 Residential Home Sights, Two Golf Courses Antioch, California
State Court Receiver

Situation:

• Stalled in the entitlement process
• Equity in the property
• Delinquent property taxes
• Property below the Delta flood level
• Requirement: a 20-foot high circumference moat
• Moat requirements: dewater the earth below
• Dewater options: deep dynamic compaction or over-easy excavation
• Large upside but huge infrastructure expense

Goals:

• Maximize recovery: 832 investors; $15.6million
• Conventional sales due to complexities of sale
• Work with the buyer to achieve a final map
• Deep dynamic compaction (DDC) to dewater
• Less costly than over-easy excavation option

Results:

• Sold project to Shea Homes
• $5.6 million (30% recovery)
• Sale contingent upon obtaining a final map
• Receiver/Shea got County Planning approvals
• Neighbors sold on DDC in exchange for a riding trail atop the maot

Mosier & Company, Inc.

1, 300 Acre Ahwahnee Golf Course Plus 58 Home-Sites Oakhurst, California
State Court Receiver

Situation:

• Golf course underutilized: narrow fairways and incomplete infrastructure
• Public drive thru traffic created vandalism
• Home site development stalled: lack of funds

Goals:

• Maximize recovery for the 3,018 investors
• Pursue conventional sales method
• Complete course infrastructure (cart paths/sprinklers): enhance value
• Widen selected fairways by tree thinning
• Extend cart paths throughout
• Stabilize revenues: course improvements
• Limit vandalism: increased patrols and cameras

Results:

• Property sold to developer for $4.3 million
• Progress toward improving golf course
• Entitlements on home sites preserved

Mosier & Company, Inc.

Roofing Company Plus Large Home and Extravagant Assets Seized in Court-Authorized Raid
Criminal Receivership

Situation:

• Roofing contractor accused
• $45 Million: Worker Compensation fraud
• Raid on residences and business
• Arrests and secure assets
• Determine business viability: owner absent
• Restitution claims: State; IRS payroll taxes due

Goals:

• Value all assets
• Secure and store all non-depreciating assets
• Complete roofing jobs were possible
• Collect accounts receivable without warranties

Results:

• Business seized and eventually wound down
• A/R collected, some involving litigation
• Personal assets held pending sentencing
• Case is on-going

Mosier & Company, Inc.

Judgment Against Defendant Alleged Off-Shore Assets
State Court Receiver

Situation:

• Judgment: investor in alleged fraudulent scheme
• Receiver: aid in execution of the judgment
• Corporations Commission: requested Receiver
• Which Receiver had priority over assets?
• Alleged offshore assets

Goals:

• Prioritize the Receiver for judgment creditor
• Trace and locate assets
• Liquidate known assets
• Make recommendations to the Court

Results:

• Business seized and eventually wound down
• A/R collected, assets sold
• Challenge by competing receiver defeated
• Off-shore asset tracing unsuccessful
• Business owner sentenced to prison in Utah

Mosier & Company, Inc.

Reynolds Building
Receiver in Family Court Sale of Real Property

Situation:

• Disputes errupt in 10 year-old divorce
• Former spouses: no agreements
• Court orders rental building sold

Goals:

• Stabilize tenant relations
• Address deferred maintenance
• Maximize value through auction sale

Results:

• Tenant issues resolved/stabilized
• Deferred maintenance addressed
• Property auctions for $4.3 million
• Exceed market comps by $1 million

Mosier & Company, Inc.

Fertility Clinic
Receiver Medical Practice

Situation:

• 2 doctors cannot agree on spliting profits
• Disputes over operation of laboratory
• Dispute threatens profitability

Goals:

• Stabilize the current operations
• Equitably divide the practice
• Ensure medical procedures compliance

Results:

• Laboratory and practice stabilized
• Practice divided
• Patient records transferred
• Dispute resolved

Mosier & Company, Inc.

Court-Appointed Provisional Director (Ownership Dispute/Litigation) $11,000,000 Scrap Metal Processor/Dealer Situation: This company generated an impressive volume but lost money because of poor controls. The business defaulted on a $1.2 million secured loan. A secured lender sought the appointment of a Receiver to see if the business could be salvaged. Robert P. Mosier was appointed Receiver. Results: Controls were put in place and the business’ cash flow was stabilized. An investor purchased 49% of the stock with an infusion of cash that (1) paid off the secured debt and (2) preserved tax NOL. Duration: 6 months. Orange County Superior Court Judge Robert J. Polis. James McShane, Esq., Sheppard, Mullin, Richter & Hampton, Counsel for Plaintiff; Gary Torpey, Esq., Counsel for Defendant. Project Coordinator: Craig M. Collins

Court-Appointed Receiver (Dissolution/Refinance) $35,000,000 Wheel Rim Manufacturer and Importer Situation: The company defaulted on a $11.0 million secured line of credit. The relationship was contentious: the borrower had previously brought an unsuccessful lender liability action. Robert P. Mosier was appointed Receiver pursuant to the default provisions of a Chapter 11 Plan. Results: The Receiver sold unneeded inventory and equipment to pay down the loan. The balance of the note was paid by refinancing other properties owned by the Defendant/Debtor. Duration: 2 years. Los Angeles Superior Court Judge. Diane Wayne. Clifford Meyer, Esq., of Buchalter, Nemer, Fields & Younger, Counsel for the Bank, Edythe Bronston, Esq., Counsel for the Receiver.

Court-Appointed Receiver (Dissolution through Mediation) $9,000,000 Engineering Firm (Major Public Works) Situation: The firm was forced to close its doors because of contract disputes on major projects. The firm was current on its $600,000 secured line of credit. Robert P. Mosier was appointed Receiver. Results: Maximized the value of the firm’s FF&E. Collected accounts receivable. Oversaw and settled litigation against several companies that contributed to the firm’s closure. A 99% recovery for the secured creditor, and a release of personal guarantees for the principals. Duration: 2 yrs. Orange County Superior Court Judge Dennis Choate; Camilla Andrews, Esq., of Ivanjack & Lambirth for Secured Lender. Leonard Schulman, Esq., of Marshack & Schulman for the Company.

Court-Appointed Receiver (Family Court) (Taking Control and Settlement) $27,000,000 Pacific Rim Cable Importing Business Situation: A family-owned business (successfully run by one spouse) was caught up in a divorce. When the other spouse attempted to reassert control, the business declined rapidly. Robert P. Mosier was appointed Receiver. Results: The Receiver selected one spouse to run the business; the other served on the Board with the Receiver. Settlement was achieved by splitting the business: a consumer division to one spouse and the OEM division to the other. Duration: 6 months. Superior Court Commissioner Sheila Fell; Bruce Hughes, Esq. of Hughes & Hughes and Mark S. Lam, Esq. for the Petitioner; Bertrend Cottle, Esq. for the Respondent. Project Coordinator: Craig M. Collins