The Honolulu International Airport, Bar-K and "Gross Bad Faith"

This unpublished opinion by Judge James R. Lambden is quite a nugget.  Bar-K sued First American Title Corp. If you are interested in the details, click the link in the first sentence.  If not, then focus on the excerpts below:


“Without the benefit of an appraisal and with minimal due diligence, Ng concluded the lease and improvements were probably worth $8 or $9 million and certainly no less than $6 million”.

“The trial court rejected (Bar-K attorney) Kroetch’s  testimony. . . noted that Kroetch . . . was “obviously lying” and had “zero” credibility. The court also did not believe the testimony of Bar-K’s office manager”.

“Gross bad faith by Bar-K”.

“Bar-K had “intentionally tried to trick” First American into looking like an escrow holder.”

“The court stated, “Bar-K’s escrow claim was a ploy, a scam, a fraud” that was “consciously orchestrated by Bar-K” with the consent of its management.”

“The cases cited by Bar-K in support of its argument are either inapposite or contradict its position.”

“The court found that Bar-K brought a meritless, bad faith claim”.

What else can be said?  We invested our hard-earned dollars in these guys.  We put our faith in these guys.  We entrusted our retirements, our lives and our futures in these guys.   We invested generations worth of dollars in these guys.  Hindsight certainly is 20/20.

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27 thoughts on “The Honolulu International Airport, Bar-K and "Gross Bad Faith"

  1. Remember, folks, that BAR-K was run by BARNEY NG – not Walter Ng – so perhaps some of your rath should be directed at the son and not all of it at the father?????

    • I’m sick of the occasional apologist trying to defend any member of the Ng family on this blog. All the readers here have had opportunity to see that Barney and Kelly are most likely not licensed real estate appraisers, unless the state somehow misplaced records of their licensing? On Monday Walter said under oath that they were licensed real estate appraisers. It’s written in their advertising materials to prospective investors. For decades they appraised properties and loaned our money out based on values that they were not legally qualified or licensed to determine. Due diligence? Fraud?

      As shown in the time line, and discussed in the hearing, Walter personally continued to solicit funds after he knew the company was in trouble, still telling potential investors that they have never lost anyone’s money. Walter also personally handled the out of state investors money, to circumvent the laws.

      Walter couldn’t be bothered to completely fill out his paperwork for the bankruptcy, with a number of income sources and properties omitted. For a man who ran investment businesses valued around 3/4 of a billion dollars, and spent 2 million dollars in legal fees last year, I would expect he’d understand the significance of thoroughly filling out his paperwork.

      Walter also claims that the investors voted and chose to shift their status to note-holders in 2007, which was news to the investors in the room. There is no shortage of things Walter deserves some wrath for.

      And to the woman who stole time from the victims’ only opportunity to question Walter at the hearing, so she could reminisce about the good years, and scold people for blaming Walter…. shame on her. If anyone wants to be cheerleaders for the Ng family members, create your own blog and stop harassing the victims. If Walter and his sons ended up in prison when this is all sorted out, I wouldn’t lose a wink of sleep worrying about them.

      • kmum states, “Walter also claims the investors voted and chose to shift their status to note-holders in 2007, which was news to the investors in the room.” Well – kmum – unless I was the only one who received the “R.E. Loans, LLC Reorganization Plan and Note Program” documents – i.e. the ‘Exchange Documents’ that is precisely what those documents did – and very, very clearly. Not only did those documents, if approved by a Majority in Interest, effect the change from equity to debt, the documents also clearly stated that the debt would be junior to the senior lien of WFF negotiated by Barney Ng. Did you even bother to read the documents? Did you bother to vote? Whether the exchange received the required Majority in Interest vote is another issue, and one to which I did not receive a satisfactory answer when I inquired about it at one of the Town Hall meetings held early on in this fiasco. I know only that I voted “NO”.

        The purpose of this blog, as I understand it, is to get to the truth and to do that people are entitled to have different opinions without being ‘cheerleaders for the Ng family’ but it would be nice if the opinions were based on some facts instead of hysteria.

        • To the Interested Reader:

          The question of whether there was a majority vote for the Exchange
          is meaningless. The November 1, 2007, reorganization was a provision
          stated in the July 17, 2007, of the Wells Fargo Foothill line of credit.
          Dillydarlin has apparently not read that document.

          Reorganization was a done deal before the vote.

          • Mr. Brower
            Is it possible to post a copy of the WFF Loan and Security Agreement? I would like to understand what was agreed to to secure the loan.
            Thanks.

          • To bluemoonagency:

            I start the John and Jane McGuire trial on Monday.
            It should finish by June 23rd.

            If you send me a reminder on June 24th, I will
            send you a pdf of the original WFF Loan and
            Security Agreement.

            My e-mail is combatlit@aol.com.

          • This is so true. Reorganization was clearly completed before the vote was presented.

  2. Usually when two people are pointing the finger at each other
    they are both to blame.

    Barney overinflated the values of the property to drive the loans
    higher, and hence his commissions.

    What due dilligence did Walter and Bruce do? Nothing. They took Barney
    at his word. It will be very interesting when the FBI gets a peek into
    those loan files. Can’t wait!

    He let 100’s of millions of your money to people with criminal records
    for fraud in numerous states. Gosh, if he had just used Google as we
    have he could have saved us the 100 million.

    Figuring out their shame of blame is a useless exercise. Let a jury sort it out.

    A pox on both there houses.

    • Well, Equitatus, as far as I know there is no jury sorting anything out and please don’t say that that is what is to occur in the McGuire/Collins lawsuits. Barney Ng has convinced some people that he is as innocent of any wrongdoing as a new born baby and the letters written by Barney’s attorneys are held up to one and all as the whole truth and nothing but the truth. The fact of the matter is, if you would take the time to read the documents you were furnished, it was the responsibility of the Servicer Member of R.E. Loans, LLC, Bar-K, i.e. Barney, to do the ‘due diligence’ you refer to; that was the Service Member’s responsibility and it/he was paid handsomely for those ‘services’. In fact, that “Except where herein expressly provided to the contrary, all decisions by the Servicer Member with respect to the provision of Loan Services shall be binding on the Company and each of the Members”. Paragraph 5.9 entitled “Servicer Member” of the R.E. Loans, LLC Amended and Restated Limited Liability Company Operating Agreement. So, if millions of our dollars were loaned to crooks and criminals you should be looking at Barney Ng, i.e. Bar-K, the one who located the properties and the borrowers, negotiated the loan terms, etc. etc. etc. So notwithstanding Barney Ng’s statements that he was not a Member of the Fund and had nothing to do with the Fund, the documents speak to the contrary. It might also be wise for someone to ask: Just who was it that negotiated the Line of Credit with WFF? My guess is you will find that the answer was Barney Ng. Am I saying that Walter Ng has “clean hands” in this fiasco? Of course not, but good grief, folks, put at least some of the blame where it clearly rests and that, at least insofar as RE Loans LLC is concerned, is with the Member of RE Loans LLC charged with the responsibility of ‘sourcing the loans’, ie. doing the due diligence you refer to, and that is Bar K and Barney Ng.

      • The Wells fargo Foothill line of credit was negotiated
        “upstairs” in the Bar K offices. The agreement was
        made by Barney Ng, Stephanie Ng, Matthew Kelly,
        Greenberg Traurig, and Wells Fargo Foothill. No one
        represented R.E. Loans or the investors. When the
        document was complete and ready for execution, the
        signature page was taken “downstairs” and signed by
        Walter Ng.

        • “No one repressented R.E. Loans or the investors”???? Come on, Mr. Brower. Did Barney Ng have the WFF people come to ‘his’ office ‘upstairs’ to negotiate the terms of a Line of Credit for RE Loans LLC which he had no authority to negotiate? Clearly that authority was delegated to him by Walter Ng. Your statement that “the signature page was taken ‘downstairs’ and signed by Walter Ng” clearly reflects that delegation of authority. Barney Ng was running the entire show. And, Matthew Kelly – ‘no one represented R.E. Loans or the investors” – Mr. Kelly was inside counsel for Bar-K, as well as RE Loans, LLC and the other Funds. At least that is what Mr. Kelly represented to me when I asked him for information about the SEC investigation of RE Loans LLC. He stated he could not respond to my inquiry because of attorney-client confidentiality. And ‘no one represented R.E. Loans or the investors” – Greenberg Traurig was outside counsel for R.E. Loans or at least they represented that they were in all the Exchange Documents. Did the ‘investors’, i.e. the Unit holders in RE Loans LLC have separate representation at that meeting? Probably not, but Unit holders had no right or authority to vote on that issue in any event. I have no clue what Stephanie Ng was doing at that meeting – but she is an attorney. Perhaps she was assisting her husband, Mat Kelly in his representation of RE Loans LLC.

          • To the Interested Reader:

            Dillydarlin’s response to me and my post is unfortunate.

            I believe that the difference is this: I have read the Loan and
            Security Agreement for the Wells Fargo Foothill line of credit.
            Apparently, Dillydarlin has not.

            Here is the truth about one example of Dillydarlin’s musings.
            Stephanie Ng was not assisting Matt Kelly; she was identified
            in the document as an Authorized Person and as an Executive
            Officer of R.E. Loans.

            Since she admits to having “no clue,” Dillydarlin might resist
            destroying the purpose of this blog with unfounded speculation.

            To Dillydarlin:

            After you have read the document, perhaps you might post comments
            here. I, for one, would like to know what you think about the agreement
            to reorganize as a condition for the line of credit.

          • You’re absolutely right, Mr. Brower. I haven’t seen or read the Line of Credit documents – perhaps you would like to post them so that I and others who are interested can read them and then I would be happy to tell you, as you request in a post somewhere, what I “think about the agreement to reorganize as a condition for the line of credit.” Your comment sounds like reorganization was a condition precedent to funding the line of credit which would require a vote of the Unit holders. But you’re right, not having read the documents I can only take you at your word – that reorganization was a condition precedent, ergo a vote of Unit holders was necessary. And, further, I will note this, which requires NO reading of the documents but just a review of your statements on this blog. Since you state that Stephanie Ng was identified in those documents (or at the meeting) as “an Authorized Person and Executive Officer of R.E. Loans”, and since Matthew Kelly was the in-house counsel for RE Loans, LLC, and since Greenberg Traurig was outside counsel for RE Loans LLC your statement that “RE Loans was not represented” at the meeting held in Barney Ng’s office is simply not true – that is to say – your statement was and is FALSE…or as you like to say, “a total fabrication”. So Mr. Brower I will resist my “unfounded speculation” and “musings” if you will resist destroying the purpose of this blog with false statements. I look forward to your posting the Line of Credit documents for all of us to read. (I’ll bet that will be a long wait – or is that just another bit of my “unfounded speculation” and “musing”?

  3. Equitatus and Dillydarlin are both correct. This whole episode simply underscores the greed and arrogance of the Ngs…all of ‘em. They thought they could get away with over-inflating the value of properties – and they did. They thought they could suck out huge amounts of cash. Guess what? They did. Everything they should have been doing to, as they say, “protect the assets” was code for “rape and pillage as long as you can” and throw us, the investor, out when/if it ever came to that point.

  4. Walter, Barney, Kelley are pathological liars, sick, demented people. They represent among the worst of humankind, full of greed and power with no care for others. In a figurative sense, they have killed people, loading the elderly with stress, possibly putting them on the street, their lives destroyed. The Ng gang have hurt and damaged more people than the average criminal locked up in the county jail. This is my opinion and I hope the Ngs pay dearly for what they have done (not to me, I am just fine) to the ordinary person just trying to get by in uncertain times.

    • I invested almost my entire life savings with Bar K. I had a friend who was invested with them for 22 years and he trusted them 100%. They promised they would never borrow to lend to any one. They promised they only made loans to people with good credit and those that had a down payment of 30% or more. The promised never to loan funds on land to builders. They broke every promise. I am financially devestated.
      I am still trying to understand why they borrowed and loaned out 65 million dollars on a credit line and I am legally bound to pay it back out of my life’s savings. I am 68 years old and am getting about $1,200 a month from social security. I took a reverse mortgage on my home and took in a boarder to pay my monthly bills. I currently have about 200K to last for the rest of my life.
      I figure they took in millions on the 65 mil they loaned out, and I just read they won a law suit for over 3 mil. What are they expected to do with that money by law, if anything? Do they owe anything to me and the rest of their investers? They had almost 500K of my hard earned funds.
      J Sykes

  5. It appears that Greenberg Traurig was Barney’s agent. Barney Ng, Matthew Kelly, Peter Johnson and Eric Bendall were inventors who filed for a Patent application titled: System and Method for Licensing Fee Distribution, Origin; Santa Monica, CA, IPC8 Class: AG06Q40000FI, USPC Class: 705 39. They listed their agent: Greenberg Traurig,LLP (SV); IP Docketing.
    Therefore, it appears Greenberg Traurig main concern would be for Barney. The question is; did they make money off their invention?
    Another line of thought would be, did any of the partners seek a line of credit before the investors became note holders. Maybe they learned in order to obtain a line of credit they had to change the status of the investors.

  6. Dillydarlin: You seem to sway with the wind in your remarks. Mr. Brower would not state the items on this blog if he thought they were not true. I am thankful that we have someone on this blog that has facts and are willing to present them in a court room, are you? With that said, are you with us or against us?

    • To Another Bar-K Victim:

      After the McGuire trial, I hope to find someone that will help me
      post all the trial exhibits (or the most important ones) online so
      that all the interested readers can see them and make an
      independent decision.

      I am grateful for all of the insight I have received from the comments
      on this blog, including Dillydarlin, the most respect securities person
      in the Bay Area and beyond, and I would like to continue receiving
      that assistance as I move on to the Dixon Collins case.

      I am trying to do my best, right or wrong, true or false.

      • Mr. Robie:
        No attack was intended. Mr. Brower is the only representation going forward that the investors have. He has read a lot of the documents and is presenting those facts and should not be challenged on his findings. Investors are fortunate to have someone like that post findings on this blog, I shall not respond to anything else.

        • Where is the CRO in all of this? Jimmy promised;

          “I will work with R.E. Loans, LLC’s counsel to either obtain
          extensions of these deadlines for R.E. Loans, LLC or to determine what claims, if any, R.E. Loans, LLC should submit.
          I expect to report the results of those discussions by mid-June, 2011.”

          He has hired lawyers, (from LA, that’ll cost us) who thus far have only put in an appearance on paper.

          They didn’t show up as far as I know at the hearing of creditors. I guess they wouldn’t want to ask Walter too many questions. Don’t bite the hand that feeds you.

          Who do they represent? REL,MF08? The noteholders?

          They didn’t oppose Kaplan, or Green as of yet.

  7. I don’t know who ‘Another Bar-K Victin’ is, but it’s sure as hell not me!

    It’s someone who ripped off my Username, one I’ve been using for over three years,

    Anything written by ‘Another Bar-K Victin’ should not be attributed to me!

    AnotherNgVictim

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