The ‘Mourning’ After

Rage faded to disappointment overnight, but returned with a vengeance this morning.  The realization (or was it a reminder?) that the valuations provided by the NG family aren’t simply inflated, but greatly exaggerated, hit like a ton of bricks.  Weissenborn and his high-priced team have been noticeably quiet.  They apparently don’t have time to update us on anything, let alone the great financial loss we sustained yesterday.  Arent Fox made money.  Stephanie & Matthew Kelly made a few bucks.  So did Innovation Capital, to the tune of $300,000 plus consulting fees of $10,000 per month.  We, however, lost everything unless, of course, you believe in divine intervention.

Team Weissenborn wrote the following a few months ago in his August newsletter:

“RE Loans owns a little more than 40% of the membership interests in R.E. Reno, LLC, which has a $50 million loan secured by a first deed of trust on the Siena. R.E. Reno, LLC was foreclosing on that deed of trust.”

Remember that the $21 million from RE Loans coupled with the $29 million from RE Reno totals $50 million of private investment into Barney AND Walter’s failed experiment/hobby (Walter doesn’t get a pass).  The worst part, from our perspective, is the fact that Bruce, Walter, Barney and Kelly enticed some people to double-dip.  These fellows failed to reveal that RE Loans had already invested in the Siena.  They went out and sold RE Loans investors on the idea of  investing in RE Reno.  The RE Reno investors got the double whammy.  Did B-4 Partners break any laws due to their lack of disclosure?  Without a doubt, at the very least, it’s likely a very serious ethical breach.

The August newsletter also contained a previously discussed letter from Walter entitled Exhibit A that was addressed to all RE Reno members.  Walter promises “periodic updates going forward,” but three months later we’ve been given nothing but silence.

Back to the Weissenborn letter:

“Recognizing the realities of the nature of the holdings, Mackinac Partners has developed three separate “buckets” in an effort to determine how much liquidity can be generated relatively quickly without suffering substantial losses in value with respect to the portfolio. Attached hereto is a list of the properties owned by RE Loans and securing debts owed to RE Loans divided into three “buckets”.  Bucket One is the relatively small bucket of properties that can be liquidated in the short term without generating large losses in value.  Bucket Three is the list of properties that Mackinac Partners believes should be held for a more extended period to maximize value, based on our assessment of the likely value that might be generated by holding such properties and the carrying costs for each of these properties. Bucket Two is the list of properties that must eventually be moved into either Bucket One or Bucket Three, based on ongoing developments in the markets and resolution of potential litigation or lien claims with respect to those properties.

The Siena, a member of the second bucket, kicked the bucket yesterday.

S0238-LLC         1 South Lake Street       21,409,300             3%

Three percent of the RE Loans portfolio just disappeared.  It feels better to write “three percent” than it does to write “$21 million”, or “$79 million”, but it doesn’t change our fate.

Here we are, the day after a very real loss.  Our outrage should be palpable.  Most of us are senior citizens.  Most of us had large amounts of money vanish and are too advanced in age to start all over.  What do we do?  Most of us feel lied to and cheated by the very people we trusted the most.  Many of us have spiraled into different stages of depression.  Snap Out Of It! It’s time for action.  If you’re not picketing with the gusto of an angry labor union outside the 201 Lafayette Circle office, you should be filling their mailboxes (snail mail and email) with letters of disgust, you should be contacting your local media outlets in an effort to tell your story, you should contact the field offices of your representatives (local, state and federal) and you should be raising holy hell.  Note, we are not promoting civil disobedience.  Don’t do anything that will endanger you or others.  The dollar amount of this atrocity isn’t Madoff-like, but it’s large enough and meaningful enough for people to actually DO SOMETHING about it.

We can gather information here, we can commiserate, but ultimately, if we do nothing, nothing will ever change.

After you read this, will you pledge to take one action that will either publicize our issue, alert decision makers to our issue, or inform those who led us down this path that you are not going to stand idly by anymore?

Finally, to Pearl Tom, Ronald Nahas, Elliott Abrams, Gene Rapp, and Allen Cone:  If you are listening, are you done playing the role of lap dog?  Unless you were part of Team Tagami/Epstein and received preferential payouts, you’re one of us, so start acting like it.

22 thoughts on “The ‘Mourning’ After

  1. I commiserate with you. It is almost next to impossible to get investors involved. It is difficult being a lone voice. I would like to explore why. Is it because they just don’t care? Is it fear of retribution by the servicer? Embarrassment?
    In another hard money loan situation, I have had to personally call people to get them to react. Now when I call the same folks, they are either too busy to talk or they don’t return my call. They just don’t seem to care and their complacency is costing all of us.

    • Some Investors seem to believe Walter and Kelly Ng’s tired excuse…reloansllc is in trouble because of the economy…funny they have enough for their paychecks….s Then there are the Investors afraid of a fire sale…doesn’t look like there are many properties worth much…and what about the personal guarantee by Walter? Several weeks ago he said he is putting up his personal money to guarantee the wells fargo loan…what’s up?

  2. Feeling Cheated,

    Are you an investor in any of the Ng funds? Have you followed this blog or the old Google forum?

    There is more than “a lone voice” here, and if you have been following this blog, or it’s failed predecessor, you know that what’s wrong is that we have no money left with which to fight the Ngs as they use our money against us.

    So, I ask once again, are you an investor into any of the Ng funds?

  3. 1 – Get your local DA interested in a CRIMINAL prosecution, and your civil cases can coat tail in. This may be difficult if there is no criminal activity and your investments were just ill advised.
    2 – Sue for performance on your personal guarantees. It is relatively cheap, and 1000 suits might even daunt the Ng machine. It will send all the Bar-K related entities into BK when judgments are filed against them, but who cares any more? Trust the courts or trust Chester the Molester at this point?

    If the Ng’s actions are legally criminal, go to town on them. If not and you just made stupid (AKA ill advised) investment decisions, quit whining and move on with your lives.

    Hey, little boy. Want a piece of candy?

  4. It’s not about $$$$ or the actions of others. It IS about our own personal actions. I will sign up to take action. Now there is 1. Are there others willing to join me??????

  5. Asked a Chinese friend the meaning of “fai”. She told me that in Cantonese it means “speedy” or “fast”. There is no Mandarin word “fai” . . . but “fa” means “getting rich”.
    As to Ron’s question . . . I’m ready to take action too. What do we do?

  6. We are all devastated!! We are all tremendously disenchanted and angry with Walter and his gang for violating their fiduciary responsibility to the investors!!

    I now live in WA state, so can’t picket the Lafayette office, but support those who will, and getting the press involved to put pressure on the antagonists, including the Weissenborn machine.

    Thank you for keeping the heat on!

    • when i told kelly i was completely financially ruined he had the nerve to sugest…get help from your family…i guess the help he got frmo his family worked out well for him!

  7. I think a class action case is the way to go.
    We will need 5-10 investors who’s claims are
    typical and representative of the population
    of investors.

    • Look at the Mortgage Fund ’08 complaint filed by Bob Huddleston, an attorney in Walnut Creek. Add to it breach of securities laws, failure to register the exchange transaction and a general allegation to permit certification as a class. That would do as a start with amendments, as necessary to follow, but you’ve got real statute of limitations issues now and failure to register under the ’33 Act and l0(b)(5) securities fraud allegations would probably require filing in federal court. An explorative call to Huddleston should be made ASAP. Class actions are not simple and not just any attorney can handle them. I think Huddleston was trying for a class action in the Allegria (sp) case, but couldn’t get a list of the 08 investors. I would urge John Robie to make that call if for no other reason than to get a general reaction from Mr. Huddleston re viability of a class action.

  8. Dilly – Thank you for your thoughts. It might be far easier for someone with a pre-existing relationship with Huddleston to handle the outreach. Does anyone know Huddleston?

    Most of the information Huddleston or another interested attorney would need could be found here or on the old Google forum in addition to the Alegria/Grassi suit, the Collins suit or the Barney v Bruce suit and cross-complaint. Information is readily available.

    Our basic understanding of the situation is that the statute of limitations have run, not to mention the burdensome arbitration clause in the exchange agreement. As for the RE Reno investors, they have what the non-RER’ers don’t, which is a personal guarantee from Barney AND WALTER. Would that personal guarantee be altered by the BK? If not, what lengths would one have to go to enforce said document? Keep in mind that there are many of us who simply don’t have the resources to fight legal battles, as noted by AnotherNgVictim and Ron. There is a significant downside to litigation. If we win, can we collect? If we lose, how much more have we lost?

    We are thrilled that you have started this discussion. Let’s keep exchanging thoughts and ideas as we speed forward on this mission.

  9. The causes of action would be, Fraud, Negligent Misrepresentation, Breach of Fiduciary Duty,
    Breach of Duty of Good Faith and Fair Dealing,
    not to mention the various statutes and consumer
    protection laws that exist.
    You don’t need a list of everyone to bring the suit.
    All you need are class representatives.
    It is true that the Ng’s can declare personal bankruptcy and have all the negiglence claims dismissed but Bankrutcy courts routinely allow parties
    to persue their fraud and statuatory claims.

    Maybe the new Attorney General or a Senate or Assembly
    committee would look into this now the election is over.

    I have some attorneys to recommend that if they tought there was merit would do it on a contingency
    basis. They have the millions it would take to prosecute this.

    I new to this scam on trying to help my brother who
    lost his life savings in this.

    I will give you a cell phone number to call in a couple of days. I am currently out of state.

  10. Stunned, $6M fees on a $25M loan and it sounded like the judge was in slap down mode. The Ng’s loan packages were really suckie in the dying days, but people signed up for them.

    RER folks, how hard (expensive) could suing for restitution based on your personal guarantees be? The first couple in might be able to work out a settlement with a non disclosure clause. Investors eat their spawn. Why not if it saves your investment (aka ass)?

    REL folks, your situation is more difficult, as you know. The securities fraud issues are a criminal not civil, so you will have to just stand in line for someone to actually beat the Ng’s. That’s a tough nut.

    RER just went to zero, and it is fair to ask just how far from zero REL is today. Bar-K, Kelly, Barney, Walter and all the other entities will just go BK if the issue gets pressed too far. It didn’t work out for the investors in the Siena, did it?

    Realistically and sad to say, REL is toast. Zero, nada, doit. All equity gone. $M+ of your investments returned to dust in the desert. So the game has switched from recovery to retribution. Who still has the will power and fortitude (and funds) to seek justice aginst these scum sucking pigs?

  11. Julio – That’s why we’re here. We are seeking the truth. We are seeking answers. We are seeking justice. We are stronger as a team than we are individually. Banding together and working as a team is our only option. There are a growing number of like-minded individuals meeting on this site. We’re buoyed by the resurgent power of the people. Are you?

  12. Has anyone tried to confirm the families personal holdings? Barney always had a habit of securing something for himself as part of the deal. Often parcels, golf membership for Walter. The list goes on. Has any of that been identified?

  13. Nothing has happened. Nobody has challenged it and Walter is likely doing everything possible to distance himself from the guarantee. We are hopeful someone, anyone, will step up and challenge the guarantee before it becomes unenforceable.

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