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.