Open Forum on Large Loans

We have discussed many of the loans in the “portfolio”, but here are a few of the largest loans that we haven’t spent enough time dissecting.  If you have any information at all on the loans below, please feel free to share.  Also, please weigh in on which one of these loans you believe we should research next.

Loan No. Name Loan Amount % of Portfolio
R0122 Rancho Las Flores $55,241,524 8%
POO97 LochenHeath (Pinnacle Development) $45,324,121 7%
POO97 Georgetown (Pinnacle Development) $45,324,121 7%
A0111 Adams Canyon $40,026,027 6%
A0106 Aquaterra $38,500,000 6%
V0146-A Vantage Lofts $37,510,943 5%
H0118 Harmony Holdings $35,066,598 5%
L0366 Lakeview Homes $26,901,250 4%
C0406 Zohouri (2 properties) $25,836,768 4%
TO464 2718 Santa Rosa, LLC 1 $23,500,000 3%
T0466 2718 Santa Rosa, LLC 2 $23,439,240 3%
B0955 Bravo Marshall $22,443,032 3%
M0178 Moses Point $18,499,087 3%
W0435 Weyrich (3 properties) $16,548,743 2%
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13 thoughts on “Open Forum on Large Loans

  1. WO435 is in a multi-tail spin.
    This was the situation as of March of
    this year with one of the properties.

    I think David Weyrich went BK.
    I am checking on that now.
    I will dig deep on this story and get
    as much info out to you as I can.

  2. T464&T466 Santa Rosa

    I don’t know how current this informantion is still
    digging. Why was Barney always loaning our money to
    failed developements?

    a) He felt sorry for the failed developer.

    b) He really thought they were good deals.

    c) He was a sucker for any deal with a golf course.

    d) The big fat commissions.

    http://www.pensapedia.com/wiki/Contrada_Hills

  3. C0404 Cottonwood Hills Golf Course

    Not a big loan but Jimmy has it in the 1st bucket
    so it must really be a jem!

    We loaned $9,942,963 on a property that was appraised at $14 Million.

    Last years apprisal has it valued at $10 Million

    What will it be worth in 2011, 2012,2013,2014……

    Remember the Great Depression lasted for almost
    13 years.

    Here is the (hah!) development web site

    http://www.cottonwoodhills.net/

    Check out what local newspapers, golf professionals
    and bloggers have to say.

    http://www.hutchnews.com/Print/cottonwood-hills–22010-08-24T20-33-34

    http://www.kansas.com/2010/08/01/v-print/1427927/cottonwood-hills-an-enigma.html

    http://www.kansasgolf.org/index.php?page=717

    http://www.hutchnews.com/Todaystop/cwood

  4. HARMONY HOLDINGS /SPANISH MOSS DEVELOPMENT & TIM CASEY
    What a tale of woe this is!
    RE Loans gave developer Tim Casey over $40 Million dollars.

    Tim Casey had a history failures, law suits and tax liens. Barney lent him your money anyway.

    He eventually declared bankruptcy where he turned on Barney and exposed Barney’s Modus Operandi in an adversary complaint.
    His bankruptcy was converted from a Chapter 11 to a Chapter 7.

    Read the Adversary Complaint posted at:
    http://equitatus.wordpress.com/2011/01/12/harmony-holdings/

    Read a local South Carolina newspaper on Harmony’s bankruptcy. Tim Casey the developer and his wife Jane Harriet Casey had been subject of numerous lawsuits and tax liens from the Internal Revenue Service, S.C. Department of Revenue and several mechanics’s liens.

    http://www.gtowntimes.com/Local/Harmony_for_sale.

    Barney doomed this development to failure with his “sharp” business practice.

    What does he care he got his commissions on all of these loans.

  5. Who is Michael Chester?

    Paragraph 43 of the Adversary Complaint filed against Barney in the Harmony Bankruptcy

    43. RE Loans required that Michael Chesser (“Chesser”), an associate of RE Loans
    and Ng be paid $2,160,000.00 from the proceeds of Loan Two, although he had no mortgage or
    secured claim against the Debtors.

  6. The answer to the preceeding question is on page 6 of theBankrupty courts opinion.

    http://www.scb.uscourts.gov/MessageWebService/ViewOpinion.aspx?id=852

    Notice Barney’s $10 Million dollar fee for services on the 2nd Harmony Loan, paid for out of the money RE Loans lent Harmony.

    Sweet! But thats not all he got.

    RE Loans required that Bar-K receive payment of $1,094,196 from the initial proceeds of 2nd Loan.
    Of this amount, $734,795 was payment of points or initial interest to Bar-K although Bar-K was not the lender for Loan Two.

    But that’s not all;

    RE Loans also required that Bar-K
    receive additional points of $163,704 post closing from Loan Two, for a total payment to Bar-K
    of $1,257,900 from the proceeds of Loan Two.

  7. What about Loan One? $15 Million

    $6 Million went to pay off a prior lender.

    The property owner who was the developer received only $6,376,044.71

    RE Loans, Ng, Bar-K and George Smith Partners (“GSP”) received $2,516,000.(Who is GSP? http://www.gspartners.com/

    As a condition of Loan One, Barney Ng required that the developer give him a note and mortgage in the amount of $5,000,000 (the “First Ng
    Mortgage”).

    The developer received no money from the First Ng Mortgage.

    On July 19, 2005, RE Loans and Barney Ng required the developer to transfer to Ng another $5,000,000 mortgage (the “Second Ng Mortgage”).

    Once again, the developer received no money from the Second Ng Mortgage.

    I am not going to analyze Loan 3.

    It is enough to say that the Ng Gang at the end of the day paid themselves handsomely with your money.

    At the end of the day RE Loans owns the Harmony property and is owed $35 Million dollars.

    Of the total loan amount for Loans One, Two and Three, and the First and Second Ng Mortgages, RE Loans, Ng, Bar-K and their associates or affiliates received $19,038,911.26 in closing costs, fees, points and other charges.

    How much of that ended up going to the Ng Gang vs. RE Loans?

    Unfortunately the RE Loans 2007 audit is not detailed enough to really show how much went to the Ng Gang vs. what RE Loans booked.

    We do know that as a result of the Harmony Bankruptcy and foreclosure Barney still personally held the First and Second Ng Mortgages.

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