McGuire Trial Resumes

Opening arguments in this case are Monday June 13, 2011 at 8:30,  Dept 607 Fremont branch of the Alameda Superior Court.

Details here:

90 thoughts on “McGuire Trial Resumes

  1. 11:26 a.m. Thursay, Flash!

    Jury has gone home for a long weekend.
    They will return on Monday at 8:30 and work till 2:30.
    One of the jurors will not be there so the Judge will tap
    one of the two alternate jurors.

    The jury seem happy and in good spirits.

    At one point a cheer could be heard coming from the jury room.

    • Equi, Robert, All

      I’m pursuing another avenue of (hopeful) recouping for all of us. (Hope flames eternal). In order to proceed further, I need to know if any of our RE loans were sold to other lenders…..or were they sold to Wells Fargo? The key here is sold.

      If there is someone I can speak with knowledge and facts re: this, please call me at (415)308-4818.
      Thank you,

      Thank you,

  2. Dare we all hope?! Equi, an additional career?….integrating .fact and suspense , with precision detail and depiction.

      • You are funny!

        May I post this again…..I do need the answer.
        ’m pursuing another avenue of (hopeful) recouping for all of us. (Hope flames eternal). In order to proceed further, I need to know if any of our RE loans were sold to other lenders…..or were they sold to Wells Fargo? The key here is sold.

        If there is someone I can speak with knowledge and facts re: this, please call me at (415)308-4818.
        Thank you,

        Thank you,

  3. I mentioned in my trial notes that there is potential problem within the jury instruction and special verdict which may have gone unnoticed if you were attending the trial.
    It revolves around our favorite subject of fiduciary duty.

    Throughout the trial we were continually subjected to Bruce Horwitz’s (BH) repeated protestations, like a mina bird; “I was not a manager of REL, I was a manger of B4 Partners”.
    Why “doth he protest to much?” The answer centers around his defense, as a manager of B4 he owes no duty to REL LLC members.

    So the question that the jury is has to deal with, the first hurdle so to speak is what duty does BH owe to you an investor in the old REL LLC.

    What fiduciary duties, if any, do LLC managers, and other LLC members owe to each other.

    This variance from state to state on the topic but the law prevailing in most states is that managers (be they members or not) owe a fiduciary duty of loyalty to the LLC.

    However, non-managing members owe no such duty. This is why Horwitz kept saying he was not a manager of REL but a manger of B4 the enitiy that was suppose to manage REL. His argument is B4 owes a duty to REL LLC, but not me Bruce Horwitz.

    Section 17153 of the California Corporations Code provides: “The fiduciary duties a manager owes to the limited liability company and to its members are those of a partner to a partnership and to the partners of the partnership”. This is what the judge read as a jury instruction.

    See Section 16404(b) of the California Corporations Code for the specifics of fiduciary duties of partners under California law. “The fiduciary duties of a manager to the limited liability company and to the members of the limited liability company may only be modified in a written operating agreement with the informed consent of the members.”

    Although I have not seen the Special Verdict form presented to the jurors, I understand that one of the very first questions they have to answer is Whether Bruce Horwitz owed a fiduciary duty to members of REL LLC. It seems odvious that he did to most investors, but as you can also see the law is not clear on this issue.

    The jury could be easily confused and technically buy his defense. Which either way it goes there is an appeal in the offing depending on how they answer this question.

    Hopefully the cheer we heard coming from the jury room came from them jumping over this first hurdle. Or maybe not.

  4. B-4 Is the owner, and manager of R.E. Loans. B-4 is a member of R.E. Loans as is Bar-K a member of R.E. Loans. B.H. was the Managing Member of B-4 for R.E. Loans.

  5. Since there is no court on Fridays, I assume that means no jury deliberations either?

    It seems like a fairly complex case with a lot of angles which may seem like hair-splitting distinctions in legal business terms to people not closely following this situation, so I don’t envy the jurors for having to sort it out.

    Any guesses on how long we might expect deliberations to go on?

    Thanks for all the reporting from the courtroom, for those who weren’t able to attend.

    • Would someone be good enough to tell me how much was the value of RE Loans and separately, Mortgage 08, before the shenanigans and our losses?

      Thank you.

  6. B.H. Letter attached to our 6/30/2007 statement.
    On June 30,2007, assets were $725,762,087.48 All loans are first deed of trust not exceeding 70% of the value of the properties.

    Following is a summary as of June 30. 2007:

    Cash ——————————————————– $1.077,894.17
    Loans ————————————————– $724,684,193.13
    Total assets in partnership ———————— $725,762,087.48
    Number of loans ——————————————————- 71
    Average loan value ————————————— $10,352,631
    Yield (annualized) ————————————————— 8.4%

    Life style

    • Thank you, Life Style. Was that $725 RE Loans, or did that include Mortgage 08 and if so, how much is 08 so I can find the values of each separately.

      Thanks for your help,

  7. Flash!

    One alternate juror joined the jury for a departing juror this morning.

    That requires them to start their deliberations from the beginning.

    They worked from 8:30 to 12:00.

    Went to lunch and deliberated until 2pm, but they decided to go until 2:30.

    Since they went a half hour past their scheduled quitting time the speculation is they may be close to a verdict.

    The jury has now left for the day.

    They will come back at 8:30 tomorrow.

    I will post the Special Verdict form on my blog later today.

  8. Equitatus suggested we move forward with a calss action suit… I replied to him

    Okay – so let’s go!! November may be the SOL date… I am in with the MF08 folks and a group of us would be ready to go forward with a class action… however, I am a medical person (brought in by Bruce) not a legal one, so need help to go forward.. Seems to me it would be best if we all got together, but as I have told you, others seem to feel like their money outcomes would be diluted by a larger group??
    Can you recommend either yourself or another attorney with SEC and real estate knowledge, and bankruptcy knowledge who mioght be able to help us?? Seems like you and Robert Brower are our most informed folks about the complexities of this case.. please advise!!

    And all investors… let’s see how best to move forward to see if we can get anything back!! I believe we would be in a better position if we can all come together (and bring those who are not as internet savvy in as well)

    Many thanks to the McGuire’s, Equitatus and Robert Brower for getting us this far… now what do we do??

    • I concur with Arlyss. Let us move forward now. If we don’t move forward as a group, then there will be multiple lawsuits from different factions and then whoever we’re suing will likely pit us against one another, rather than having to deal with a strong group. Even if the case is taken on a contingency basis, there will be out of pocket costs that are substantial, won’t there? In which case, a larger group to share the costs would be beneficial. And if in fact, Wells Fargo has liability, then their pockets are quite deep

      Absolutely, much gratitude to the McGuire’s, Collins’, Equi, Robert Brower, John Robbie and everyone who made this point possible.

      What are the next steps folks?

      • Clarification. Some people are in both, some only in RE Loans. I’m in RE Loans. I believe the same logic above still applies, to whichever group. I don’t know if the groups can be mixed together, likely not. Yet that still seems to leave two groups, regardless of how they subdivided us in their context. If I am mistaken, please so inform. Thanks.

        • We are all the victims of the Ng’s greed, bad judgment, and most probably criminal behavior, including the use of the United States Postal system for fraud. To think that they took a COMMISSION when obtaining the loan from Wells Fargo Foothill is mind blowing. I hope that all investors can go into one lawsuit against the Ng Crime Family & Company. My dream is that the FBI will turn this into a Federal Case . Bruce Horowitz should sing like a canary to the FBI…almost a billion dollars is a lot of money for a few Chinese Banquet meals and a rose. What happens to us when, not if, BAR K, and all the zillion of other LLC’s they created file bankruptcy?

          • They are already planning their future bankruptcy filings for at least some of the companies… I would guess that RE Loans and Bar K would be at the top of that list. Kelly will probably claim that the bank is forcing them to do this for a “fresh start”.

            If they are granted protection and the debts discharged, I don’t know if we have any recourse. (Someone with legal expertise in this area will know more.) If they are found to be criminal, (legally, most of us agree they are morally criminal already,) then there might be other opportunities for some recovery. Or if they don’t cooperate with the terms of bankruptcy, they could be refused. There is also the filing yesterday asking that Walter not be allowed to discharge his debts to us. Something like that might give investors more time and opportunity, if accepted by the judge.

  9. Go to for excellent info on Chapter 11, 7 bankruptcies. It or an industry publication per equitatus a couple of weeks ago, states some one/ any one ought to (I’d say has to) file objection with even a simple letter to debtor’s/Ngis dischargeability of debts and objection to Ng’s request for exemptions.

    Otherwise if the judge, US Trustee, courts does not receive a siple filed objection the Ngs get away with it. totally what is not wanted. So send a letter to the US Trustee and/or the USBankruptcy Clerk Ms. Franklin 1300 Clay St., in Oakland, per the bankruptcy Notice you received.

    In this case, the more the merrier, soplease email a letter of objection, or some kind of adversary filing to prevent a Chapter 7 to US Trustee Maggie.McGee@USDOJ.GOV. Please do it before the August 23rd or 25th deadline? More help is welcome on getting the money returned to us during and after the Ng’s bankruptcies.

    • A – This link brings us to a very generic site.. How best to navigate?? Your comments are good, but need better directions.. so sorry, but could you be clearer re next steps? I am more than happy to file a letter of objection to anything folks seem to feel is objectionable, but I am not clear from your post what to say… Having alot of folks sending letters that do not clearly address an issue is counter-productive…. please advise.
      Chapter 7 vs 11 – as a lay person I am lost….

    • Is the petition we received from John Robie, one that automatically goes to the necessary recipients, ie Maggie and Ms Franklin?
      If not, does someone know how to forward that petition, already signed by some of us, to Maggie and Ms Franklin?
      And do we have a receipt/acknowledgement of some kind evidencing that the petition with all those signatures has been sent?

  10. Thank you, John, Is that sufficient to cover our base for objections to them going forward and granting the Ng bankruptcy?

    Also, will we have confirmation such that they can’t deny receiptt?

    • No, it is not sufficient. What it shows is that we have a voice, we’re not afraid to use it and, MOST importantly, we can organize against anyone or anything that stands between us and the justice we so rightly deserve.
      Sent on the Sprint® Now Network from my BlackBerry®

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