We just received word that the judge in TEXAS overseeing the bankruptcy of a CALIFORNIA entity denied the change of venue motion. God forbid that those affected most by the process should actually have access to the process. This decision is categorically wrong and leaves us out in the cold – again. It’s about time one of the many arms of government stepped up and did something right in this case. Today, however, is not that day.
Bar-K Investors 
Now what? Does anyone think there’s a chance we will ever see a dime? Does anyone think that the SEC or the FBI is actually pursuing the illegal aspects of this debacle, and if they are, is there any chance of success? What effect, if any, does this have on the class action suits? All I see is a tangle of legal wrangling and associated fees. Icing on the cake: Iit would appear that the creditors’ counsel may be incompetent. Who chose him? Should he be replaced? What else can go wrong?
I am frustrated as well; I let my emotions get the better of me in my comments on the “Showdown” thread and have requested that Mr. Robie remove all my posts in that thread and have also reached out to the head of the committee to make amends. I am hopeful that committee counsel will achieve the best result possible for the noteholders and regret airing my concerns publicly.
With what Gibb’s et al are earning I doubt the are concerned about
your monentary lack of confidence in them.
As far as I’m concerned they blew it by not instantly jumping on the
change of venue motion.
Also there total lack of communication until recently does not build
confidence.
Don’t take this post personally, I think you were right to form that
first impression.
I agree that the creditor’s committee and their attorney blew it by not taking quick action to move the venue immediately, as the Honorable Judge Efremsky inquired about when RE Loans bankruptcy was first filed, and he reminded everyone of when the change of venue was presented in his courtroom.
Now that we’re stuck in Texas, I think we all need to start insisting on more communication from our creditor’s committee. We need to ask questions when we need information, hold them to a reasonable time to respond, and be ready to file complaints if they ignore us. (I know in Walter’s personal bankruptcy, when there was a creditor’s committee, some members never responded to inquiries from some creditors emails.)
This is our money that was taken, and they dropped the ball for getting the legal case back in our home court, so they need to wake up and be responsive now.
Looking at that burn rate, is the creditor’s committee just rubber stamping all bills waved under their noses, or asking for some accountability? Weissenborn has wasted thousands of dollars sending huge mailings and holding a meeting, asking people to vote on things that were not eligible to be voted on. If he’s wasting time and money, let him pick up the tab. Do they even question this? Who is driving this bus? It sounds like whenever Weissenborn says he needs to hire this or that consultant, the creditor’s committee just shrugs.
We need to be more proactive, since apparently James Weissenborn and Mackinac Partners, along with Wells Fargo, are just going to keep going until the account is worth less than Wells Fargo claims we owe on it, thanks to their creative math.
Thanks, just making sure no one was taking my rants seriously. I just want the noteholders to get what they’re paying for. The burn rate numbers are obscene any way you look at it. Still mad at myself for not bailing out of this before it went south.
Ed,
I don’t think you owe anyone an apology, especially the head of the committee or its counsel. At the hearing today we learned from a Wells Fargo attorney, that, as stated in their Objection to the Transfer, one of Aiken Gumps’ attorneys spent time researching a change of venue motion in OCTOBER 2011:
“What is also reflected on page 34 of the First Interim Fee Application, which is the Akin Gump October 2011 invoice, is that on October 7, 2011, one of Akin Gump’s attorneys, recorded 1.6 hours of time for ‘Revise and finalize venue memorandum’.”
In explaining her denial of the transfer motion, the judge stated that she considered the most important factor to be determining the economic administration of the case. She commented that if the transfer motion had been brought sooner it would have impacted that factor in favor of a transfer to Oakland since very little would have occurred in Dallas. The delay changed that factor to Dallas.
Judge Houser denied all four venue transfer motions. Her ruling can be summarized as follows:
Venue was proper under 28 USC § 1408 because the debtor had substantial assets in the Northern District of Texas – specifically, RE Loans’ promissory notes in Wells Fargo’s Dallas vault – for the 120 days preceding the commencement of the bankruptcy.
Thus, if the case were to be transferred, that transfer could only be under 28 USC § 1412. Section 1412 allows for permissive transfer in the interests of justice and/or the convenience of the parties. Here, the Committee and the Class Plaintiffs have failed to prove that venue transfer would be in the interests of justice or the convenience of the parties.
Accordingly, the Court denies the two motions to transfer RE Loans’ bankruptcy case to Oakland. The motions to transfer the venue of the two adversary proceedings are also denied because those motions were premised on the transfer of RE Loans’ bankruptcy. The moving parties may raise the issue of venue transfer of the adversary proceedings again if the underlying California class actions are brought within the jurisdiction of the Texas bankruptcy court or in the case of other significant developments.
In determining that permissive venue transfer is not appropriate, the Court weighs the following factors:
Location of Creditors
The noteholders are predominantly located in Northern California. This is the only factor weighing in favor of venue transfer.
Convenience of the Debtor
The proximity of the debtor does not weigh in favor of transfer: RE Loans conducts little business from its California office; rather, Macinack runs RE Loans from its offices in Austin and Michigan.
Witnesses
The majority of the parties who will testify in the bankruptcy proceedings – representatives of Wells Fargo, etc. – are not located in California, but in Dallas. The former officers of RE Loans who will testify will likely take the Fifth; moreover, their testimony will likely not be relevant because they are no longer in charge of the day-to-day operations of RE Loans. The court does not need noteholder testimony regarding the administration of the bankruptcy – unless DSI’s objections go forward. Sad though the plight of the noteholders is, the course by which they became noteholders is not in dispute, and their testimony will therefore presumably not be necessary.
Location of Assets
The principle assets of RE Loans are the promissory notes in WF’s vault and real property in Southern – rather than Northern – California.
Economic Administration of the Estate
A disclosure statement is already on file. A transfer would cause a delay of at least a month in the case. Such a delay will cost, at the current burn rate, at least $1,000.000. Additionally, in the event of transfer, the Committee will likely be represented by the same counsel, counsel based in Texas, who will have to travel to California at the expense of the Debtor. The cost to the Debtor of the Committee obtaining new counsel would be even more expensive in light of the substantial cost of getting Committee counsel up to speed.
Well now that we’re stuck in Texas we may as well have a
BBQ Ng Style ! Lets celbrate the burn rate.
Read: http://equitatus.wordpress.com/
Sheesh.
Updated the post with the documentation behind the fee applications. Some of them are
over 120 pages so be patient when downloading. Good hunting!
http://equitatus.wordpress.com/
new change of venue motion filed by mcgrane.
He is also asking for a Chapter 11 Trustee in
REL Bk in Tx.
Read these as wells his emails here.
http://equitatus.wordpress.com/