Walter gets sentenced to 5 years of probation.
Kelly sentenced to 18 months in prison.
Walter gets sentenced to 5 years of probation.
Kelly sentenced to 18 months in prison.
RE Loans filed for bankruptcy. While this was inevitable, no doubt, it’s still a shock to the system. Despite the fact that it’s our money, our lives and our futures, the real bankrupt entity is the Ng Family Dynasty. They’re morally bankrupt. They’re ethically bankrupt. Yet they’re still out there doing business and tricking more suckers like us out of their hard-earned savings.
Maybe Led Zepplin said it best in “When the levee breaks”
If it keeps on rainin’, levee’s goin’ to break,
When The Levee Breaks I’ll have no place to stay.
Mean old levee taught me to weep and moan,
Got what it takes to make a mountain man leave his home
Equitatus posted the following a few minutes ago: Continue reading
The Siena saga is nearly over, but info keeps landing in our laps. Therefore, we present another document with the following reader comment:
3 Page Notice that all claims close 15 April, then 26 pages of creditors. Wouldn’t you love to know how much American Document Destruction is owed, and exactly what their services were? It takes some major cajones to stiff your shredding company.
Click here for the document: Creditors Doc 265
Just know that the Siena story isn’t simply history. It is a story that is constantly evolving and unfolding right before our very eyes. It is an amazingly instructive story that can only help us if we pay attention. Continue reading
On May 14, 2009 Barney Ng wrote the following to RE Reno investors:
Barney’s commitment to paying off the loan should be lauded. His follow-through, however, is laughable (so is yours, Walter – you, too, signed the personal guarantee). Barney continues… Continue reading
Walter’s letter to RE Reno investors, dated November 11, 2010, states that the sale of the Siena “has not closed as of November 15, 2010.” That’s just the beginning of the absurdity contained within Walter’s letter, found HERE.
Walter states that “it appears likely that the aggregate distribution to R.E. Reno from the sale proceeds will be in the range of $2 million to $2.5 million.” Is Walter so senile as to actually believe that RER will command over half of the sale price when companies like IGT, Konami Gaming and the various city and state agencies are all vying for the proceeds? This is just another case of half-truths and nonsensical blue sky B.S.
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.
“So tomorrow is the auction. I’m a bit of an insider and have been following the activity closely. There was only one party who conducted a thorough due diligence inspection of the Siena as far as I can tell (I read vanity plates and the contractor signs on the F-150s in the parking lot). I think the opening bid will be $1. And I have no indication that there is a back up bidder. I don’t think that RE Reno or Loans has the deep pockets anymore to enter the fray. Meaning you investors will be wiped out 100%.”
We know Konami Gaming filed another objection yesterday. We read what REreno wrote above.
WHAT DOES THIS MEAN?
Aram Ordubegian and Andy “King” Kong, also known as Barney’s personal bankruptcy attorneys, apparently have their hands full handling all of Barney’s biz. King Kong’s bio lists his work on a case called S-King:
“S-King Estates, LLC Represented debtor-in-possession, a “ski down” resort in Salt Lake City, Utah, in heavily contested plan confirmation, conducting extensive discovery regarding lender’s “predatory tactics” and property valuation. Successfully confirmed plan of reorganization”
Interestingly enough, the work Aram and King Kong did on S-King resulted in the following on page 13 of this document (click here).
G. On the Effective Date, Barney Ng’s position as manager of the Debtor shall be terminated and the manager of the Reorganized Debtor, as defined in the Modified Plan, shall be David M. Luber. David M. Luber shall not receive compensation for serving as manager of the Reorganized Debtor.
Barney’s potential Siena golden parachute is $7,000,000. How’d he do on S-King? Anybody know?
Per the RGJ’s Ray Hagar this morning:
The auction of the Siena Hotel Casino in downtown Reno will take place next week in a Reno courtroom, where a national investment banking firm will try to sell the downtown resort that recently closed after a long string of financial problems.
“The reality is that the Siena has ceased operations and we are going to sell this in a bulk sale in one transaction to a singular buyer,” said Matt Sodl, managing director of Innovation Capital LLC in Los Angeles. “It will be a turn-key operation for that buyer and that buyer can either run it as it were, with the hotel and casino, or the buyer can decided if they want to operate a casino there or not.”
Those interested in participating the Nov. 10 auction are asked by Monday noon to submit a $250,000 deposit by wire transfer, evidence of financial wherewithal, a signed non-collusion affidavit and a mark-up of the Debtors’ form purchase agreement.
One-on-one tours of the property will be held on Tuesday with the auction Wednesday in the U.S. Bankruptcy Court of Judge Gregg Zive.
“We have marketed this thing far and wide and have a lot of interest in this asset,” Sodl said. “We have had a lot of interest from in-market competitors to buyers who are looking to get involved in the Reno market.”
It appears as if the Siena will be put on the auction block. No “binding, acceptable offer[s]” were made to buy the property.
Here is the closing paragraph from the Arent Fox filing:
WHEREFORE, based on the foregoing, the Debtors respectfully request that the Court enter an order: (a) establishing auction procedures with respect to the sale of the Debtors’ real and personal property; (b) approving and authorizing the sale by auction of the Debtors’ real property free and clear of liens, claims, interests, and encumbrances, subject to higher and better offers, (c) approving the assumption and assignment of certain unexpired leases and executory contracts to the winning bidder and establishing the cure amounts, if any, payable under such Assumed Agreements, or, in the alternative, approving the rejection of the Debtors’ unexpired leases and executory contracts to the extent such agreements are not assumed and assigned to the winning bidder, (d) approving that certain addendum to Innovation’s engagement letter dated October 28, 2010; (e) waiving the 14 day stay provided in Rule 6004(h); and (f) granting such other and further relief the Court deems just and proper.
Insider Researcher asked the following:
“Would you consider a new topic were we can discuss some of the pending litigation, the status of the case, and what it means to us as investors? Even discussing the closed cases, like Alegria/Grassi can help to uncover the truth or get a better understanding of how the Ng family and their attorneys operate.”
The answer is a resounding “yes”.
We’ll kick things off with a few updates. First, it appears as though Dwight Dixon Collins and Kathleen D. Collins have sued Walter, Kelly, Bruce, RE Loans, Armanino McKenna, Greenberg Traurig and Elizabeth Cobey, an attorney at Greenberg. Noticeably absent from the list is everyone’s favorite villain. Secondly, down south in Reno, the Debtors (Team Barney) failed to appear on the 25th, so the case has been continued until November 15th. Lastly, Judge Zive denied the application to approve the Kelly Law Group and Matthew Kelly as Special Corporate Counsel.
So let’s discuss. Have at it….
On September 22, 2010, Andy S. Kong of the law firm Arent Fox submitted a “Supplemental Statement in support of: (1) Motion for authority to obtain post-petition financing; (2) Motion for order authorizing debtors and debtors-in-possession to employ certain professionals in the ordinary course of business and to set procedures; and (3) Joint motion of One South Lake Street, LLC and Wild Game Ng, LLC for order authorizing the interim modification of the debtors’ hotel casino lease and land lease.”
We have already discussed the lease and the suggested modification (3), so let’s focus on items (1) and (2).
Item (1) is a motion for authority to obtain post-petition financing.
The debtors (Hi-Five, One South and Wild Game Ng) seek financing in the amount of $179,980.50. This financing would “enable Wild Game Ng to pay the premiums required for its general liability insurance.” Is it incorrect to assume that Wild Game Ng has not been paying its required premiums? Did the general liability insurance for the Siena lapse?
This “Premium Financing” arranged by IPFS Corporation of California “is an agreement for insurance premium financing. Notwithstanding the inadvertent references to ‘working line of credit’ and ‘credit line’ in the Financing Motion, the Premium Financing Agreement does not provide a working capital line of credit for the Debtors.” That may be the case, but it appears there’s more to this $180k loan than meets the eye. (We are told this has been approved within the past day or two.)
Let’s pull another paragraph for review to underscore this sentiment:
“The Premium Financing Lender’s liens and security interests shall be senior to the rights of the estates in this or any subsequent proceeding under the Bankruptcy Code and to the rights of any other person or entity claiming a security interest in the Collateral, except, with respect to any loss payments which reduce the unearned premiums, the rights of mortgagees or other loss payees, including RE Reno to the extent it has a valid, perfected, and enforceable lien against the assets of One South and/or Wild Game.”
WOW. By the way, the bolded, underlined text above was not added for emphasis. It was emphasized as such in the filing. What we think this paragraph says is that IPFS will get paid its $180k before RE Reno investors get their cash. Furthermore, it’s the third time the document calls into question RE Reno’s “purported” status as a secured creditor “to the extent it has a valid, perfected, and enforceable lien against the assets of One South and/or Wild Game.”
Item (2) is a “motion for order authorizing debtors and debtors-in-possession to employ certain professionals in the ordinary course of business and to set procedures.” Essentially, the Debtors need to pay a group of businesses a certain amount of money per month to perform services vital to the operation of the Siena. So who are these “certain professionals”?
Let’s start with #4 and work our way up to #1.
Number 4 on the list is Onsite Consulting, who’s fees would be capped at $60,000 per month. That’s $720,000 per year. Onsite Consulting provides hospitality management and consulting for restaurants, casinos and hotels. On its face, Onsite sounds like a perfect fit. However, another glance would lead one to believe this is nothing more than putting lipstick on a pig (yes, the Siena is the pig). Onsite may be able to smear some lipstick on the Siena, but it’s still the Siena.
Number 3 on the list is Elever Professional, clocking in at $10,000 per month. Elever does executive recruiting, interim placement and performance consulting. This makes no sense and unless we are missing something here, Judge Newsome should consider denying this request.
Number 2 on the list is KMC, Inc. at $8,000 per month. There are two KMC’s on the internet – one does information management. The other manufactures fluid film bearings. Regardless, $8k is a boatload of cash to pay KMC.
This brings us to Numero Uno on the list and our favorite inclusion. Number one, at $4,000 per month “is a California virtual law firm that offers a variety of legal services at cost-effective flat rates. Our virtual law offices and user-friendly website ensure efficiency in the services we render at reduced expense to our clients.
Our last two points have to do with this document is in regard to Part IV, The Lease Motion.
First, it appears Konami Gaming has objected to the Lease Motion. According to Kong, the Arent Fox attorney proposed to represent Barney’s companies in this BK and restructuring process, “The Debtors are still evaluating the objection but submit that Konami Gaming, Inc.’s objections may be addressed, at least in part, by the Stipulation.” Looks like Konami isn’t putting up with Barney’s BS. We’ll continue monitoring Konami’s involvement.
Secondly, Kong writes, “The Debtors do not believe the above clarifications are controversial.”
When people who trusted Barney have lost everything, everything is controversial.