Ng’s Didn’t Want Us To Talk

Didn’t have time to post this earlier today.  In a move that surprised absolutely nobody, Walter & Kelly’s attorneys filed this document in an attempt to gag us lowly investors.

Heaven forbid someone actually told the court the truth about these slimeballs  😉

Here’s a link to the filing:

Defendant Walter Ng’s And Kelly Ng’s Statement Regarding Investor Testimony

Breaking News

Walter gets sentenced to 5 years of probation.

Kelly sentenced to 18 months in prison.

Sound off.

Sentencing for Walter and Kelly Ng — MARCH 5th at 2:30 PM in Oakland

Re:

United States v. Defendant(s) Case Number 2011R00248 and Court Docket Number 13-CR-00650   United Sates v. Defendants Walter Ng and Kelly Ng

There’s been some talk on this site about Walter & Kelly’s sentencing.  And we’re aware that it’s not just us victims reading this site anymore.  We have readers from the media as well as law enforcement/judicial.  There’s a lot to learn here about what these crooks did to us and how they stole our hard-earned money.

Life isn’t fair sometimes and we’ve received the short end of the stick in terms of this investment and the fallout that has ensued.  Here’s to the legal system dealing a knockout punch to the hucksters who robbed us blind.

The enclosed information is provided by the United States Department of Justice Victim Notification System (VNS). As a victim witness professional with the United States Attorney’s Office, my role is to assist you with information and services during the prosecution of this case. I am contacting you because you were identified by law enforcement as a victim during the investigation of the above criminal case.

The sentencing hearing for defendants Walter Ng and Kelly Ng has been set for March 5, 2014, 2:30 PM at Courtroom 1, 4th Floor, 1301 Clay Street, Oakland, CA before Judge Phyllis Hamilton. You are welcome to attend this proceeding; however, unless you have received a subpoena, your attendance is not required by the Court.
guilty

Jail Time Coming for Walter & Kelly?

Dan Noyes on Ng’s Fate:

The charging document, “the United States of America versus Walter Ng and Kelly Ng,” says they, in effect, looted the funds by making repeated cash withdrawals. The Ng’s are charged with “structuring transactions for the purpose of evading a reporting requirement;” 11 counts for Walter, 20 for Kelly. Each count carries a possible 10 years in prison and a $500,000 fine.

Quick math:

  • Walter 11×10 = 110 years, $500,000 fine
  • Kelly 20×10 = 200 years, $500,000 fine

May they live that long to serve out their potential prison terms….

Where’s Bruce, we ask?

Courtesty KGO

Courtesty KGO

While many of us are beyond the age when a tax write off is helpful, it may provide solace for some.  John Robie’s message to everyone who got ripped off:  KEEP UP THE FIGHT.  Anyone who invested in RE Loans, RE Reno, or Mortgage Fund ’08 needs each and every one of you to stay strong and keep the pressure on.  Kudos to Brown and Bernard Wittenburg, amongst many others, for their efforts.

Finally, thanks to Dan Noyes for being the only reporter in the NATION who has stayed on top of this story.

http://abclocal.go.com/kgo/video?id=9273735&pid=9273730

“Freedom Lies In Being Bold”

The title is a quote from the author Robert Frost, which is certainly apropos as we’ve just unearthed this “COMPLAINT FOR AIDING AND ABETTING BREACH OF FIDUCIARY DUTY”.

It was filed against Armanino McKenna in the names of three brave investors who have taken on the burden of leading the charge for the greater good of the whole.

Thank you to Theodore Jones, Jeanie Kayser-Jones and (not the author) Robert Frost.

Link to Lawsuit

Sound off below and let us know your thoughts.

SEC Sues Walter, Kelly and Bruce for Fraud

By now, you’ve all likely heard the great news.  Stories are everywhere.

Here

Here

Here

and

Here (my personal favorite as it calls them “fraudsters”)

So…

What’s it mean for Mortgage Fund ’08 investors?

What’s it mean for RE Loans investors?

Does it mean anything for RE Reno investors?

Weigh in….

No Means No – REJECT THE PLAN

Why You Should Reject The Reorganization Plan

We (and by “we” I mean those of us who aren’t in on the scam) can make this easy on ourselves.  We really can.  Vote no.  Reject the plan.  I’m voting to REJECT THE PLAN.  All you really need to know is one simple item.  When your packet arrives in the mail, you’ll find a nine (9) page letter from the Official Committee of Note Holders of R.E. Loans, LLC, et al.  Search for the BIG BOLD CAPS.  Focus on this sentence:

THE COMMITTEE RECOMMENDS THAT YOU VOTE TO ACCEPT THE PLAN

Interestingly, the letter from the “committee” “elected” to represent us doesn’t actually list their names.  It doesn’t matter.  Here’s the math:

Any Committee Member = Walter Ng

The very people recommending urging us to trust them and approve their plan are the same people who been accused of taking distributions when the rest of us got NOTHING.  They’re the same people who were purportedly spotted dining with Walter and Bel and they’re the same people who will, without a doubt, screw us over to protect themselves and their friends.

The nine page tome suggests five times that we accept the plan.  I suggest six times that we REJECT the plan.

The last time we “voted” on a plan, our ballots ended up floating in the proverbial Bay.  Our votes didn’t matter because once Walter and Kelly cast their votes, it was over.  The process is slightly different this time around.

The Class of Noteholders will have accepted the Plan if at least two-thirds in dollar amount and more than one-half in number of the Allowed Noteholder Claims that are actually voted are cast in favor of the Plan.

Walter can line up the two-thirds in dollar amount votes.  Can he line up MORE than 50% of the entire votes that will be cast?  I don’t think so.  Many of our busiest traffic nights on this very blog saw over 1,800 unique views.  We’re out there.  We can “win” (Yes, I’m using the term “win” rather loosely).  We can beat Walter at his own shell game.  We need to vote.  Every one of us for each and every account we hold.

A few other notable items from the expensive packet of crap they sent us:

Mackinac Partners and Jim Weissenborn would remain in charge to liquidate our assets.  They’ve done such an absolutely shitty job to-date that we should not allow them many more years of revenue on our backs.

Page five (5) item B discusses the “Plan Compromise”.  The Committee got this right in that you should read this in detail.  My reading says this is such a blatant cover your ass and screw the majority it’s not even funny.  It’s sad.  And it should be criminal (is ANYONE at the FBI or SEC actually listening?).  The only compromise we’d be making is to our own detriment.  Read this:

The Plan Compromise resolves potential objections to, or grounds for subordination of, the Noteholders’ Claims, and further eliminates the risk that Noteholders could be subject to future litigation over the recovery of distributions paid to Noteholders between November 2007 and the Petition Date.

Do you know what this means?  It’s a GET OUT OF JAIL FREE CARD in a legal sense for Walter, Kelly, Barney, Bruce and everyone who got money when the rest of us couldn’t.  It glosses over the fact that the exchange agreement was potentially illegal, but who cares when the committee elected to represent us doesn’t actually represent us?

If you’re worried about the sweet little bank with the stagecoach, don’t.  Wells Fargo will be just fine under this plan, because if the plan is accepted, we will be giving them a full release.

The document also warns us about the downside of rejecting the plan.  This downside would be a Chapter 7.  While Pearl, Gene, Allen Cone, Sherrat Reicher and their cronies warn us about the ominous nature of a 7, I believe there are many, myself included, who would welcome a 7.  This gives a Chapter 7  Trustee supreme power.  Walter would be instructed to bend over and cough while we inserted the Hubble telescope up his anus.

Finally, our friends on the committee estimate a distribution of  approximately $34-$63.6 million for Distribution to Holders of Allowed Claims, including Noteholders”.  INCLUDING Noteholders?  We’re still second fiddle, but this time we’re likely taking a back seat to the attorneys at Akin Gump and all the other firms eating our cake.  Do the math on the low number and we’re looking at a glass that isn’t just half-empty, it’s entirely empty.

I urge you to VOTE NO.  REJECT THE PLAN.

I’m John Robie and I approve this message.

RE LOANS FILES FOR BANKRUPTCY PROTECTION

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

Siena Update

Thanks again to the inscrutable blogging superstar behind REReno for the attached document and the willingness to provide their thoughts: Continue reading

This Is Insulting

Lunacy is defined as “Insanity, especially insanity relieved intermittently by periods of clear-mindedness.”  What’s missing at the Bar-K office is the part about intermittent clear-mindedness, as evidenced by their statement below.  They certainly have the remainder of the definition covered.

REL Statement

Is Anyone Surprised?

We thought the Tumwater story was over and that we could close the book on at least one awful Ng investment.  Turns out we were wrong.  Two newspapers, the Olympian and the Tacoma News Tribune, report that the folks who purchased the brewery property through their LLC (“It’s the Water LLC”) are suing you-know-who.  It’s the Water seeks to void their $12 million purchase of the agreement and seeks a return of their $360,000 deposit. Continue reading

Barney’s “Hobby” Revisited

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

Do you see any creditors on the list that spark your curiosity?

 

Did RE Loans “Park” Money?

It has come to our attention that RE Loans may have allowed some of its investors the ability and/or option to “park” money in the fund.  “Parking” is a term used to describe money that is deposited into a fund, but not necessarily invested in the fund.  Rumor has it that R.E. Loans offered a parking service for some of its preferred investors who wished to place their money somewhere on a temporary basis.  The interest earned may or may not be reported to the IRS, some have speculated.

For example, it seems possible that the $5,000,000 returned to J. Robert (“Eddie”)  Orton, III, on March 30, 2007, just a day or two before the “freeze” letter was mailed to investors, was money that had been “parked.”  Same with Len “Austin Val Verde” Epstein’s return, perhaps? Continue reading

Barney’s Failed Experiment – The Siena…where the fun never ends…

Interested in staying up-to-speed on the Siena?  Click on the two links below and let us know if you can find any items of interest:

Cash Flow July 2010

Cash Flow August 2010

Tumwater Water Documents

If you like documents, you’ll love this posting.

We don’t want to sensationalize this posting, however.  Some documents are informative, many are not.  It has taken many months to cobble together these documents.  All-in-all, there are too many people to thank for assembling this information, but you know who you are and hopefully that’s thanks enough.

File management proved to be a severe challenge, so consider this more of a document dump than an orderly, numerical library.  Feel free to save the documents in a file on your computer and peruse them at your own speed.  Use this posting to discuss your findings and perhaps this will lead us all back to our inner “Researcher” by potentially helping us figure out who got the water money and why (and then where it went!).

Continue reading

RE Reno Seven Months Later…

On May 14, 2009 Barney Ng wrote the following to RE Reno investors:

I recognize and appreciate the trust that you as an investor have placed in me in originally providing this Loan to the Siena, and because of this I am committed to the pay-off of the loan.

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

Weissenborn Lives!

Thanks to bluemoonagency for the heads-up.  After eight days of silence, Team Weissenborn finally found the time to give the peons an update.  Why is the update dated December 6th, yet posted two days later?  Bigger questions exist, however.  While Weissenborn’s memo is short, it says a lot and leaves us pondering the following:

  1. How much existing debt remains outstanding?
  2. What is the existing interest rate?
  3. New advances?  For what?  Please explain.
  4. New advances “accrue interest at a 4% higher rate”.  Higher than what?  The existing interest rate?
  5. We are being conditioned to accept the fact that Weissenborn and his cronies will take out a new loan in an effort to pay off the WFF LOC, again subordinating noteholders to junior status.  We know what a new line of credit means.  It means our money is gone and Weissenborn, Lend, Inc. and all the others eating and drinking from the Bar-K trough are getting fat and happy at our expense, laughing all the way to the (offshore) bank.

Anyway, mark your calendars for February 28, 2011!

Weissenborn Update

RE Loans # C0390 – Canyon Club (9% of REL portfolio)

Thank you Equitatus for bringing up one of our “favorite” REL investments, Canyon Club aka Snake River Sporting Club.  If you like documents, this post is for you.  Per Equitatus:

Q: Whats RE Loans biggest investment?A:  C0390 Canyon Club 61,146,348 9% of RE Loans (EDITOR’S NOTE – While technically true, if you add up Loan #s P0097 Georgetown/LochenHeath at $90M, Canyon Club is the second largest loan).

What does valuation expert Mary Ann say about it, “We are estimating that the loan will be paid in full seven years after the due date which is 1/7/2016, with several interim payments along the way beginning in 2011. As shown in the table, the estimated fair market value of the note is $16,821,364 or$16,800,000 rounded which is $28 per $100 of face value.”

Q: How did we end up in this mess? Continue reading

The Long Trail Of Lies Continues

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.

Continue reading

The ‘Mourning’ After

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.

Continue reading

Barney Finally Called On His High Jinx

 On October 6, 2010 we discussed Barney’s Supplemental Statement filing.  This filing asked the bankruptcy court to allow Barney’s group to hire a few firms, amongst them the Kelly Law Group.  KLG was to provide legal services to the Siena.  As we all know, the Kelly Law Group is run by (virtual) legal dynamos Stephanie & Matthew Kelly, also known as Barney’s daughter and son-in-law. 


While the SEC allowed its employees to spend many of their office hours watching pornography on the internet instead of prosecuting the NG family and Bruce Horwitz, the lawyers in the Office of The U.S. Trustee were working hard, as evidenced by their October 20, 2010 filing objecting to the arrangement between Barney NG and the Kellys.  The Attorneys for the Acting U.S. Trustee August B. Landis deserve a standing ovation thus far.

In 13 easy-to-comprehend pages, Landis’ attorneys spell out exactly why the sweetheart deal Barney put in place with his family doesn’t pass muster and would have been denied by Judge Newsome had the Siena not shut down earlier this week.  It is comforting to finally see Barney take a right hook to the chin.  Perhaps he didn’t realize he’d get called on his bullshit.  This isn’t the bush leagues anymore, Barney.  You can no longer make up the rules as you go along, enriching yourself and those you deem worthy.  You are now playing in the big leagues.  Everything you do shows up on PACER.  Sure, the RGJ and other newspapers may not cover ever move you make, but you can be certain the team behind http://www.barkinvestors.blogspot.com will.  A simple Google search leads people to this website.  The web traffic shows people are coming to this website often, looking for updates on your latest transgressions.  You and your Bar-K cohorts fooled us for years.  Those days are over.

Getting back to the Landis filing, here are the salient points:

RELEVANT FACTS:


1.  Matthew Kelly is Barney Ng’s son-in-law and grand-son-in-law to Walter Ng.
2.  Barney Ng is the managing member of each of the debtors and has served in that capacity since May 8, 1998.
3.  Barney Ng is the 100% owner of Wild Game Ng, LLC.
4.  Barney Ng is the sole unsecured creditor for Hi-Five Enterprises, LLC ($75,000).
5.  Barney Ng and Walter Ng are co-debtors with One South Lake Street, LLC on the secured note to RE Reno, LLC.
6.  Walter Ng is the registered agent and manager of One South Lake Street, LLC.
7.  The Kelly Law Group – Matt Kelly was paid $4,656.70 on the petition date.
8.  Matthew Kelly is not licensed to practice law in Nevada, only California.
9.  The Kelly Law Group, LLP is “a virtual law firm.”
10.  Although the Application states that the Applicant was employed since December 2009, the Engagement Letter is dated July 22, 2010.
11.  Barney Ng’s testimony at the 341 hearing state in-part:
      a.  Matthew Kelly was employed on an “oral basis before the bankruptcies were filed “because he’s my son-in-law”;
      b.  the flat fee rate of $7,000 per month is a “family discount”;
      c.  Matthew Kelly was employed by Barney Ng on numerous personal matters;
      d.  Matthew Kelly was in-house counsel for Bar-K, Inc., an entity owned by Barney Ng and where Barney Ng was also employed;
      e.  Matthew Kelly left Bar-K, Inc. employment when Barney Ng left Bar-K, Inc. employment;
      f.  Walter Ng and Barney Ng’s brother were also involved with Bar-K, Inc.;
     g.  initially, Matthew Kelly was working on mostly personal issues for Barney Ng (70% of his time), not the Debtors; and
      h.  Barney Ng has an unsecured claim of approximately $35 to $36 million, that he intends to subordinate to other unsecured claims.
12.  The first application to employ the Applicant was filed on September 8, 2010, forty-nine (49) days after the petitions were filed.

Whew.  That’s a lot to digest, but we’re not done yet!

In the “Application Of Authorities To The Relevant Facts” section of the filing, Landis’ team describes  why the Kelly Law Group is not eligible to receive Barney’s rich handout.

 A professional in a bankruptcy case should not be put in the position of having to divide his loyalties.  Matthew Kelly, as Barney Ng’s son-in-law, is an insider and therefore is NOT a disinterested person. 

The Application and the accompanying verified statement of Applicant and Barney Ng, do not adequately disclose the significant connections between the Applicant, Barney Ng and Walter Ng. 

Additionally, Applicant gave a less than full disclosure that his “four years working in-house for one of California’s largest private commercial real estate lenders” was Bar-K, Inc., a company that is owned by Barney Ng and also involved Barney Ng, Walter Ng and Barney Ng’s brother.  Applicant’s statement that he “is a disinterested person as that term is defined in 11 U.S.C. § 101(14),” shows a lack of understanding of and appreciation for the requirements of disclosure by professionals working for a bankruptcy estate.

Applicant’s legal abilities are not unique or extraordinary enough to warrant overlooking the obvious concerns regarding his allegiance to his family over the interests of the estates.

Allow us to summarize:

1.  The U.S. Trustee and his staff won’t stand for Barney’s bovine feces.
2.  Matthew Kelly attested to the fact that he and his firm would be a “disinterested” party as required by law.  Landis called him on his blatant lie.  The California State Bar will want to look into this ethical breach.
3.  Barney’s $7,000 per month gravy train broke down and became unhitched.
4.  How much would this contract cost if the ‘family discount’ weren’t applied?
4.  We still haven’t recovered a single cent of our investment, unlike favored investors Leonard Epstein and Phillip Tagami.

Please add your own analysis below in the comments section.

**BREAKING NEWS** SIENA HOTEL SHUTTERED

Inside sources report that the Siena will close at noon today. 

This page will be updated as the story unfolds.

Per a document filed by Hi-Five’s attorneys yesterday:


“…liquidity constraints have required that the Debtors shutdown their hotel operation until adequate operating capital can be obtained. The Debtors intend to complete their current negotiations no later than October 29, 2010, at which time they will either seek Court approval of a transaction that will provide for the reopening of the casino or reposition the Cases consistent with a longterm shut down of the business and the marketing and sale of the real estate asset. Consistent with this  repositioning, the Debtors hereby withdraw certain of the motions and applications currently set for hearing on October 21, 2010.

“On October 8, 2010, the Debtors were faced with a serious liquidity crisis precipitated by their inability to pay current invoices due to NV Energy with respect to their utility services. The Debtors considered a full shutdown of the Siena at that time. However, several investors remained interested in financing the property’s operations, even on a very compressed timeframe. Accordingly, in order to allow these negotiations to further develop, the Debtors took the interim step of closing the gaming floor at the Siena, thereby eliminating their
minimum bankroll requirement and freeing up cash to pay various operating expenses, including outstanding utility bills, Nevada gaming taxes, and certain insurance premiums.  This drastic step provided the company and Innovation with additional time to continue dialog with three interested investors. While one of those parties declined to go forward for reasons unrelated to the Siena, two others have remained in active negotiations with the Debtors and their advisors. However, due in part to the loss of revenue precipitated by the closing of the gaming floor, the Debtors have quite simply run out of time and money. As of October 20, 2010, they concluded that they are unable to continue to fund operations while these negotiations play out, and the Siena is currently in the process of being shutdown on at least an interim basis.”

We will keep you posted on all further developments.

Links Galore:

Reno Gazette Journal
Channel 4
Channel 2
KOLO TV
Las Vegas Sun
Siena’s own website
Letter To Siena Employees
REreno blog

PHOTOS:

Assignments to Wells Fargo Foothill

A quick search of the Harris County (TX) Clerk’s Office website shows that RE Loans assigned its interests in the Bravo Marshall development to Wells Fargo Foothill (pasted below).  It’s not difficult to track down these assignments to WFF.  REL noteholders were led to believe that each and every loan was assigned to WFF.  Is this the case?  If not, why would B-4 Partners exclude certain properties from the deal with WFF?  If there were certain properties not assigned to WFF, where did they go and who got them?  Could they be viewed as preferential payouts to preferred investors?  What makes one investor more important than another?  If this happened, B-4 could be much more ethically challenged than we imagined.  As we methodically work our way down the list, loan-by-loan, we’ll see if this is true. If anyone has information on this subject they care to share, please do so here.

File Number Description
Type
Vol. Pg.
Names File Date YYYYMMDD Sec.
Lot
Block
Misc.
Pgs Film Code
20080153115 SEE INSTR
ASSGN
Grantor: RE LOANS LLC
Grantee: WELLS FARGO FOOTHILL LLC
20080328

9 RP055290556
20080433825 SEE INSTR
SUBORD
Grantor: RE LOANS LLC
Grantee: BARRINGTON SEC 2
20080819

2 RP059241310
20070467886 KINGWOOD LAKES SOUTH
ASSGN
Grantor: RE LOANS LLC
Grantee: WELLS FARGO FOOTHILL LLC
20070801 01

INSTR

5 RP047860917
20090113699 BARRINGTON SUBDIVISION
PT REL
Grantor: RE LOANS LLC ETAL
Grantee: BRAVO MARSHALL COMMUNITIES LP
20090319 01

B0002
INSTR

5 ER010971715
20090113702 NO 096693Z
REL
Grantor: RE LOANS LLC ETAL
Grantee: BRAVO MARSHALL COMMUNITIES LP
20090319

5 ER010971720

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Siena BK Venue Change Confirmed

The latest filing from Barney’s attorneys lists the following:


Hearing
DATE: October 21, 2010
TIME: 11:00 a.m.
PLACE: 300 Booth Street, Courtroom 3
Reno, NV 89509

The judge is the Honorable Gregg W. Zive .  Zive is also handling the Station Casinos BK.


The venue change is good news.  It takes the filing out of Barney’s backyard and moves it to Reno, the location of the Siena.  If you happen to be in Reno on the 21st, please drop on by 300 Booth Street, Courtroom 3.  It should be rather interesting.

Here’s the meat of the filing, which was filed in response to the objections raised by Konami Gaming:

Konami, who had not previously raised concerns with respect to the Lease Motion and therefore was not a party to the Stipulation, filed an objection to the Lease Motion. The Debtors submit that Konami’s objections and concerns have been addressed in full by the Stipulation except for Konami’s unfounded request that it be insulated from potential disgorgement of post-petition payments it receives from the Debtors in the event that Wild Game ultimately lacks the funds necessary to pay One South on account of the administrative claim granted to it under the Stipulation.

 The Debtors submit that the issue of disgorgement is premature since the Stipulation merely
alleviates Wild Game from having to make full Contract Rent (as that term is defined in the
Stipulation) payments for a limited period of time , thereby allowing Wild Game to pay trade creditors and contract parties such as Konami, and the Stipulation otherwise reserves the
rights of parties-in-interest and establishes a framework for the intercompany claims between
Wild Game and One South to be resolved at a later date.

CONCLUSION

WHEREFORE, based on the foregoing, the Debtors respectfully ask that this Court grant the Lease Motion with the modifications as reflected in the Stipulation.

 Our conclusion?  Let’s see how Zive rules on this issue, as well as the $4,000/month payments to Matthew Kelly.  The half a million a month payments from Wild Game Ng to One South Lake would be sliced to a “mere” $11,000, but one thing is clear – Barney still wants to be paid by Barney.

Please feel free to share your thoughts and opinions in the comments section below.

Wikipedia Needs Your Help

There’s so much left unsaid on the Siena’s Wikipedia site.  Who wants to take a stab at correcting the record?

http://en.wikipedia.org/wiki/Siena_Hotel_Spa_Casino

Siena Hotel & Casino – Is The End Near?

According to a local TV station, the Siena’s casino floor is not currently open due to money woes. 

READ THE STORY BY CLICKING HERE

More here, too

Comments on the Siena’s Supplemental Statement re: BK

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.”

Okay.  But what about document number 2594653 filed in Washoe County listing RE Reno as the secured party?  It’s the UCC Financing Statement for those interested in reviewing the document.  Furthermore, there’s the January 12, 2004 personal guarantee letter currently being ignored by Barney and Walter, but it doesn’t necessarily “perfect” RE Reno’s security interest.  The language from that letter reads as such:

01/12/04

Dear Investor:

Thank you for your investment in RE Reno, LLC.

RE Reno is the sole investor in the 50 million dollar

 

1st mortgage on the Siena Hotel, including the parking lots, 

hotel equipment, kitchen equipment and dining room

equipment.

To reinforce our position regarding  the 1st mortgage on the

hotel, we hereby personally guarantee the note secured by

the First Deed of Trust on the Siena Hotel.

Barney Ng

Walter Ng

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.

We are not a simple document preparation service, but California licensed attorneys dedicated to providing superior legal services at fair rates.”
The Siena, as far as we know, is located in the state of Nevada.  This virtual law firm is located in California.  Prior to founding the firm, one of the firm’s partners “served as General Counsel to one of the largest private commercial lenders in California, where he engaged in real estate and corporate transactions, advised on employment and regulatory matters, and coordinated litigation and bankruptcy matters throughout the country.”
His name?
Matthew Kelly.
How amazingly self-serving is it of Barney’s Hi-Five & Wild Game Ng to include his daughter and son-in-law’s firm, the Kelly Law Group, LLP on the Ordinary Course Professionals list?
All-in for these four groups?  $984,000 per year.

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.