Dear Fellow Investor,
The Point Center Financial 341(a) Creditors Meeting was held last Thursday, May 2 at the Ronald Reagan Federal Building. Dan Harkey appeared and was sworn in to testify under oath. His testimony was as revealing as the questions asked. He was accompanied by CFO Gwen Melanson, bankruptcy attorney Richard Goe, in house counsel Dale Martin, and civil trial attorney Jeffrey Benice.
The meeting was conducted by Frank Cadigan, Assistant Trustee for the US Department of Justice and his staff who tape recorded the session. Also in attendance were several attorneys an at least 50 investors.
For the benefit of investors who were unable to attend we have posted the following links where you can listen to the entire 3-1/2 hour session at the following URL's:
YouTube:
SoundCloud:
Representing the Creditors Committee was attorneys Kristine Thagard and Richard Marshack from the firm of Marshack Hays, LLP.
Attorney David Lally was in attendance representing the plaintiff/investors involved in the Investors v Dan Harkey & Point Center Financial civil trial at the Orange County Superior Court. Richard Davis, an attorney representing the judgement creditors: Brewer Company, Dynelectric, and Division 8 was also there.
The 341 meeting takes place about 20 to 40 days after the debtor files a bankruptcy petition. Often the 341 is informal and short but the debtor must attend, must testify under oath, and must be able to answer the questions to the satisfaction of the Trustee, creditor attorney(s), and any individual creditors.
The creditors who are listed in the debtor's petition are given notice but are not required to attend. Creditors who do appear are granted the opportunity (after the creditor attorneys) to ask questions. But more often than not, creditors often do not attend. It's strictly a fact-finding meeting, but the debtor can be asked to produce books, records and other documents related to his business's finances.
Last week's meeting deviated slightly from the above expectation. It is doubtful that the Trustee expected to walk into a room fully filled to the brim with creditors, have to listen to Harkey's entourage answer questions for him, or see the meeting turn contentious. Nevertheless, that's what we interpreted from the CD. Listen for yourself and draw your own conclusions. The recording speaks for itself and should stand on its own merits.
CORRECTION:
We would like to correct some mis-wording in the Civil Trial Update we sent earlier this morning. The corrected paragraph should read:
"Gwen Melanson took the stand last week and testified that borrowers never paid origination fees out of their own 'independent' borrower funds at closing. She stated that once investors purchased "shares" in NFL that their money "belonged" to NFL. She then tried to claim that loan origination fees and Interest hold-back accounts were funded with NFL's funds. Let's examine this for a minute."
We regret any confusion.
Sincerely,
PCFInvestor
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