Dear Fellow Investor,
The US bankruptcy court Judge Albert ordered a Trustee be appointed to manage Point Center Financial. The order stated: "the Court has found good cause to grant the Committee's Motion" and ordered The Office of the United States Trustee to immediately appoint a Chapter 11 Trustee.
In recently filed motions and briefs it was revealed that in 2012 Harkey transferred $2.3 million of investor trust funds from National Financial Lending to Cal Comm Capital and paid his attorney over $1.2 million from NFL for representation in the Charton lawsuit - even though the NFL LLC was dropped as a defendant long long ago. Harkey also apparently diverted over $300,000 from the Preserve to his attorney, Benice, in 2012.
The reason these transfers are important is that Harkey represented to the bankruptcy court under penalty of perjury that Point Center had $109 million dollars in assets against $54 million in liabilities. If this was actually true, then Point Center should have a positive net worth of $55 million and adequate resources to cover its obligations, including the recent San Diego judgement for $2.7 million dollars on the Mi Arbolito project. Why then, would Harkey need to play a shell game with NFL funds? Harkey's attorney, Jeff Benice was quoted by the press as saying that Point Center had no assets. Rather than speculate, we prefer to give the new Trustee time to get to the truth.
In the meantime, the entire court gallery was full except that Dan Harkey and his entourage were nowhere to be seen; and his bankruptcy counsel appeared only by phone.
In addition, Harkey was ordered to turn over the names and addresses of all recipients who received letters and ballots "suggesting or making reference to replacing PCF as servicer and/or manager under any agreement." This will allow the Trustee to notify investors that "Any ballot, letter or correspondence received, in response to a solicitation from the Debtor (Harkey), that casts a vote in favor of replacing PCF as servicer or manager under any Agreements, is of no force and effect and PCF shall not be removed or replaced, as the servicer and/or manager, unless and until further order of [the] Court."
Coincidently, the Point Center web site mysteriously disappeared from the Internet. In response the Court ordered Harkey to "take all steps necessary to reactivate PCF's website and all on-line services if so ordered by the Trustee;" This hopefully means that anyone denied access to their MyPCF accounts, such as the Charton plaintiffs, will soon have their access restored.
The appointment of a Trustee is a good thing and will ensure an orderly and ethical management of the Point Center estate while protecting the remaining value of our investments. In time a clear picture of what happened to our investments and why should emerge. We recommend patience and cooperation with the new Trustee who will have his hands full for a while until he can get his feet on the ground.
In the mean time, every document filed with the bankruptcy court can be found online at the following URL:
We recently updated the site content for the bankruptcy so all of the information at the above link is current as of the end of the day today.
We promised details on the Charton litigation decision and information is on the way. In the mean time, a new organization has been formed based on Point Center's breach of fiduciary duty. It's called Association for Senior Investment Victims. They are working with Madoff victims groups as well as others. For more information go to:
It's free to join. Stay informed and help stop others from falling victim to predators like Dan Harkey.
Sincerely,
PCFInvestor
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