Dear Fellow Investor,
This past week Dan Harkey mailed one or more letters to a select group of investors requesting that they approve the replacement of Point Center Financial as Manager under the Operating Agreement of National Financial Lending LLC and the REO (real estate owned) LLCs.
Upon a majority approval the new Manager would be National Financial Lending, Inc., a California corporation ("NFL INC"), which, as Harkey states: "is a totally separate corporation [Harkey] formed 17 years ago (May of 1996) and not related in any way to the mortgage pool investment National Financial Lending, LLC." Regardless of the name of the Harkey entity, transferring management is not in investors' best interests.
It is against federal law to move the assets of an estate in bankruptcy without the expressed permission of the bankruptcy court. No such permission was requested nor granted. These laws are in place to protect our assets.
Attorneys for the Creditors' Committee promptly filed an emergency motion requesting a hearing to prevent Harkey from moving these critical assets of the Point Center estate. Several related parties have stepped up submitted their own briefs to the court in support of the Committee's motion including David Lally who represents many investors as bankruptcy counsel; David Grant, counsel for the 87 plaintiffs in the civil trial; and John Menchaca, the Chapter 7 Trustee of the estate of the Preserve, LLC. In fact, the only party who is expected to object is Dan J. Harkey.
In response, bankruptcy Judge Albert ordered (in part) as follows:
"The hearing on the motion for appointment or conversion is advanced to Wednesday, July 31 at 2:00 PM at the US Federal Courthouse at 411 West Fourth Street, Santa Ana, CA 92701." (All investors are encouraged to attend - see directions below.)
"All ballots and letters or correspondence received requesting a change in management under the Operating Agreement of National Financial Lending, LLC are of no force and effect pending the hearing scheduled below. PCF's role as manager under the Operating Agreement of National Financial Lending, LLC, shall not be changed or altered unless and until further order of the Court. Debtor and its management are enjoined from acting upon any such ballots until further order of the court."
"The Official Committee of Unsecured Creditors is hereby authorized to send to all persons and entities who received the PCF Replacement Letter, a letter/notice notifying them that regarding the PCF Replacement Letter there will be no change of the manager under the Operating Agreement of National Financial Lending, LLC unless and until further order of this Court. This notice is to be one sentence only and is to avoid any advocacy or inflammatory rhetoric."Judge Albert also ordered Harkey to transmit the following letter on Point Center letterhead to the recipients of Harkey's letter as follows:"Dear Members,As you are aware, I sent a letter to you a few days ago dated July, 2013. This letter asked that you vote to transfer the Management Rights from the Debtor, Point Center Financial, to another entity I own entitled NFL, Inc.Please be advised that I am now asking you to ignore this letter, and to take absolutely no action in response to the letter. The request to transfer management has been rescinded.PCF shall remain the manager of NFL, LLC. If you have sent a consent to change of management, I request that you send to PCF a letter withdrawing that consent. Please send a copy of that withdrawal to my attorney, Robert Goe at rgoe@goeforlaw.comSincerely,Dan J. Harkey"How you can help:It is important to understand that if you received and responded to the original Harkey letter consenting to a change in management, you should immediately send PCF a letter withdrawing your consent. You can email your withdrawal letter to rgoe@goeforlaw.com.
If you want to help yourself, your fellow investors, and the creditors committee to advocate in our best interests to the bankruptcy court and have received the recent Harkey letter and related ballots please scan and forward your documents to us at pcfinvestor@gmail.com.
Furthermore, if you have not filed a claim with the bankruptcy court, now is the time to do so.
We want to encourage as many investors who can to attend the hearing at the federal courthouse in Santa Ana on July 31 at 2:00 PM. Your presence will show the court your concern. In our view, appointment of a Trustee or conversion to a Chapter 7 is the appropriate course of action. Chapter 7 would allow the appointment of a Trustee and fiduciary who will wind the business down in an orderly fashion that is in the best interests of all investors. Otherwise, Harkey will use Chapter 11 as a shield to buy time to milk our remaining assets.
For those who intend to attend the hearing, here is a map to help with location and parking. You must enter the courthouse from West 4th Street. All other entrances are blocked. Google maps shows parking at Markers 'A', 'B', 'C', and 'D', and I've shown additional parking at the Santa Ana Civic Center, and there is parking on W. 5th Street, behind the courthouse.
In addition to the above, we wish to point out that the Harkey letter you may have received grossly misrepresents the outcome of the recently completed phase one of the civil trial.The Charton plaintiffs won this phase and were awarded over $11 million in damages against both Dan Harkey personally and Point Center Financial for breach of fiduciary duty and breach of contract. The civil court also found that Harkey specifically defrauded Lloyd Charton.
We will post more details of the civil trial, the award, and what it means to you in our next update. Stay tuned.
Sincerely,
PCFInvestor
|
No comments:
Post a Comment