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191- 5 - ' ' , - ' rile-{10 '_ ' ,_ _"" ' .3 ocean DEVELOPMENT COMPANY . _ 1 5 . Younare a han'clal- consultant who occasionally'adxases'very...

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191- 5 - ' ‘ , - '
rile-{10 ‘_ ' ,_ _"“ ' . :3 ocean DEVELOPMENT COMPANY . _ 1 5 . Younare a fihan‘clal- consultant who occasionally'adxases’very selected'clients'on workot1ts"-
A company comes to your office one 'da‘y' seeking .Iyoiir help;- The company is called Ocsed
Development Company; and they have hée‘n' In the development and property management;
business for over 20 years". --’I'he principals of the" company,- Mr. 13111111 arid Mr. Ilvlclr1t‘osl1,-1
were previously with a l‘ar-g'e‘ hitemational tonstmction company prior. to forming IOc‘sed. I
. You have been acquainted with the Company and its principals for about five yea—1E5, j
inasmuch as they have retained your services in the past. You believe them to be .I
.lextremely honorable individuals. Ybu also know that the local financial and hivestmelnt '
Iclommunity shat-[Fa your opinion. It 18' well known that Ocsed and its principals have malcleI ' 1
vs1gnificant profiils for their investors 1n the past ahd their cr'edit' rating with h13tit‘11tiorial:.1 I lenders and penLioo fades has been first rate. Ocsed Develchpment Company has never .
had a problem in raising equity or debt financing in the past for any project they wished ! _|
to do. Ocse‘cl if a well diversified company. Their portfolio consists of three, 035 e}_
buildings that they have built and developed, hereinafter known :15 Ocsed 1 O-icsed :,2 a1I1d 1 a Icseti 3. The bifiildings are- constructed identically. They are three stones over parkin‘g, 1 . and approximately 40- ,000 square feet each ._1_.n- net rentable space._ Their. holdings mclu<1e ;
ope single family home; subdivision in the. process of selling out hereinafter refer-rah toI _ : Gateway EstatexlC Their portfolio also iconsists of a condomhnum project that; 131m
111 stages of 5 11. Ian hereinafter known as- Terraee Hills:.; TheSe holdings. arei all-.-
s parate limited partnerslnps width Ocsed Development; -Mr_ 33111111 and Mr. MgintIhsh s
c-general partn rs. The. honted partners- are outlier-one local hwestorsg' "i , .. _
During your - -mee_ting_,- Mrs. Blumseys thatghis; company is on 'the yerge of bankruptcy.
The Ocsed 1 and 2 office buildings have negative cash {tons oi. $10 000. to $20 GPO-per - ’
mouth each after debt: sew‘ice.- Ocsed 3 is 195% leased- and operates at a breakeven cash 1
flow after debt service: The Gateway- Estat'qs protest W111 not return Enough money to pay
oh" the investors, and the Terrace Hills project is also met able to return enough money :'
to‘ pay off the investors; :Ocsed Development Company functions as a preperty manager I‘
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1 ET the office buildings, but subcontracts out the sales for residential projects. While

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I manager. The remaining $4 000 per month' 15 paid to the principals for personal liinng _ capital call on the investors in the limited partnerships, Mr. 33111111 and Mr McIntosh paid capital, guaranteed the balance of the moneyI owed tIo the subcontractors personally. I These guarantees were evidenced by- a series of ten mdividuai' promissory notes, one for a ,- ' s, 1:, :9. u a
chedtieve Igpratent rebeives property managemenIt Ifees mogtlfly, nchEIrtheIeIIss,IIIBIIecalI1IIsIIIE pig II cost overruns, slow sales and slow Office lea-sing, the company has a negative net worth; ..-.-.-.-— 491. .v.. .~. u .54....- . $2, 000, 000. The property management fees received from the office building amount to‘i
approximately. $10 000 per month and; are the only source of revenue for the compahyifi
Those fees are consumed by office overhead. The company’ s overhead consists of $3, 000:
per month rent, $6, 000 per month 111 salaries for one secretary. and an assistant property; 9
expenses. 7 :I': _‘ | "I . :11
Mr. Blum and Mr McIntosh have been funding, our 65 their ovvn personal pockets, the
$10, 0000 to $20,000 negative cash flows as the Iotfice buildings for over a year and h ve
eidiausted their Lersonal credit lines and financial resources in the process They also“
individually haveI negative net xvorths of around $1, 500- 000 each, including their persotialifi
residences, which have zcr'o equity in them. In addition, they have personally guaranteed: 1
a! credit line, th beneficiary of which is Ocsecl Development Company, to the P ars ni
National Bank the amount 0 $165, 000. The credit Line is in default for nonpa e t. f
ItE IS now all due and payable, The Ibank is demanding an immediate payotf and flilc; E '
interest runs at hreeI overI prime, as published in the Wall I§treet Journal. In addition
triere are abou ten subcontractors who have performed various amounts of Illenajt
hitprovement 11'0ka 1n the ocsed 1 and 2 office buildings that are collectiver owed arou IdI $I].60, 000 in various amounts In order to do Ithe honorable thing, Mr.Biun1 and Mir. 1 _w-_ -__,,-_;_~.1-_...--' McIntosh signed! individual promissory notes xvith these various subcontractors when thei
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preperties were E110; abie to generate enough money to pay them. Rather than Imalceta what they could Iout ofI their personai funds and then, when ”they couldn’ t raise any more : each subcontractor The subcontractors are anxious for payment but are InotI puttinIg
'l' undue pressure on IOcseId Ior its principals at the present time

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'A ' 1.16 ! tr?" expired and WGOnglfa‘fllfly, whof'owned ist'f‘trieci tdi’sell it tofiomeonosfilse hutuiaoultiIn'f iI 1‘
and they are now back at the bargaining table asking Ocsed to once again put it uncieii !
contract and get the entitleuients; finance it and build- it out; The Go‘s-g family has ItIm‘lI
kriIiowledge of Ogised's problems and Iiri all likelihood will not find out. However, thereiIiinI
a :35,- 000 deposit required to secure the Option and $40, 000 of up-Ifront architectural cosltIs
atIid— pré-dBVEI'OPEIFGI-Iit expenses. The projeqt will also take two years to deeelop and bu Idi . ! i
oLIat, and the difIt'erence :betWeeu the cost and the sales price, net of commiSSionIs, lie approycirnately $1%,0(I)O, Dill}. . , . I . I ‘ ‘ I ' -. I, ‘ . l i ‘ = I ' ‘- ' " ' '
Althird project Hi progress is a 40-hon3e. subdivision' 1n the town of Mountwood. This deal
came by Way of the Twentieth National Bank of Mountwodd. The bank said Ithat thiey aie
piepared to melt a construction loan on this project to another developer But the Ibartl: |
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i isla little worrie- about the other developer 5 expertise and wanted Blum and Molnt‘osl
arid their affiliat d companies to be involved, particularly because Bloom and McIntosh
. aae experienced 'th this type of property development and are also experts in the City_
of Mounts/goal. ,The bank is encouragihg Bluru and McIntosh to form s'orue type of al {I
joint assogiation with this developer. It appears that if a deal could be worked out, BlurpaI
and McIntosh could come out with $30IU, 000 or so. They would not have to invest: I
anything, and they Would not have to take on any liability, just use their expertise to make su're the project is a success. The thnlng of these profits is probahly one year away. - Mt. Bluuj and Mr. McIntosh now aslr I'you whai you thmlt so far and you say that it is I
true that hanluuptcy 11:, an alter-nature But you say "Let Iroe explain to you scale of the I
realities oi- the real estate business inIItIliIe I1990’_s.__‘f(_ou guys are over 50 years old and toII
file Bankruptcy now Will mean that you will have to live- :Qn an all- eash basis and what .
are you going to tie Ithe next time you want to go to a restaurant and you don’t have IIIaI
Visa card? Bankruptcy; is okay if you can wIaIkI into a $306 [lilo per year job Than you i
eai1 live on a ca-sli basis, but ray dear hiends‘, there' 15 no way that you two guys are gOinIgI I
toiwalk into that itype of a job'. Yes. there are jobs at the entry level in the real estate . l 4- business today aad there are a few very seruor positions that come available from time 19 9
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J Lwliuid like all 0 you to prepare a position paper on this and have it on my desld 111 a- 4. week so that we [Tn give our prompt responSe to Ocsed. ‘ _ , . a i t if you believe that we can keep them‘ out of bankruptcy, then, my ffiends, _I‘fow do We get- our fees paid? Don’t forget, we must get our feles paid _are he future prospects for the. company. and/or its. principals after: it. is'. “OFF-=1” How do you envision the continuation and future operations of Mr: 1
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F though there is :‘cash in the Gateway escrow account, it is probably best to ’
trelld lightly here became this could explode into a niajor lawsuit for fi'alildl
that Blurir and McIntosh and Ocsed cbuld not possibly win and would clearly; i"
notllbe. protected in bankruptcy. The same,- of course, _holds true for the l '
misappropriate funds m: Ocsed 3 These unauthorized loans, if not attendlei 1 .
to, pill follow Blum and McIntosh for the rest of their lives. . l l I wduld like you to answer for me do we keep the businesses going? Should I 3
we keep all of the businesses going or should we discontinue some operations :
and leave others? If so, which ones and how fast?‘ How do we fund the continuedbusiness operations dining-- the workout period?- __-_4 ._.._ . ..._....._ regularly.
What _do we do about the creditors and which creditors must be attended
to first- and how do we settle with them. and for- how ranch and on: what
terms? Do we treat all: creditors the same. or do we prioritize?- -.Are there some creditors that we simply don‘t have to pay at all? _2 , E 1‘ ' If it likes a year to enter into the various arrangements with creditors, what l
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Blum and IVLI‘. Mellitosh at al. ? . i I
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, TheOcsed 1- :pffice building has a second deed of trust 111 favoraof Artesia Mortgage; which' 15;}.- 'I . w-ll—e'pmonally guaranteed. by Min-318m and Mia McIntoéh 1n the -aflrountt'af$80 08121:.~ T158 ptintfiipé‘ll‘ I5 -1
.. .. .. and interestpayments on this note amount to $8 {188 per month. IA-r-tesia is also a tenantnimthe; «:55 I_
office building and occupies around 5 000 square feet. Their lease has five years to run and the":I _|
I rent is around $9 000 per; month. Their loan' 13 _currently 1n'defau1tt They are reluctant 105: .I ‘— amt-m- 'I__fi"J-l‘— a}:— foreclose on the property bed‘ause there is no equity 1n the building. They are planning to Sue on ' * .r' ' the personal guarantees.
E- l . i Ocsed 2 has a thircll deed of trust' in the amount of $65: 080 with the Oak Knoll National Bank; - and 1s personally guaranteed by Mr. 8111111 and Mr McIntosh. The loan 18 in default. The bank I 1
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immandmg an i ediate payoff. The interest is three over prime, as published in the 1813;11 :
E; tleumal and. e lender is planning to pursue an action to enforce the personai guara tea 1. 13 use the lender owe thelre' rs not any equity left' in the building. 1
In OClokmg at the pi ture of Océed DeveloPment you note that of the three office buildings, nly
d 3 has a brea even cash flow. The other buildings, Ocsed 1 and 2 have negative lash é .1
floh's. Ocsed 1 1‘: ts approximately $45 000 per month after expenses but before taxes, debtli | . l
serEVice and capitalS items. There' Is a first deed of trust from. the Insurance company ‘of the 5 q . l _ 1 United States of America of around $1 700 000 'The loan' is at 8% interest amortized over 38 ’35 if
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years. The loan 18 nonrecourse and 13 in default.'The'1-e 15 a second deed of trust as pointedl out .1 -1
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earlier, 111 favor of Artesia Mortgage in the 31111111111163.1150 000 which 1_s personally guaranteed _I. y by the principals The Oesed 2 huilding has a first mortgage loan mth the Insurance Company :5 _- 1‘?
of hlorthem California In the amount of $1 100 000. The loan IS at 8% interest amortized over :- i . . 4 . - ‘ .
30 years. The loan is nonrecourse and 15 in default. There is als'o' a nonreeourse second deed of I
trust with the F5 savings Bank 111 the amount of $700 000 which 13 also' in default. .Tliis loan' 15 ' at 9% interest only and' 13 due 1n three yEars. There is also a third deed of trust on Ocsed 2 1n 5 . __..-u_ _. ._ _.._ .___ .. _.. the amount of $65,009 with the Oak Knoll National Bank which is fully guaranteed by Mr. Blum ! and Mr, McIntosh. This loan is in defaulflas pointed out earlier. 'Oésed 2 _,._... -
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neisIapproxima.te1y $60,000 per month after expenses but beiIore taxes, debt Isereice and capital .- w. 1913;“. .* “Tab “ J. :1 43%: . Ifiiv- : ill.
it3tn3. 012333 3 breaks even aite for debt service. The cash flows of blesed1m "l and besed I2 have ' been irregular because of heavy tenant turnover, tenant improvements and giveaways. In Spite .. of this, general consensus of the real estate frommunityI is that the stabilized value of ched 1; has a stabilized value equal to the encumbrance of the combined first and second deed trust !
1 |_‘ IThIere15 no equity in either building. Ocs'ed 3 has an quuit‘y value of $1 0110 000' in excess of the I :1 debt. but this equity, of- course} is for the benefit of the limited partners _ 1 Mr, Blum and Mr. - clntosh thither go on to say that the Terrace Hill project has a first and Iand equals the encumbrance of the first deed of trust and based 2 1n the eyes of most observers 1 l
I. 1 second deed of- tru theld by the Johnson Mortgage Company. These loans are nonrecourse. Third is a third dee of trust' in the amount of $100 DOE} held by the Candice Auction CIompIany. Th third deed of ust was created when Ocsed Development attempted to auction ofi the
co Idominium uni and when the auction failed monies owed to the auction company +ere
see red by -a third eed of trust. This third deed of trust' is personally guaranteed by Mr. BIlum an Mr. McIntosh nd cerries interest at 10% interest only. Because of slow closings, all titres 10a 8 are in default I , ' I I .
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:' 1 . . - Thf'Ie Terrace Hill condominium project 18 going to be closed out within the next 31} dajIIIs. Ocsed : Deirelopment Company has hmded $200 000 of Cash into the project over the last year and has never recorded Ia claim of lien The work was performed befoIreI the IthirIdI deed of trust from Ithe '-I
HF Candice Auction ICIinunIpany was recorded. The net profit Iafter the first and second deeds of trusit including all past due interest but before the third deed of trust' 13 Ipaid on the Terrace - Hills condominium project, is about $20 0110 per unit There are 12 remaining units to be closed.
in the project and these urdts are in escrow The relationship between Oceed and its principals I
with the holder of the first and second deeds of trust 13 excellent but it should be noted that the =- third deed of trust holder obtained its third deed of trust because there were fees due from a .‘ failed auction, 'andI Ocsed Development does not believe these fees were really earned. Plowman-1n order 1 . . A '
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“ ether amidiihtigatroiaflGcsed Developmeht, and the principfls; agteefl to a fulirrecoursesfhird |-'-
deed of trust 1 , L 1 E --Y.lour guests tell you 1111115 point that they'haVe been to four. lawyers and all four lawyers
tell them that their negative net Worths and" the negative net worth of their company
niakes them a- prime candidate for banlduptcy. The fact that the projects mentioned
.herein will never get better, and because all of the obligations set so far- in this case,- aE
Chapter 7 should be filed and all debts, corporateiy and personally should be wiped out. !
1141'. Btum points out that' on the Desert 3 oEECe building that he and Mr. MointOsh, es.- E
g’eneral partners, took a loan from the partnership to fund some how partnership items 2111111 *1
dE’d not disclose that matter to the limited partners. 'I’hey~ also made a similar type 1011111'1
1111 the GatewayETei-‘race project and never made the disclosure to the limited partne.
The loan that ithEey took on Ocsed 3 was for $160, 00.0 and the loan 1311 Gateway 'Ferracel
was $80 0910. M1 Blurn and Mr. Mchitosh no longer have the rooney to pay eithhr o e
of these lparls, Earild at this point they have not made any disclosures to the. hmiteEd
partners. They are very concerned that 11,1111 when, the limited partners find out: laboEit E E
these loans, antlE that the proceeds were used_ for non-partnership purposes, that the 11 haEdid‘uptcy. 111E addition, you are told by Mr Bluni‘ that they formed another limited partnership to E I E11116 several lanrl development projects. This partnership was called 01:51:11 Mortgage E
E11113estors. The principals of 905361,.“ course were the _ger1eral partners and Ocsegi;
Development was a- co-gciieral partner. The limited partners ihvested $250, 000. The'EE
money was to his new for pro-development echflnses and were. to be paid back with '1:
‘ . interest and a portion of the profits if the projects that they were associated with got 511E '
the ground Un1ortunately, the projects never happened and all money was lost The ;‘
principals, Mr. Bium and Mr. McIntosh} a'r-e' convinced that they tion’t have a loge] 1
o‘oh’gation here, l1ut rather; 111115115111 that they have 'nioral one to the investors. MorEe E E
"importantly, howEwer, the investors believe that they have been taken advantage of and

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1_ J f-‘a’rIe not italdng theii‘ losses alike happen: campersi The maestors are hopping’mad andt’they ,
have retained a very powerful financial consultant 'to represent their interest. The finaneial _......., consultaht strongly inaplies that there is going to be a law'suit for fraud. ' - '5 1
:- ' 5 Oh the positive side OE things; IOcsed Development has several projects in the developme’ns'I‘
stage. One is a'lI 504hortie entry-level subdivision in the town of Moseville. The land; isl owned by a partherslup of which Ocsed 1s "a general partner and, for once, Mr. Blurn endI
Mr. McIntosh arIe not individually general partners. The land is valued at $1, 000 ,000. i There is a nonfeEourse first deed of trust held by the Patrick Mortgage Companyiin that
amount of $300, 00 and a nonrecourse second deed of trust seller carryhack Iin the attlottnt of $200, 300 held by a Swedish Pension Fund. Both the first and second deieds f tIr1'1st are in defsiiultI and the second deed of trust is threatening foreclosure On the pr'opei-ty there is an existing retail stere which will eventuallyI be torn down, but which at _a.. the ruornent h 'I s in rental on a ti-ipl'e net basis of $12,000 per year. 7 I- The good news i that there seems to he equity in this project and the limited paIrtnehs I
kniow it. The (J estion is, how do you capitalize on it. The project will require abotIzt $4 ,000 of pure—development expenses to be spent prior to construction. An interesting meg is, however that roost of the architects and engineers who have been doh1g business -j iI with Ocsed for over 20- hcsrs arIe veryI often willing Ito worth tin the some; end get paid' II" i the difiference between the cost and the sales price after sales commissioes, is 'abIoi1It‘ 1 $1,000,000.1t will talte hvo hears from now to get eity approvals and earn a profit '
Putting this project into a Chapter 11 hardqnptcy reorganizstion is being considered, but ' when, and 11,21- construction loan is handed on the project. If this project ever gets built, the Icost of the bankruptcy is JEZIS, 000, and Ocsed and its principals dont have this kind of fuoney on hand.
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A second psoject :irI1_t_he development stage is a project for another 50 heroes in the tctwn of iGIruiitville. This project else has a land value of $1, 000, 000 but at the present time, Ocsed Developmhnt is out of contract. Ocsed had it under contract, bet the optioh l ‘ _ , | .
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state ndt-‘ttald’ng theii‘ losses 2111;: happyiitcanapersi"'1be 'in’ttestors are hoppingt'mad' andflh'ey
have Iretained a very powerful financial'consultarit to represent their interest. The .finaneial
conSultant strongly iniplics that there is 361113 to bee Jarvisuit for fraud. ' - gI
OIn the positive side of things; Iched Development has several project; 111 the development
stage. One is a'I SUI-borne entry-level sbbdivision in the town of Moreviile. The '13ndiis
owned by a partnership of which Ocsed' is a general partner and, for once, Mr. Bium 3iI}dI
Mr. McIntosh aile not individually general partners. _The land' _1s valued at $1, 000 ,000. There is a nonre ourse first deed of trust held by the Patrick Mortgage Companydn tide 1 amount of $300, 00, and a nonrecourse second deed of trust seller canyback I111 the 3111011111 of $200, 1400 held by a Swedish Pension Fund. Both the first and second deIeds f trdst are- in deftiiult and the second deed of trust is threatening foreclosure. On the property there is an aidsting retail store which will eventually be torn down, but wifilch at 0--.?— the moment ‘11 'I s in rental on a triple net basis of $12,000 per year. ~I I- The good news i that there seems to be equity in this project and the limited partnees
toiletsr it. The q estion is, how do you capitalize on it. The project will require about
$4 ,000 of pre—developruent expenses to be Spent prior to construction. An interesting
t Ing is, however, that 11105; of the architects and engineers who have been doing business
with Ocsed ror ever 20- years are 11qu often williiig Ito worls. 3111111: Iconie and get paid
when, and ii, a construction loan is funded on the protest. If this projetzt ever gets built,
the diEEerence between _tIhIe cest and the Isales price, after sales; commissions, is about
$1,000,000.11 will take two years {10111 now to get city approvals and earn a profit
Putting this project into a Chapter 11 bankruptcy reorganization is being considered, but
the Icost of the banln-uptcyI is .‘lIiIZIS, 000, and Ocsed and its principals don't have this kind
of money on hand. '
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A second project 1111 the development stage is a project for another 50 homes in the tIOIWJii
of iGuiltville. This projectI else has a land value of $1, 000, 000 but at the present time, Ocsed Development is,out of contract. Ocsed had it under eontract, but the option a .
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tIimqu However, these are only for those persons with eXteInsiVe national experience and are very visiblelto the national investfiaent community. 1m afraid you guys are probablIv not going. Ito qualify and my advice to you is to try to work this out and forget-
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‘Ll’ou 'ask your guests if you might have _a few days in order Ito discuss this matter wiIth youtII
aIFsociates Honever, before Mr. Elam and Mr. McIntosh leave, you ask them what absolute minimum annual income they need in order to pay their personal living carpenstem
IIhBY- IEPIY that they 116M about $70,000 per anhum each. I I
I You 330‘” game”; your. 5133' mgather and retriew with them the above—mentioned facts ahdjl
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5th them to a-ssItss whether or not your firm should take on this case and, if so, to develog‘I I5 a workout plan.- You give 'your staE the following marching orders:
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II 1. You remind them that your fees are $250 per hour per person for anyoheI
. in your office-working on this matter and "that the viorkout plan could cost
I I I '. Oésed between $20, 000 and $40,000. We cannot take this on unless there.
I I is a way to get paid. You remind vour staff that on the face of things, therei ,' are. 'InIot any cIashI resources to cover your biiIl. 'II'he first thing that they need .
I - _I to do _hefoI're recommending that we go forward with this' 15 to- find some cash I -. resources that Will. not be IsuhjectI to. seizure by creditors. ' ,_ . -. . _ . “I ' “ - , .‘ -‘; I: ' ‘ . ‘. "-.'. . ' ". ‘ ,2: _IIf the. vtoritout pian is‘ going to be successfuI,Mr.B1um and Mr. McIntosh i
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- must not receive, under any circumstances, any recorded judgments against I _ ' _theI'm personally that wjli Show up, Ion their credit reports. It is going to be I _neI’cIessary for them to obtain financing in the future and their individual I
credit reports must be triple A. Fortunately, at— the moment, their creditII
Iratings are all triple A. To date, Mr. Elam and Mr McIntosh have maCIIB.. __.-_—'~.. _ certain that they individuafly are current On all their obligations, even though i
t thellr company, Ocsed Development, Is not. . I ' I
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3 I3I. . Untier no_cirIc:un1stances Ishonld. litigation or the Ithreat of litigation be
. 'I .I'alloL/eti' ‘No claim can go-I 1e litigation. 01251111, McIntosh and Blues simply i ‘canhot afidrdlawyers orle'galfees. -‘ :_ '_ _ ‘ 1* ' I
'i :"v" -:'= ’ FIII I ;' ‘ 24' . .‘A‘ Viable 'bustness plan ninst be conceited and entered into that will- alloiva
‘ 111'er principals: to have a productive business career in the future. iffthis is i ._ . notiijkely,‘_ then it does not r'naice any sense to fly to stay out of bahlu'IUptcy.
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With those four stipulations, you leave the‘ room and leave your 'stafi to mail the futulle ’- of JOcsed Development; 3. 1 '.I ._I' “I ‘ II.I [11? Ia closed-doorlISession of the staff- your senior staff member issnes the following
Lush-actions: ladies and Gentlenaen: "We are all new assert: of the facts of the Obsed
Dtiyelopment cash, and we have been briefed by our senior partner as to the font
parameters that we must worlr within. ILet- -I_111e' now lay out for: you some more ”specific ineslions that InIeed to be answered. 1 .
'Q |' . ...,.' . .. I l.- | , lI. . ShouldIOcled, Elan: anti McIntosh he saved'?’ S‘houltithey' try to avoid
" J H 'Ibanlrruptcy? Should all three try to avoid bankruptcy Or. just tam or just
one? Ora perhaps the Isitnation is too far Igone anciI.I111IoI1I'1ey shoulti not be
Awasted on this and, perhaps, the lawyers are tight, and they shonld inst ale
‘ ‘a ghapter” 7' anti inake it all go away._ However, if the answer is yes,I that:
"they should be seated then we Irhust IrIeb'Jintl ourselves that as we spastic, there is nbt any cash in the bank or in any bank account of Bluml- McIntoish oIr Iched, or aInyI of its IpattrIteIrships ‘II'herIe are small cash balances, of conrse:
5.} ‘..' . - . ‘1:
_Ia. . in the escrow accounts of the title. cornpanIly for Gateway and the TeI'rraCE: _ I Hillsi project but this money cannot be touched pending a resolution of thei'
I II I - thirci deed of trust in Terrace Hills and the misappropriation of partnership moniey in Gateway. "There are going to be SOIIlE: vetI-y tiiSpleased [ignited
i
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