silver saddle ranch lawsuit

A copy of the listing brochure is posted in the documents section. The business operations in Burbank have been terminated. Case Summary On 01/25/2022 PHUNG NGUYEN filed a Property - Other Property Fraud lawsuit against SILVER SADDLE RANCH CLUB, INC. If you have a tip or story to share about California City or Silver Saddle (or anything else), email me: eguerin@scpr.org. We only received 43 challenges and examined each of these challenges carefully. However, the sales pavilion, parking, and other related improvements are located on a 24-acre parcel is owned by the City of California City and leased to Silver Saddle Resort and Club which expires April 17, 2027. Defendants comingled and diverted funds that had been promised to be set aside and preserved for the investors benefit, making it difficult to trace exactly how investor money was being spent. The Court approved the sale on November 6, 2020, and the sale closed on January 14, 2021. Silver Saddle Resort was part of an investigation and lawsuit filed by the California Department of Business Oversight in 2019 that looked into fraudulent land sale activities in California City. Instead, on August 5, 2020, the Receiver filed an ex parte application for an order cancelling escrows for Silver Saddle Ranch and the Galileo parcels, which will be heard telephonically via CourtCall on August 11, 2020 at 8:30 a.m. All responses and oppositions to the Receivers ex parte application must be filed with the Court prior to the hearing. As we have previously noted, the Galileo Project investors do NOT hold an interest in the Ranch property. Each investor who submitted a challenge has been contacted by mail and email explaining the Receivers review and determination of their challenge. In 1977, the company settled, and was ordered to pay what was, at the time, the largest consumer refund in the history of the FTC. Claim Determination letters have gone out today to Silver Saddle investors who invested in the Galileo Project (sometimes called LandBanking Plus). If you think the Receivers claim determination is wrong, you have until April 8, 2022 to send the Receivers office a letter or email challenging the calculations. The sale of the Ranch was approved in late 2020. We will seek the Courts approval of the sale at a telephonic hearing on November 6 at 9:00 a.m. via CourtCall and, if granted, the closing should occur 60 days thereafter. Lets assume Investor A invests $200, Investor B invests $500, and Investor C invests $300 for a total of $1,000 invested. IT'S UNLIKELY THAT PEOPLE WHO INVESTED IN SILVER SADDLE WILL GET THEIR MONEY BACK. In March 2022, we sent out 2,970 letters to investors notifying them of the Receivers Preliminary Claim Determinations. Prosecutors charged Thomas Maney, the 83 year-old owner of Silver Saddle, Marian Ducreux, 68, one of the companys top sales people, and seven other former sales agents, managers and employees of the ranch in late May. At all relevant times, efendant d the Galileo Association was a California non-profit corporation with a business address of 7635 North San Fernando Road, Suite A, Burbank, California The sales process continued and Mamann offered an initial offer of $1.8 million for the ranch and $600,000 for the Project land. Despite this significant outreach, l did not receive any offers from Mr. Jones, nor have I received any further communications from him, Knight stated in her declaration. However, before this can occur, the current escrows must be canceled. (Chava Sanchez/KPCC). On September 9, 2019, the California Commissioner of Business Oversight (DBO) filed an action against multiple parties involved in a real estate investment scheme which allegedly sold highly overpriced fractionalized interests in vacant desert land in rural Kern County, California. If the DFPI is successful at trial or the parties reach a settlement, then the Receiver will seek permission . The receivers motion later stated in footnotes that a joint offer with investors would have required rescinding an offering made by Maney and approval by the state, which would further complicate the sale. On May 13, 2021, the Receiver asked the Court for permission to proceed with the sale of the land to the solar energy company. Ultimately, more than 73,000 people bought land, netting Mendelsohn's company hundreds of millions of dollars. Notice of this filing will be provided to investors by email and via posting on the receivership website. The reason the Receiver took the motion to approve the sale off calendar is that shortly after the Receiver accepted an offer to purchase the Ranch, another individual, who had also presented an offer, complained about the sales process and his interaction with the real estate broker. But even if the sale goes through, it won't generate nearly enough money to make all the investors whole. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. This will ensure the sales process is healthy and will maximize the sales price, which is in the best interest of the Receivership Estate. After hearing argument, the Court granted the Receivers Motion and approved the sale of the Ranch. The Receiver will proceed with hiring a realtor and proceeding with listing and marketing the properties. The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors. California City is filled with signs advertising vacant land for sale. There would be a golf course, a university, a mall, a massive park and an airport. Background on the Process to Reach a Final Determination of Investor Claims. The Court also determined that the Receiver had shown the current offer was fair and reasonable. Thats when the California Department of Financial Protection and Innovation raided Silver Saddles headquarters, halted all sales operations and took control of its bank accounts. Mr. Maney and a number of others are facing criminal charges in connection with Silver Saddle. We have received emails and letters from a small number of investors (who appear to be coordinating with Antonio Garcia and Carlos Novelo, and their United Owner Investors, Inc.) objecting to the sale of the Ranch. As you may be aware, the Court approved the sale of the Silver Saddle Ranch and Club (Ranch) for $2,100,000. You have permission to edit this article. (Chava Sanchez/KPCC). The Galileo Project property is listed for $919,746. Each investor would receive a part of the proceeds from the sale proportionate to the money he or she paid for the property. The California Department of Business Oversight ("DBO") filed its civil lawsuit on September 9, 2019 against Defendants. One offer fell too low beneath the listing price. On 06/06/2019 MICHAEL BALAGTAS, filed a Contract - Other Contract lawsuit against SILVER SADDLE COMMERCIAL DEVELOPMENT, LP ,. On March 4, 2022, the Receiver filed a Motion to Approve the Sale of the Galileo Project Land. The Receiver will file a motion for the Galileo Project land after the sale of the Ranch is complete. If no objections are filed with the Court, the Receiver will promptly file a proposed Order approving the Receivers claim determinations. The sale is set to close in 60 days. For additional details on the sale of the Ranch, please see below. March 7, 2022 Notice to Silver Saddle Investors of Claim Determinations. We continue to receive inquiries and entertain offers for the properties. SILVER SADDLE TARGETED A VERY SPECIFIC TYPE OF CUSTOMER: LATINO, FILIPINO AND CHINESE PEOPLE, MOST OF WHOM LIVED IN CALIFORNIA AND OFTEN SPOKE ENGLISH AS A SECOND LANGUAGE. The buyers were nearly all Filipino, Chinese or Latino, and many spoke English. It is currently listed for $1,895,000. Every two years, Desert X presents site-specific outdoor installations throughout the Coachella Valley. Today, most of the roads are abandoned. High near 70F. The escrows for the Ranch and Galileo Project property have been cancelled. DON'T MISS ANY L.A. CORONAVIRUS NEWS An onslaught of velella velella washed up on shore this weekend on Southern California beaches. The sale closed but in August 2021, the owners of High Plains Mesa Holdings appealed the sale and filed a bankruptcy petition on the companys behalf without the Receivers permission. For additional details on the sale of the Ranch, please see below. My 8-episode investigative podcast, California City, seeks to answer that question, as well as a bunch of others that came up over the course of my reporting. Motion to Approve Distribution Method and Procedures filed Telephonic Hearing on March 19, 2021 at 9:00 a.m. Before the Receiver can distribute funds to investors, the Court must approve a distribution process. The bankruptcy petitions and appeal were ultimately dismissed, allowing the Receiver to take control over the roughly $4,100,000 in sale proceeds. A simple example can help explain how this works. Silver Saddle lured prospective buyers from around California with the promise of a free weekend at the ranch. The Courts decision means that when the sale closes, the Silver Saddle investors will no longer have an interest in the Galileo Project Land. The ranch and the property were initially marketed in May under real estate company Kidder Matthews, with Teresia Knight and Greg Myers as the listing agents. The criminal case continues and, as a result, the Court has extended the stay in the receivership case until at least the next status conference which it scheduled for September 15, 2023. After the Court does so, the Receiver will submit a proposed Order to the Court consistent with the ruling. To that end, on February 8, 2021, the Receiver filed a Motion to Approve Distribution Method and Procedures (Motion). IN 2011, SILVER SADDLE TRANSITIONED FROM SELLING VACANT DESERT LOTS TO SELLING SHARES OF A CONFUSING REAL ESTATE INVESTMENT CALLED 'LANDBANKING'. Many of those consumers ended up spending tens of thousands of dollars on land they were made to believe would be worth much more in the near future. The motion cites water costs alone ran more than $285,000 since it was placed in the receivers hands in October 2019. Most of the money, the DBO learned, was gone. In Silver Saddle's case, approximately 1,000 acres of empty desert on the outskirts of California City, divided into 4,000 shares. A copy of the Receivers First Interim Status Report is posted in the Documents section of this webpage. Help us provide credible local journalism and timely NPR reporting to our entire community. July 17, 2020 Results of Hearing on Receivers Ex Parte Application. Silver Saddle Receivership FAQs Updated as of 10/10 . THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT CHARGED SILVER SADDLE WITH FRAUD AND SHUT THE COMPANY DOWN IN 2019. You can either mail the information to: Silver Saddle Receiver c/o Regulatory Resolutions 655 W. Broadway, Suite 900 San Diego, CA 92101. This case was filed in Orange County Superior Courts, Orange County Civil Complex Center located in Orange, California. And lets assume the receivership has $100 to distribute to the investors. Although the sale closed as scheduled, High Plains Mesa Holdings filed a Notice of Appeal of the Courts Order authorizing the sale. Any response must be filed before the hearing. Case Information Case Number: 30-2022-01242337-CU-FR-CXC Case Status: Not Classified By Court We will provide an update after the August 27 hearing. On 04/16/2019 JOSE CARRILLO filed a Labor - Wrongful Termination lawsuit against SILVER SADDLE RANCH CLUB, INC. Receivers Notice of Final Claim Determinations and Proposed Distribution. The Ranch is listed for $1,874,500. The Top 5 newsletter catches you up with LAs top 5 stories in just 3 minutes. However, because the Silver Saddle Ranch & Club and the Galileo Project land are worth far less than the investors . When Kidder Matthews began marketing the Silver Saddle property, the company developed a sales brochure and highlighted the resorts features, including a host of amenities. Like many urban planners at the time, Mendelsohn thought major cities like Los Angeles were overcrowded, polluted and dangerous. After 14 days, the Receiver will respond to any investor objections filed with the Court, so that the Court can evaluate the Receivers calculations. The contract had no cancellation period, and buyers were required to pay $41 a month in membership fees to Silver Saddle -- indefinitely. Investors Reviews of Claim Determinations. At that time, the Receiver will also file a Notice of Final Determination of Claims with the Court. lawsuit on September 9, 2019 against Defendants. April 18, 2022 Court Grants Motion to Approve Sale of Galileo Project Land. As Mendelsohn saw it, city folks could come and buy an empty lot -- for cheap. Receivers Review of Challenges and Final Determination. In its motion, the receiver stressed the desire to unload the storied property as it represented its largest and most costly asset. In July, Mr. Maney asked the Court to stay this case, which would put the case on hold, until the criminal case is finished. As a result, the properties continue to be marketed and listed through our real estate broker. People needed a place to go, to start over. We are preparing a proposed order for the Court and will post it on the Receivers website when the judge approves. In the 1970s, a man named Tom Maney began working for Great Western Cities. Importantly, the Receiver intends to request the Court authorize that the Galileo Project vacant land be conveyed with a clear title and free of the Galileo Project investors fractional interests. Nevertheless, the Receiver intends to recommend to the Court that the funds from the sale of the Ranch be used to make an initial distribution to Galileo Project investors. The Attorney Generals office didnt immediately respond to a request for comment. Thousands of people bought this dream. 2023 Southern California Public Radio - All Rights Reserved, As Fentanyl Deaths Climb, Bill Would Require Drug Education In Schools, Lawmakers Want More Social Media Regulation. According to the receiver, Feterik eventually withdrew his objection and the receiver re-opened the sales process for both Silver Saddle and the Project properties. The Receiver will file a motion for the Galileo Project land after the sale of the Ranch is complete. As we have stated on this webpage, and in our emails to investors, any distributions to investors will only take place after the conclusion of the case. If you are an investor and you agree that the claim determination prepared by the Receiver is correct, you do not need to do anything. Mismanagement, Sloppy Hiring Practices, Lack Of Transparency. Please continue to check the Receivers website for periodic updates. In July, the receiver eventually accepted an offer from Kevin Feterik, who had partnered with local businessman Leland Krelle, for $1.77 million. The blue jellyfish-like creatures were swept by the winds of California's recent storms. After completing this process, the Receiver will select the best offer and submit it to the Court for consideration. Each investor will get a pro rata share of the distribution: Investor A will receive $20 (20% of the distribution), Investor B will receive $50 (50% of the distribution) and Investor C will receive $30 (30% of the distribution). To support our non-profit public service journalism: Donate Now. In a Judicial Council form complaint filed May 25, 2012, Craig alleged he was injured on October 10 or 11, 2010 while a customer at a restaurant in Universal City owned by Saddle Ranch, a limited liability company, when the chair in which he was sitting collapsed. re Receiver's Motion to Approve Sale of Galileo Project Land (Mar. For example, assume that Investor As claim is $30,000, Investor Bs claim is $50,000, and aggregate investor claims of $1,000,000. Temporary Restraining Order and Appointment of a Receiver Issued by San Diego County Superior Court. And the total claim will be used to determine the investors pro rata share of any distribution(s) ordered by the Court. To be clear, the Galileo Project investors do NOT hold an interest in the Ranch property; the Ranch is owned by Receivership Defendant Silver Saddle Ranch & Club, Inc. Between 2011 and 2019, Silver Saddle made more than $56 million. There will not be a hearing on August 27, 2020 to cancel the escrows. Editor A judge appointed a receiver to take control of the company's assets and property while the case proceeds. For decades, real estate developers have sold a dream here: if you buy land now, youll be rich one day. Trial is presently scheduled for May of this year. LAist is part of Southern California Public Radio, a member-supported public media network. 3. But much of the land they bought is nearly worthless. By 1970, Mendelsohn had 3,000 salesmen and 24 sales offices around the world. According to court documents, Jones claimed his offer was not given a full and fair evaluation., A previous motion stated that Mr. In order to move promptly when the case is resolved, we are providing notice to all investors of the Receivers claim determinations. The criminal complaint is available in the documents section of this webpage. Finally, last year, the parties filed a Joint Stipulation to Continue the trial and related dates and deadlines to allow them to address discovery and potential settlement issues, which the Court granted on October 22, 2021. Silver Saddle Resort was part of an investigation and lawsuit filed by the California Department of Business Oversight in 2019 that looked into fraudulent land sale activities in California City. Upon receipt of an acceptable offer(s), the Receiver will then bring the issue before the Court, August 27, 2020 Ranch and Galileo Project Property Update. Investor payments will be made by check. October 16, 2019 Preliminary Injunction, Asset Freeze, and Confirmation of Receiver Order Issued by San Diego Superior Court. They watched a presentation about the area's potential. A photo of Nat Mendelsohn, the founder of California City, on the cover of the 1961 annual report to property owners. The receiver is currently trying to sell the ranch and all the land around it to help pay back people who bought into the landbanking operation. Last year, the Receiver sought the Courts permission to approve the sale of land owned by Receivership Defendant High Plains Mesa Holdings, LP, for $4,100,000. 2. Now, the California Department of Business Oversight has accused the company of Sales agents allegedly used high-pressure tactics that made it very difficult for potential customers to say no. The receiver requested the court to cancel the escrows and refund Feteriks deposit. On April 15, 2022, the Court held a hearing on the Receivers Motion to Approve the Sale of the Galileo Project Land. With a neighborhood design that enhances privacy by separating homes from one another to create open spaces, mature hardwood trees, ponds, and a convenient location only 3 miles south of Interstate 20, this community is going to sell out quickly! They sued Mendelsohn's company, which was then known as Great Western Cities. However, the receiver soon received complaints from Maney and from local businessman Rick Jones. If the Motion is granted, the Receiver will be able to start the distribution process. All the parties will be provided certain due diligence materials (e.g., preliminary title report, seller disclosures, etc.) Because the Silver Saddle Ranch & Club and the Galileo Project land are worth far less than the investors paid into the Galileo Project, no investor will be returned all of the money he or she invested. The state filed an injunction and lawsuit against several people accused of $30 million in fraud and illegal land sales, including Maney and Silver Saddle Ranch & Club, Inc., among several others. Community funding keeps us independent and accountable. On March 16, 2023, the Superior Court in the receivership case held a status conference to discuss the status of the criminal proceeding. The Receiver also filed a Response to the Motion to Intervene filed by Antonio Garcia and Carlos Novelo. Who knows when we'll see such vibrance again in this recently drought-choked land? The Receivers goal is to maximize the amount of money that each of the Silver Saddle investors will receive from the Receivership Estate should the Court approve a distribution. In 1984, the company declared bankruptcy. The lowest water bill was $4,339 for mid-March 2020 to mid-April 2020. What You Should Know About This Year's 'Constant Bloom', You Need Child Care For Your Baby. 4, 2022), Gordon Decl. What questions do you have about Southern California? If and when the Court enters an Order allowing a distribution to investors, the Receiver will issue investor checks promptly and consistent with the claims determinations. But in an interview, Maney told me he and Silver Saddle have nothing in common with Nat Mendelsohn or Great Western Cities. When the court-appointed receiver took over last September, Silver Saddle's finances were a mess. the assets of the Receivership Estate while the lawsuit proceeds. The individual expressed a concern that he did not have a full and fair opportunity to pursue an offer which he provided to the broker. As explained below, if you disagree with the Receivers determination you must contact the Receivers office by mail or email on or before April 8, 2022. In the 1950s and 60s, the city evicted the mostly Black and Latino working-class residents of Section 14 and destroyed their homes. On September 29, 2020, California City approved the Ranch for a lower water rate, which should result in lower water bills. July 10, 2020 Offer to Purchase Silver Saddle Ranch and Club. The Receiver intends to seek Court permission to proceed with the sale. The Court ordered that the Receiver cannot distribute any money to investors until the conclusion of the case. The Case Remains Cold, Even 'Affordable Housing' In LA Isn't Affordable. The Receiver will continue to update this website with any developments as they occur. The receiver moved to expedite the sale. Winds SW at 20 to 30 mph. At that time, you must provide copies (please do NOT send original documents) of all the information and documents supporting your challenge, for example bank statements and the front and back of cancelled checks. Maney continued selling vacant desert land, using the resort as an attraction to draw potential buyers. The owners of the 30,000-acre Silver Saddle Ranch & Club, about a dozen miles north of the downtown here in a remote corner of this remote city, are touting the open spaces of the high desert as a . Maney helped negotiate the settlement with the FTC, and after Great Western Cities declared bankruptcy in 1984, he acquired some of the assets, including a lot of vacant California City land and a small resort called Silver Saddle Ranch. 3. 9, 2021), Receiver's Motion for Proposed Distribution to Investors (Feb. 8, 2021), Receiver's 3rd Interim Status Report (Jan. 14, 2021), Minute Order Granting Receivers Motion to Approve Sale of Ranch (Nov. 6, 2020), Receiver's 2nd Motion to Approve Sale of Ranch (Oct. 13, 2020), Receiver's 2nd Interim Status Report (Sept. 15, 2020), Silver Saddle Resort Sales Brochure (August 24, 2020), Galileo Parcels Sales Brochure (August 24, 2020), Receiver's Ex Parte Appl'n for Order Cancelling Escrows (Aug. 5, 2020), Preliminary Injunction re Accelerated Assets; SS Purchco; and Pahrump Valley Real Estate Co. (July 24, 2020), Minute Order re Motion to Intervene and for Preliminary Injunction (July 24, 2020), Moody Decl. 5. It wasnt. March 23, 2021 Motion to Approve Distribution Method and Procedures. CALIFORNIA CITY WAS FOUNDED BY A CZECHOSLOVAKIAN IMMIGRANT WITH A VISION TO BUILD A CITY FROM SCRATCH IN THE DESERT. As such, the Receiver accepted the offer and will soon seek Court authority to sell the Galileo Project land. Around the same time, a young Ralph Nader asked his gang of consumer protection attorneys, the "Nader's Raiders," to investigate land sales and development throughout California. Many were young couples and hard-working immigrants looking to build a better future. The Silver Saddle Ranch was acquired for its combination of recreation potential, unique natural resources and its strategic location as a natural bridge connecting the Pine Nut Mountains and the Prison Hill Recreation Area. In the 1950s and 60s, the city evicted the mostly Black and Latino working-class residents of Section 14 and destroyed their homes. THE CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT CHARGED SILVER SADDLE WITH FRAUD AND SHUT THE COMPANY DOWN IN 2019 In September 2019, the California Department of Business Oversight filed a. On September 28, the Receiver agreed to a sales price of $2,100,000 for the Ranch. A copy of the Preliminary Injunction is posted in the Documents section of this webpage. Prior to the Sept. 14 deadline of 10 a.m., the receiver contacted Jones attorney for clarification of whether the offer was contingent on acceptance of the joint venture proposal, but no response came and the deadline elapsed.

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