Belzbergs acquire American Capital assets.Sale reveals controversial duo behind acquisition The sale of the real estate assets of former American Capital Investments Inc. has closed, and the buyers have been revealed to be former corporate takeover kings William and Hyman Belzberg of Beverly Hills Beverly Hills, city (1990 pop. 31,971), Los Angeles co., S Calif., completely surrounded by the city of Los Angeles; inc. 1914. The largely residential city is home to many motion-picture and television personalities. and Vancouver, Canada. Two partnerships headed by the Belzbergs - BelCal Properties and BelAlta Holdings - have taken title to ACI's eight buildings, although the Belzbergs have apparently decided to allow at least one building to be taken back by its lender. ACI ACI American Concrete Institute ACI Arch Coal Inc ACI Airports Council International (formerly Airport Associations Coordinating Council) ACI Automobile Club d'Italia ACI American Competitiveness Initiative , formerly of Marina del Rey Del Rey may refer to:
Attorneys for people who invested in ACI "partnerships" continue to insist that there is money missing from the estate and that the properties are worth more than the $24 million purchase price agreed to by receiver Dick Shaffer. The investors' lawyers have filed motions and appeals seeking to overturn the sale and to fire Shaffer. "The Belzbergs took advantage of a stupid receiver. He sold the property too cheap," alleged attorney Patrick Evans of Dressler & Rein in Century City. The investors believe the Belzbergs plan to "flip" the properties for a quick profit. The millionaire Belzberg brothers rose to prominence in the 1980s. Their "empire" was reportedly once so feared as a corporate raider corporate raider See raider. that two states passed anti-takeover laws just to thwart them. William, Hyman and Samuel Belzberg used to own 80 percent of First City Financial Corp., a Vancouver firm that once had assets of $6 billion. And William Belzberg ran FarWest Financial Corp., a Newport Beach savings and loan savings and loan n. a banking and lending institution, chartered either by a state or the Federal government. Savings and loans only make loans secured by real property from deposits, upon which they pay interest slightly higher than that paid by most banks. that failed in 1990. Done in by 'junk' The Belzbergs apparently were brought down by the collapse of the junk bond junk bond, a bond that involves greater than usual risk as an investment and pays a relatively high rate of interest, typically issued by a company lacking an established earnings history or having a questionable credit history. market and the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. real estate recession. In December 1993, FarWest's Beverly Hills-based holding company, Westminster Capital Inc., announced it had negotiated to receive a $26 million settlement from deposed junk bond king Michael Milken Michael Milken As an executive at Drexel Burnham Lambert Inc. during the 1980s, Milken used high-yield junk bonds for financing and corporate takeovers. While his personal wealth was enormous, he spent two years in prison after pleading guilty to charges of securities fraud. and defunct investment banking firm Drexel Burnham Lambert Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was driven into bankruptcy in the 1980s by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. Inc. FarWest and other failed S&Ls had alleged they were bilked through illegal manipulation of the junk bond market and risky junk bond trading. FarWest bought more than $500 million of Milken's junk bonds. When the ACI sale arrangement was first announced about a year ago, the buyer was said to be JH (Jack Herz) Financial Group of Encino and an unnamed financial partner. Herz acknowledged last week that it is the Belzbergs who are actually buying the properties, but he declined to state the specific nature of his involvement in the transaction. "I found the deal. We have our own arrangement," said Herz. "I have an involvement in the transaction which is of a confidential nature. Obviously, I did this for financial compensation." Brace Greene, a Beverly Hills attorney representing the Belzbergs and Herz, said Herz is a "principal" in the Belzberg partnerships acquiring the property. "He doesn't own a piece of the corporation. He has a piece of the deal," said Greene. "Is there some horrible motive in wanting to make a profit on a deal?" Done deal Last week, U.S. District Court Judge Consuelo Marshall held a hearing on a motion by the investors to dismiss Shaffer. Greene noted that even if Shaffer is removed, it wouldn't affect the sale. "It's closed," he said. Shaffer's attorney, Charles Slyngstad, said there is little left for Shaffer to do in this case anyway - except to process the claims from creditors and distribute the proceeds from the sale. Although earlier there would have been more than $2 million to divide among the 200-plus investors (who collectively invested an estimated $16 million), Shaffer said that figure has dwindled to less than $1.5 million because of the expense of fighting all the legal challenges filed by the investors. "There is much less than there would have been five to seven months ago," Shaffer said. "If the investors continue to sue, we will only have money to pay the secured creditors." The SEC closed down ACI in 1993, alleging that it amounted to a "Ponzi-like" scheme, in which investors and expenses were paid using new investor funds. Many ACI investors were solicited based on their purchase of a book called "One Up on Tromp tromp v. tromped, tromp·ing, tromps Informal v.intr. 1. To walk heavily and noisily; tramp. 2. ," authored by Stephen Murphy. ACI President Murphy promoted himself as a former homeless, alcoholic, Vietnam veteran who made a fortune investing in distressed commercial real estate. Since ACI was closed down, Murphy has gotten involved in a Venice-based residential real estate video/infomercial business called American Real Estate Company Inc. That company also has been investigated by federal authorities and has become mired mire n. 1. An area of wet, soggy, muddy ground; a bog. 2. Deep slimy soil or mud. 3. A disadvantageous or difficult condition or situation: the mire of poverty. v. in civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . |
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