Developer IDM will give stock to former investors in its deals.

Newly emerged from Chapter 11 bankruptcy protection, Long Beach-based developer and syndicator IDM Corp. is expected by month's end to distribute new stock to 12,000 local investors, some of whom lost millions of dollars in IDM's limited partnerships.

IDM, which filed for bankruptcy protection along with 18 of its 91 limited partnerships last July, will distribute 10 million shares of common stock to former investors, said new Chief Executive Officer Bruce Juell.

At least 12,000 Californians invested in IDM's limited partnerships, losing an estimated $300 million. The 91 partnerships were sold only in California to investors primarily concentrated in the Southern half of the state.

Under the reorganization plan, it is still unclear how many shares investors will get or what shares will be worth, but the stock will initially be worth less than 50 cents per share, Juell said.

Under the reorganization, all outstanding shares of IDM, all of which were held by former CEO Choppin, will be canceled and IDM will issue 10 million shares of new stocks to creditors. IDM's unsecured creditors will become the new owners of IDM and all of its assets.

The new common stock expected to be distributed by the company will not pay dividends, so investors will recover no monthly income from the stock. IDM is not a public company so there is no market for the stocks, which are not freely tradeable.

Juell said each limited partnership will be awarded stock, which will then be distributed to former investors. He said it is still unclear how much the stock would be worth, but called a recoup of more than 50 cents on the dollar "very optimistic."

The company emerged from bankruptcy protection on March 22 with a net worth of less than $5 million and controlling assets of $400 million.

Juell, IDM's CEO since April 8, is a former real estate consultant who once headed corporate finance for Bateman Eichler, Hill Richards in Los Angeles before it was bought by Kemper Securities.

Juell took over from Michael J. Choppin, who founded IDM in 1969. Choppin remains a member of IDM's board of directors.

"The company still has some high quality projects," said Juell. "I wouldn't be here if I didn't think there was an opportunity to pull this company up by its boot straps."

In the 1970s and 1980s, IDM sold limited partnerships that invested in Southland office building, apartments and industrial facilities or which purchased mortgages on such properties. All the company's properties are in California, and at least 40 percent are in Long Beach.

Once the largest developer in Long Beach, IDM retains an interest in the Greater Los Angeles World Trade Center in Long Beach.

While the company proclaims itself on the recovery path, embittered investors -- some of whom lost life savings in the limited partnerships -- say they have little hope of recovering their money through the new IDM common stock. They claim that the company is in no position to recapitalize, given the depressed California real estate climate and the liens pending against many of the company's properties.

"It is an unworkable, impossible situation to do what they plan to do," said former IDM investor Joe Burrow, who is a local real estate developer. "The property has so much against it, they can't feasibly or economically develop it."

CEO Juell agreed that "all of our properties have a substantial amount of debt. It will be some time before we can realize equity growth."

Burrow, who with other investors created the IDM Investors Protection Committee, said he is now convinced that "IDM is worth nothing."

Burrow said many investors are confused about the equity-for-debt swap.

"A lot of people don't understand," he said. "They think, 'Oh goody, we're going to get stock.' And IDM says, 'We're going to bloom and make a market for this stock,' but I will feel lucky if I get two cents on the dollar."

Many investors are praying they will get something back on their investments, while others are resigned to their losses.

"These stocks we're getting are not freely tradable, so for me they are just another piece of paper for the bathroom wall," said IDM investor Michelle Rajadhyaksha, who said she and her husband lost more than $200,000 collectively after investing in at least 10 IDM partnerships.

Rajadhayaksha, who said a former broker at Tustin-based Titan Value Equities Group, sold her the partnership, said she blames the Southern California brokerage community for selling the partnerships without fully disclosing the risks.

"I'm angry, not so much about the company, but at the investment advisers and brokers who sold this stuff," she said. "I trusted my broker and what he did was criminal."

Rajadhayaksha said her broker told her the limited partnerships were freely tradable and that she would not lose any of her principal.

"In (Las) Vegas you can get in" and gamble your money, said Rajadhayaksha. "But you can get out. With these limited partnerships, we could get in but we couldn't get out."

Jon W. Darnall, who sold the partnerships during the late 1980s, said that when problems started to develop, he quit selling the partnerships. But many brokers did not, he said.

"I blame the brokerage community for a lot of the problems," Darnall said.

Last Wednesday, IDM executives met with the brokerage community to educate brokers about the stock swap and encourage them to calm investors' fears. However, some investors are still emotional about the loss and choke up when asked.

A 63-year-old retired schoolteacher said she is "praying" that IDM becomes a healthy company and she recovers some of her lost $44,000 in retirement savings. The woman, who did not want her name used, said she is now living with people she takes care of in exchange for free board. She is looking for a teaching job.

"I have to start over at age 63 with the job market as it is," she said. "I felt suicidal when I found out, I thought, 'This is it. I've had it. I've worked a lifetime'" for nothing, said the woman who was planning to retire on the money.