Receiver reports new offer for troubled investment firm.Some investors could lose their entire stake in 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 Court-appointed receiver Dick Shaffer said last week that he has a letter of intent from a buyer interested in paying "real money" for the real estate assets of American Capital Investments Inc. -- the Marina del Rey-based investment firm placed in receivership receivership In law, state of being in the hands of a receiver, a person appointed by the court to administer, conserve, rehabilitate, or liquidate the assets of an insolvent corporation for the protection or relief of creditors. last fall after fraud charges were leveled by the Securities and Exchange Commission. Meanwhile, Shaffer's attorney indicated that only investors who invested with ACI prior to April 1993 have a stake in ACI's properties, since all moneys invested after that date were "spent" by the company, not invested in anything tangible. Of the $16 million in investor funds raised by ACI, only $4.6 million was invested in property (all before last April) and that is the most the company's 200-plus investors can hope to collect, said attorney Charles Slyngstad, of Musick, Peeler & Garrett, speaking at a court hearing. Investors who were allowed to speak at the hearing indicated they are dissatisfied dis·sat·is·fied adj. Feeling or exhibiting a lack of contentment or satisfaction. dis·sat  is·fied with Shaffer and want to take over management of ACI and its property themselves. Shaffer was appointed receiver in September by U.S. District Court Judge Consuelo Marshall. The SEC last August filed a complaint seeking to freeze ACI's assets and alleging that ACI executives had been operating a "fraudulent, Ponzi-like scheme," selling unregistered real estate securities and using investor funds to pay operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and make payments to other investors. Named in the complaint are ACI, company President Stephen Murphy, Vice President Ken Sorensen, Adfin Corp. -- the telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. firm that sold ACI securities -- and Adfin owner Richard Otto. Many investors were solicited based on their purchase of Murphy's investment books, including the highly publicized pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. Adj. 1. publicized - made known; especially made widely known publicised "One Up On Trump" -- Murphy's story of his history as a homeless, alcoholic Vietnam veteran This article is about veterans of the Vietnam War. For the French psychedelic musical group, see Vietnam Veterans. Vietnam veteran is a phrase used to describe someone who served in the armed forces of participating countries during the Vietnam War. and his theories about making money by investing in distressed real estate. The Business Journal first reported in May 1993 that Otto's company was peddling unregistered real estate securities to people who bought Murphy's book. All parties involved in the ACI case seemed stunned stun tr.v. stunned, stun·ning, stuns 1. To daze or render senseless, by or as if by a blow. 2. To overwhelm or daze with a loud noise. 3. at the Feb. 28 hearing when Shaffer's attorney Slyngstad said that the receiver's office had received an offer for ACI's assets on Feb. 23. So far, the only company known to have expressed an interest in ACI's property was Irvine-based Nona Morelli's II Inc. -- a pasta company with interests in casino gaming, which had offered to pay for the property with stock. After the hearing, Shaffer said the current offer is "for real money, as opposed to spaghetti spaghetti: see pasta. stock," but he would not reveal the buyer or the amount bid, nor was he urged to do so by Judge Marshall. The chief purpose of last week's hearing was for Marshall to hear arguments on whether to honor a request for payment of $210,000 for the services of Shaffer, Slyngstad and accountants from Price Waterhouse in September, October and November 1993. Several investors had submitted letters and filings to the court objecting to the bills submitted by Shaffer and his "staff." Marshall allowed the investors to testify To provide evidence as a witness, subject to an oath or affirmation, in order to establish a particular fact or set of facts. Court rules require witnesses to testify about the facts they know that are relevant to the determination of the outcome of the case. at the hearing. "It is unusual that investors would feel they are not being sufficiently represented," noted Marshall. "Some don't feel the SEC is representing their interest. ... Some of the investors want to take over the receiver's job." Thomas Norminton, attorney with Norminton & Wiita 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. , representing the investors' committee, said the ACI "estate" simply can't afford to pay $800,000 per year to Shaffer, his lawyer and accountants. Norminton and various investors complained they have no idea how long it will take Shaffer to complete his evaluation and make a recommendation on disposition of the company's assets. Meanwhile, Shaffer has spent all ACI's cash, they complained. It was then that Slyngstad revealed that an offer had been made for ACI's real estate portfolio, which consists of an equity interest in eight pieces of commercial property. In the receiver's initial report filed last January, Price Waterhouse accountants predicted that if ACI's portfolio was sold en masse en masse adv. In one group or body; all together: The protesters marched en masse to the capitol. [French : en, in + masse, mass. , the proceeds would not cover the properties' debt. Most of the buildings acquired by ACI operate with a negative cash flow, and "ACI's properties are worth no more today, and in several cases much less, than their value on the dates of acquisition," the report stated. |
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