The California Department of Business Oversight ("DBO") filed its civil lawsuit on September 9, 2019 against Defendants. On January 14, 2022, the Court granted the Receivers request. In 1984, the company declared bankruptcy. That case, which is a separate civil lawsuit unrelated to the new . May 3, 2022 Final Determination of Investor Claims. The listing is available here: https://www.loopnet.com/Listing/20751-Aristotle-Dr-California-City-CA/19775266/. The contract had no cancellation period, and buyers were required to pay $41 a month in membership fees to Silver Saddle -- indefinitely. In May 2020, DBO filed an amended complaint, adding additional defendants, SS Purcho, LLC, Accelerated Assets, LLC, and Pahrump Valley Real Estate Co., LLC. A promotional brochure from Silver Saddle, which is part of the DBO's lawsuit against the company. On May 13, 2021, the Receiver asked the Court for permission to proceed with the sale of the land to the solar energy company. And the total claim will be used to determine the investors pro rata share of any distribution(s) ordered by the Court. 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. In sum, the Receiver (1) completed the efforts to vacate the Burbank office and relocate the business records to the Ranch (which defendants had in process at the time of the TRO); (2) retained a former employee to be the full-time caretaker of the Ranch; (3) secured insurance for the Ranch; and (4) continued to minimize operating expenses at the Ranch. 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 . AFTER GREAT WESTERN CITIES WENT BANKRUPT, A FORMER EMLOYEE QUIETLY CONTINUED SELLING VACANT LAND IN CALIFORNIA CITY. The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo investors. 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. The Motion is posted in full in the Documents section of this webpage. The Receiver intended to use the money from the sale to pay the expenses of the Receivership Estate and provide a first distribution of funds to Silver Saddle investors to begin compensating them for their losses. Port officials say "resuming cargo operations at Americas busiest port complex is critical to maintaining confidence of our customers and supply chain stakeholders.". An onslaught of velella velella washed up on shore this weekend on Southern California beaches. Knight stated she emailed Jones the submission forms for the offer, confirmed the acreage size of the ranch listing and offered another tour, which was declined. As you may be aware, the Court approved the sale of the Silver Saddle Ranch and Club ("Ranch") for $2,100,000. Notice of this filing will be provided to investors by email and via posting on the receivership website. Of the four purchase offers presented for the Ranch, the Receiver has accepted an offer of $1,774,500. The hearing originally set for August 19, 2020 on the Receivers motion to approve the sale of real property owned by Silver Saddle Ranch & Club, Inc. has been taken off calendar. To make sure you get our coverage: Sign up for our daily newsletters. (Chava Sanchez/KPCC). 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. The Court will need to approve a distribution before the proceeds from the sale can be distributed to investors. inter alia, defendants Silver Saddle Ranch & Club, Inc. (SSRC), Silver Saddle Commercial Development, LP (SSCD), Galileo Commercial Property Owners Association, Inc. (GCPOA), and Thomas M. Maney (Maney), alleging that said defendants offered and sold to the public an In Silver Saddle's case, approximately 1,000 acres of empty desert on the outskirts of California City, divided into 4,000 shares. What questions do you have about Southern California? Instead Judge Wohlfeil treated the ex parte application as an application for order shortening time, which he granted. 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. A copy is available the documents section of this webpage. The Top 5 newsletter catches you up with LAs top 5 stories in just 3 minutes. October 14, 2020 Motion to Approve Sale of the Silver Saddle Ranch and Club Filed andTelephonic Hearing Set for November 6, 2020 at 9:00 a.m. On October 13, 2020, the Receiver filed a Motion to Approve the Sale of the Silver Saddle Ranch and Club (Ranch) for $2,100,000. Internet Reaction Is Not Great, There's Something Else Blooming In The Desert: Massive Art Installations, What We Know About The Odd Blue Creatures Washing Ashore On SoCal Beaches, The Palm Springs Government Burned Down Their Neighborhood Now They're Seeking Reparations, The Very Busy Ports Of LA And Long Beach Are Effectively Shut Down, Everything Is Blooming In The SoCal Desert. In July, the receiver eventually accepted an offer from Kevin Feterik, who had partnered with local businessman Leland Krelle, for $1.77 million. 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). This will involve (1) calculating each investors claim and then (2) dividing this by the aggregate amount of all investor claims to get a pro rata figure which (3) will be multiplied by the amount available for distribution. However, the Court did ultimately approve the Receivers proposed method and procedures for a distribution. On September 28, the Receiver agreed to a sales price of $2,100,000 for the Ranch. As such, the Receiver accepted the offer and intends to seek Court authority to sell the Galileo Project land. The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors. For example, to date the Receiver has paid $285,580 for water alone. However, before this can occur, the current escrows must be canceled. The sales process continued and Mamann offered an initial offer of $1.8 million for the ranch and $600,000 for the Project land. The receiver filed a motion on Oct. 13 with the San DiegoSuperior Court to approve the sale. 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. DBO also stated that many victims spent as much as $30,000 in a scheme that lasted eight years. Instead, each investor will receive a share of the proceeds proportionate to his or her investment in the Galileo Project (a pro rata share). The Court said that the Receiver can continue to collect funds for the Receivership Estate, but the stay may affect the timing of a distribution to investors. But in an interview, Maney told me he and Silver Saddle have nothing in common with Nat Mendelsohn or Great Western Cities. Two Los Angeles artists have new work on display. Family Says Mental Health System Failed Their Son, A Los Angeles Family Seeks Answers And Accountability After Black Mom Dies In Childbirth. Any response must be filed before the hearing. Background on the Process to Reach a Final Determination of Investor Claims. The Court denied the Receivers ex parte application for an order cancelling escrows for the Ranch and Galileo parcels, and stated that it was not inclined to rule on the request via ex parte application. We have also accepted an offer to purchase the Galileo Project vacant land for $775,500. As you may be aware, the Court approved the sale of the Silver Saddle Ranch and Club (Ranch) for $2,100,000. But even if the sale goes through, it won't generate nearly enough money to make all the investors whole. We can only do this important work with your help. The DBO alleged that Defendants committed securities fraud in connection with the sale of undivided interests in 1,020 acres of vacant desert property near California City, California in Kern County. In the mid-1950s, real estate developer Nat Mendelsohn began to buy a ton of land in the Mojave Desert, 100 miles north of Los Angeles. The Receiver has been marketing the Ranch through a real estate broker for sale since May. Please contact Silver Saddle Ranch for hours of operation; 818-325-3930 File a complaint in less than 5 minutes! Silver Saddle Ranch and Club (Ranch), located at 20751 Aristotle Drive, California City, California 93505. The Receiver has filed a Motion to Approve the Sale of the Ranch and an Application to Shorten the Time for a Hearing, asking the Court to hear the Receivers Motion to Approve the Sale of the Ranch on July 16, 2020 at 8:30 a.m. via CourtCall. Four days, Mamann upped the offer to $1.9 million and $650,000 respectively. 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. As we have previously noted, the Galileo Project investors do NOT hold an interest in the Ranch property. In July, Mr. Maney asked the Court to stay this case, which would put the case on hold, until the criminal case is finished. The Court ordered that the Receiver cannot distribute any money to investors until the end of the case. 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. In that scenario, Investor As pro rata share is 3% and Investor Bs pro rata share is 5%. We will seek the Courts approval of the sale at a hearing on April 15, 2022, at 9:00 a.m., at the San Diego Superior Court, Hall of Justice, Department C-73. Also, inclusion of the prospective intervenors as parties would enlarge the issues in the case because many of the approximately 3,000 investors have disparate opinions regarding disposition of the receivership estate. A full copy of the Courts Minute Order is available in the Documents section of this webpage. The Motion was opposed by Defendant Accelerated Assets and Defendant Thomas Maney. Why A Key Program Is Falling Short, An Agonizing Battle With Schizophrenia Ends On A California Freeway. Right now, the case is set for trial in September 2022. The receiver moved to expedite the sale. DBO contends that businessman Thomas Maney and other associates conned people into purchasing land shares on theGalileo Project with the promise of earning a significant return on investment down the road. You have permission to edit this article. More information on these matters is available in the Receivers Fifth Interim Status Report (filed September 16, 2021) and the Receivers Sixth Interim Status Report (filed January 13, 2022). Copies of the Receivers Motion to Approve the Sale of the Ranch and Application to Shorten Time are available in the documents section of this webpage. 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. There would be a golf course, a university, a mall, a massive park and an airport. It had been going on for years. The sale is set to close in 60 days. Investors should look for the letter in the U.S. mail. Instead, each investor will receive a share of the proceeds proportionate to his or her investment in the Galileo Project (a pro rata share). If $100,000 is distributed, then Investor A would get $3,000 and Investor B would get $5,000. If the Motion is granted, the Receiver will be able to start the distribution process. Between 2011 and 2019, Silver Saddle made more than $56 million. The receiver also accepted a separate $775,000 offer from Feterik to purchase the Project land. On March 13, 2020, the Receiver filed the first status report. The new trial date is May 6, 2022. The price was adjusted a few times before stabilizing at $1.87 million. 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 second offer was made by Jones the night of Sunday, Sept. 13 for $1.8 million, with an $800,000 offer for the Project property. Mismanagement, Sloppy Hiring Practices, Lack Of Transparency. As part of the proposed sale, the Receiver and the Proposed Buyer will work cooperatively during the escrow period to secure the City of California City's consent to an assignment of the ground lease to the Proposed Buyer, the motion states. As previously reported, the receivership case was stayed (put on hold) on August 11, 2022 as the result of a request by Defendant Maney. The trial date in this case remains the same, September 16, 2022. The Court ordered that the Receiver cannot distribute any money to investors until the conclusion of the case. On March 19, the Court heard oral argument on the Receivers Motion and denied the Receivers request to proceed with an interim distribution to investors. While looking into the town's history, she said she spoke with an unofficial town historian and retired police chief who spoke about what becomes the podcast's focus: the Silver Saddle Ranch and Club controversy, which was the center of a series of land sales aimed at mostly immigrants. The criminal complaint is available in the documents section of this webpage. That same year, Nat Mendelsohn died. As Mendelsohn saw it, city folks could come and buy an empty lot -- for cheap. 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. 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. Winds could occasionally gust over 40 mph.. A few passing clouds, otherwise generally clear. Port officials say "resuming cargo operations at Americas busiest port complex is critical to maintaining confidence of our customers and supply chain stakeholders.". As such, while we have carefully considered the concerns raised by these investors, they do not have legal standing to object to the sale. According to the court document, the ranch includes six primary buildings: a club. IT'S UNLIKELY THAT PEOPLE WHO INVESTED IN SILVER SADDLE WILL GET THEIR MONEY BACK. Every two years, Desert X presents site-specific outdoor installations throughout the Coachella Valley. He sold land to tens of thousands of people. 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. For additional details on the sale of the Ranch, please see below. He was shocked to hear the news of the criminal charges. On July 16, 2020, the Court held a hearing on the Receivers Ex Parte Application to Shorten Time for a Hearing on the Receivers Motion to Approve the Sale of Silver Saddle Ranch and Club. On September 29, 2020, California City approved the Ranch for a lower water rate, which should result in lower water bills. Silver Saddle sold shares of the landbanking project for around 100 times more than what they were really worth. Every two years, Desert X presents site-specific outdoor installations throughout the Coachella Valley. No. Moving forward with a sale is essential because, as we have previously reported the costs to maintain Ranch are draining the limited resources of the Receivership Estate. For the latest national news from NPR and our live radio broadcast, visit LAist.com/radio. We will provide an update after the August 27 hearing. When emailing our office, please include your unit number to allow us to locate your records quickly. After the Court does so, the Receiver will submit a proposed Order to the Court consistent with the ruling. Each investor will, however, receive a part of the proceeds from the sale proportionate to the money he or she paid for the property, as described in the recently distributed Claim Determination letters. The listing is available here: https://www.loopnet.com/Listing/20751-Aristotle-Dr-California-City-CA/19775266/. Mismanagement, Sloppy Hiring Practices, Lack Of Transparency. The DBO alleged that Defendants committed . 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. Even though operating expenses have been reduced, maintaining the Ranch continues to drain the limited resources of the Receivership Estate. As the Receiver mentioned in his last update, the same proposed buyer who offered $2,100,000 for the Ranch also offered $900,000 for the Galileo Project vacant land. 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. The alleged scheme targeted Filipino, Chinese and Spanish-speaking individuals, according to an Oct. 1, 2019, DBO news release. The land sale scheme later became the subject of an eight-part LAist podcast California City.. There would be half a million residents living along winding city streets that were curved to slow down traffic. At a hearing on October 16, 2019, the San Diego Superior Court issued a Preliminary Injunction with asset freeze and confirmed the appointment of the Receiver over the Receivership Defendants (Silver Saddle Commercial Development, LP; Silver Saddle Ranch & Club, Inc.; The Galileo Commercial Property Owners Association, Inc., as well as any other entity that has conducted any business related to Defendants offering and selling of the Galileo Project investment contracts). Now, the California Attorney General has charged nine of those salespeople with felonies. Six former employees of the Saddle Ranch Chop House restaurant on the Sunset Strip in West Hollywood are suing the eatery chain, alleging they were subjected to sexual harassment by an. We do not anticipate that the criminal case will affect this case or the receivership. editor@desertnews.com, 8016 California City Blvd.St#7,California City,CA, Rosamond celebrates Diamond Street Project Completion, Rosamond Man arrested for Stolen Vehicles, Tehachapi Man arrested for 2007 Sexual Assault Pleads No Contest, S.K.U.S.D. The listing is available here: https://www.loopnet.com/Listing/Rutgers-Rd-Kennedy-Blvd-California-City-CA/20743529/. Receivers Notice of Final Claim Determinations and Proposed Distribution. He envisioned building a city of 200 square miles in this otherwise desolate spot. Will Orange County's Fledgling Clean Power Agency Survive. Defendants specifically targeted investors from several ethnic communities, many of whom spoke little to no English. LAist is part of Southern California Public Radio, a member-supported public media network. A copy of the listing brochure is posted in the documents section. The DBO alleges that Defendants sale of fractionalized interests in vacant desert land near California City, California violated California securities laws because such sales constituted the sale of unqualified or unregistered securities and were based on fraudulent and deceptive misrepresentations. In February of this year, the Court, after briefing and argument, confirmed that two other companies, High Plains Mesa Holdings, LP and High Plains Mesa Management, LLC, were part of the receivership estate. In September 2019, the California Department of Business Oversight filed a lawsuit against Silver Saddle, accusing the company of securities fraud. A lot of it was used to pay sales agents. The receiver requested the court to cancel the escrows and refund Feteriks deposit. 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. On 06/06/2019 MICHAEL BALAGTAS, filed a Contract - Other Contract lawsuit against SILVER SADDLE COMMERCIAL DEVELOPMENT, LP ,. But by the late 1960s, people who had bought land in California City were starting to realize that the growth they'd been promised wasn't happening. The Galileo Project property has been listed for $919,746. Although the sale closed as scheduled, High Plains Mesa Holdings filed a Notice of Appeal of the Courts Order authorizing the sale. According to the receiver, the resort operated at a loss that eventually hit $1.5 million a year but continued to operate on subsidies from other related business the defendants operated. For the five-month period of September 2019 to March 2020, water, electricity, labor, and insurance costs for the Ranch was approximately $230,000. 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. Will Orange County's Fledgling Clean Power Agency Survive? After completing this process, the Receiver will select the best offer and submit it to the Court for consideration. 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. If the DFPI is successful at trial or the parties reach a settlement, then the Receiver will seek permission from the Court to distribute the funds in the Receivership Estate to the Silver Saddle investors. July 10, 2020 Offer to Purchase Silver Saddle Ranch and Club. Two Los Angeles artists have new work on display. With the trial date approaching, the Receiver intends to proceed with the sale of the Galileo Project Land for $900,000 to the same individual who purchased the Ranch. On July 24, 2020, Judge Wohlfeil denied the Motion to Intervene filed by Antonio Garcia and Carlos Novelo. A 1969 newspaper ad for the real estate training program that Nat Mendelsohn used to sell so much land, "Land for sale" signs litter the empty desert in California City. The lowest water bill was $4,339 for mid-March 2020 to mid-April 2020. As a result, the properties continue to be marketed and listed through our real estate broker. 4, 2022), Gordon Decl. 12. Insperity, the payroll provider, will issue W-2s to former employees by January 31, 2020 via either U.S. mail or electronic delivery. They sued Mendelsohn's company, which was then known as Great Western Cities. Thomas W. McNamara was appointed as the Receiver in this case. Regulatory Resolutions, operated by Thomas McNamara, agreed to the sale of the 130-acre property for $2.1 million to the proposed buyer Aaron Mamann after a previous arrangement was canceled.
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