Our expert was engaged as the Receiver in a major Receivership resulting from fraudulent operations by a Registered Investment Advisor (“RIA”) who managed and invested approximately $100 million in funds deposited from 80 clients and investors over a period of 10+ years. Read more…To date the Receiver has been successful in achieving asset recoveries of $30 million or 50% of “net cash” invested while spending less than 5% in total Receivership expenses.
The Receivership has involved:
- The management and extensive legal work around 7 individual but co-mingled receiverships
- Forensic tracing of thousands of cash transactions and transfers between Special Purpose Investment Entities (“SPIE”), investors, operating companies and vendors
- Shutting down and liquidating operating companies
- Negotiating settlements with vendors
- Reviewing and processing dozens of investor claims
- Investigating D & O insurance policies and third party malpractice claims
- Selling intellectual property for $10 million to Google
- Performing Board Observer roles
- The selling of a company for $54 million to a NASDAQ listed public company and subsequent assignment of responsibility as the Shareholder Representative of an $8 million escrow holdback
- Working closely in cooperation and negotiating as necessary with several government agencies- DOJ, SEC, FBI, and IRS and overall maximizing net asset recoveries for the ultimate distribution of cash and well being for 80 investors who, in many cases, had their retirement and life savings at risk of total loss
Engaged to take control of a company that was placed in receivership when its operations ceased as a result of the owners’ failure to agree on company operations, our Receiver was charged with collecting outstanding accounts, settling outstanding debts, and making final liquidating distributions to creditors and the owners. Read more…The Receiver was also called to testify at a trial concerning other litigation between the business owners. The realization of assets and settlement of liabilities was complicated because outstanding accounts were due from companies based in Russia, Hong Kong, Canada and Japan. The total amount collected and distributed was approximately $3,000,000.
Engaged as the Receiver covering the assets of a member of a prominent Seattle family, our expert was tasked with selling properties including a home, a farm, a small hotel, and 80 acres of land on Maui. Read more…This engagement was handled with great sensitivity and discretion while dealing with trust officers and creditors ranging from hard moneylenders and taxing agencies to ex- farm hands.
One of our experts represented the Receiver in a situation involving a deadlocked board of directors of a closely held company that owned a state-of-the-art floating fish processor. Read more…This engagement included developing the value of the company and its key assets by working closely with various experts in the fishing industry, and current and projected national and state regulation governing fishery preservation and catch quotas. It required working through contentious positions of the two shareholder factions and ultimately making a recommendation for the company’s disposition, which was accepted by the Court over the vigorous opposition by one of the shareholder factions.
One of our experts was engaged as a Trustee, representing a majority shareholder, when the shareholder and the Board of Directors of a mid-sized, rapidly growing company each filed litigation claiming wrongful actions by the other, threatening the company’s operations and viability. The Trustee established control in a highly volatile, litigious environment, gaining the trust of all of the parties, legal counsel, courts, arbitrators and employees involved. Normal operations were re-established, growth targets were met, and a plan was developed and implemented to maximize the value of the company and market it aggressively. The conflicting rights of all parties were protected, and the company was successfully sold in a timely manner.
Engaged as a Trustee for multiple private trusts, each owning certain rights to various Hollywood movies of varying degrees of fame, our expert’s engagement included the complex transaction of transforming a series of LLCs into private trusts with each member of the companies transferring their membership interests in the companies into beneficial interests in the trusts. There were hundreds of investors across the country who had invested millions of dollars of seed money for the movies. This engagement also included overseeing the successful New York-based litigation for copyright infringement against one of the largest film companies in the United States. Monetizing the assets of the trusts involved dealing with “Hollywood accounting,” complicated national and international film leasing and distribution arrangements, and the sale of residual rights.
Represented the Trustee in a bankruptcy involving a partially remodeled downtown Seattle hotel, our expert’s engagement included working closely with the lender to fund the completion of the project in conjunction with the complex sale agreement to a new owner. The engagement also involved permitting, construction and design issues as well as working through tax credits and a web of materialman lien claims.
Engaged to handle an out of court wind down in lieu of court involvement of a physician owned managed care network involving dozens of doctors and multimillions in annual revenues, our expert’s engagement included dealing with the complexities of medical service reimbursement, the management of dozens of independent minded physicians and a model for providing medical services in a financially sustainable manner that was floundering in a sea of changing regulation and reimbursement models. The company was successfully wound down in a manner that bridged the competing goals of the stakeholders.
Our expert represented one of the world’s largest oil companies in the Chapter 11 reorganization of a spin-off company. The key adversary in this case was another large oil company. Tens of millions of dollars were at stake as well as international reputations in this highly competitive field. The engagement involved governance issues, deep seated antipathies and ultimate legal responsibility for the financial aftermath of a terrible accident. Our expert was able to resolve issues through a consensual plan of reorganization.
One of our experts represented a primary lender in the Chapter 11 Reorganization of a crab fishing fleet. The cooperative approach that was taken resulted in the successful reorganization of the debtor, full payment for the lender, significant payment to unsecured creditors and an ongoing profitable relationship for the lender with the debtor in a new business.
Our expert represented one of the Pacific Northwest’s largest forest industry companies in its successful Chapter 11 Reorganization. This engagement involved timber contract obligations to the US Forest Service and thousands of acres of timber rights and tens of millions of dollars of bank debt. Competing lien interests of loggers, banks and bonding companies and the debtor emerged from Chapter 11 and successfully continued in the timber products business.
Our expert represented the committee for all unsecured creditors in a Chapter 11 Reorganization involving a major Northwest cruise line. The engagement included overseeing the liquidation of the physical asset base of the company as well as the litigation against a Fortune 500 company that had been the debtor’s parent, the estate’s key asset. The litigation resulted in a multimillion dollar recovery for the estate and allowed a significant recovery for unsecured creditors. Our expert led the negotiating team on behalf of the debtor to finalize the terms of an extremely complex Chapter 11 plan that provided for settlement of the litigation, release of the parent’s directors and liquidation of all of the debtor’s assets.
Our expert represented a Hong Kong based international company in its multimillion dollar acquisition of a publicly traded United States logistics company with multiple subsidiaries and affiliates across the U.S. The engagement included negotiating the sale of one of the affiliates to a local logistics company and winding down the subsidiaries through out of court arrangements in lieu of receiverships or bankruptcies.
Our expert was engaged as a Trustee, representing a majority shareholder, when the shareholder and the Board of Directors of a mid-sized, rapidly growing company each filed litigation claiming wrongful actions by the other, threatening the company’s operations and viability. The Trustee established control in a highly volatile, litigious environment, gaining the trust of all of the parties, legal counsel, courts, arbitrators and employees involved. Normal operations were re-established, growth targets were met, and a plan was developed and implemented to maximize the value of the company and market it aggressively. The conflicting rights of all parties were protected, and the company was successfully sold in a timely manner.
Our expert represented one brother against another in a bitter dispute over the ultimate disposition of the international manufacturing company created by their father. The case involved international travel, non-English speaking witnesses, and complex business and tax issues. The conflict was ultimately resolved through a difficult mediation.
Our expert represented the Receiver in a situation involving a deadlocked board of directors of a closely held company that owned a state-of-the-art floating fish processor. This engagement included developing the value of the company and its key assets by working closely with various experts in the fishing industry, and current and projected national and state regulation governing fishery preservation and catch quotas. It was required to work through contentious positions of the two shareholder factions and ultimately make a recommendation for the company’s disposition, which was accepted by the Court over the vigorous opposition by one of the shareholder factions.
Our expert was engaged by a lender who was being sued by the Trustee of a corporate bankruptcy with a claim to recover what the Trustee considered to be inordinately high fees and interest charged on $32 million in loans by the lender. This engagement included the review of an extensive business plan and loan documents and the rendering of an opinion on the viability and marketability of a business proposition to become one of the largest bottled water suppliers in the U.S., having utilized the proceeds of the loans to make a very advantageous and economically attractive purchase of all property and water rights of what was previously the long-standing Olympia Brewery Company located in Tumwater, Washington. An opinion was given that the value obtained in the purchase of the property and the tremendous business opportunity it provided to start and potentially become a $500 million (annual sales) company within 5 years far outweighed any excessive loan fees. This engagement included testifying in a court hearing and significantly impacting the judge’s decision fully in favor of the lender.
Real Estate Strategy/Property Management
Our expert was engaged by the Oregon Public Employees Retirement System to assess the 6th and Pike Tower building in Seattle and make recommendations on how to reposition the building and with the objective of fully leasing it in a deteriorating rental market. This engagement included taking an ownership role with complete management responsibility. The building was renamed the 520 Pike building as part of the repositioning strategy and was largely an unleased building, which, at the time, was outside the downtown Seattle core. In further response to the repositioning need, the lobby was renovated as well the exterior and entry of the building. The parking and building reception areas were integrated and a complete amenity package including a health club and conference rooms were added. Finally, deferred maintenance and staffing were addressed. Most importantly, the brokerage community was engaged once the improvements were complete and new management was in place. This engagement produced a very positive outcome and demonstrated the ability to make decisions and complete transactions that resulted in the lease up and subsequent sale of the building.
Our expert worked closely with a lender to take over a troubled, unfinished condominium project and convert the building to luxury apartment rentals. Modifications were completed to common areas under budget and 100% occupancy was achieved within two years. A 75% reduction in an underlying loan balance was negotiated with a federal regulatory agency and the project was successfully sold to international investors for a substantial profit above the negotiated loan payoff.
Our expert represented the co-owner of hundreds of acres of partially permitted land in Thurston County. The other owner had defrauded the co-owner for millions of dollars by diverting funds into another project. This engagement included working with state and county officials to determine the extent and status of permitting work done, examining details of an underlying public bond issuance to cover some of the improvements, identifying and dealing with problems centered on loss of water through natural events (lowering water table) as well as diversion and/or sale of some of the company’s water source by the co-owner to the derogation of the project and competing claims of native American tribes and neighbors. Eventually it was possible to arrange a court-approved sale of the project to another entity.
Intellectual Property Sales
Our expert was engaged by a Receiver to broker and sell the patent portfolio of a defunct company that had been placed under judicial receivership in the context of a fraud indictment issued by the U.S. attorney and claims by the Securities Exchange Commission against a Registered Investment Advisor (“RIA”). The RIA was the defunct company’s primary shareholder through his investment holding companies. The defunct company never achieved any revenue during its entire 10-year operating life, but did amass substantial Intellectual Property of over 100 assets, including 65 issued U.S. Patents. These IP assets were properly documented and marketed utilizing a very effective bidding process to key targeted prospective buyers. Ultimately a $10 million cash sale was negotiated and successfully completed with Google.
Private Investigation/Forensic Accounting
Our expert was engaged to conduct the investigation of a retail store with $20 million annual gross receipts to determine the extent of an employee’s theft. Complex analysis of point-of-sale computer system and data was utilized to compare the suspect employee’s sales with other employees’ sales and to calculate a loss of approximately $400,000. The investigation and results were coordinated with local law enforcement, FBI, and prosecutors. A detailed analysis report was prepared and utilized by the U.S. Attorney’s office in the indictment of the employee, who pled guilty of the amount embezzled, and for the business owner’s to file an insurance claim. This engagement included working with the business owner to assess the possibility of other losses and to improve internal controls.
Engaged to conduct an analysis in a securities fraud case involving over 300 investors/victims, our expert reviewed voluminous documents, including records of numerous bank accounts, correspondence, e-mails, victim verification forms, and related financial records. Extensive tracing of transactions was required including funds invested, interest calculations, and repayments to determine balances due to each investor/victim. Presentations covering investigative methods and results were made to the Washington State Department of Financial Institutions. Full restitution, in excess of $4 million of invested funds, was made to all investors/victims.
AJBR’s affiliate service team includes the Seattle-based firm of Brueggeman and Johnson Yeanoplos, PC, which specializes in the valuation of privately-held businesses for the purposes of facilitating transactions, gifting, estate planning, IRS disputes, litigation, marital dissolutions and other purposes. With over 25 years of experience and a highly-credentialed staff, BJY has valued and assisted thousands of businesses in hundreds of industries through its offices in Seattle and Tucson. BJY’s clients have ranged from small, straight forward companies to large, complex firms with billions of dollars in sales.
Business Merger/Sales and Debt Restructuring
AJBR’s affiliate service team includes the Seattle-based Alexander Hutton, Inc. investment banking and advisory firm. Founded in 1986, AHI has completed more than 200 M&A and debt restructuring transactions in the Pacific Northwest since inception and is one of the premier middle-market investment banking firms in the region. In addition, AHI is the Seattle office of M&A International Inc. – the world’s leading mid-market merger & acquisition specialists with over 600 professional advisors in 41 countries. M&A International has closed over 1400 transactions totaling more than $85 billion in value in the past 5 years.