"At this time, the company has made the difficult decision to pause all redemptions until further notice. We are actively managing through a liquidity constraint. This notification from the company's COO marked the beginning of investor concerns about accessing their funds."
"The company was operating with critically minimal cash balances and that its ability to continue operations was at risk. Perhaps most important to many investors, I do not have an estimate that I have confidence in of the expected range of recoveries for the investors in the various funds."
"My rough estimate was that net recoveries would amount to a fraction of the total capital provided by investors. This statement from the restructuring specialist indicates significant potential losses for all investors in the company's various funds."
Pacific Private Money, a Novato-based real estate lending company, has suspended all investor redemptions due to liquidity problems. Over 100 investors, including Dennis Xifaras who invested $450,000, are at risk of losing their money. The company's COO notified investors of the redemption pause in December, and subsequently resigned in January. A restructuring specialist hired to address the company's financial challenges stated that PPM operates with critically minimal cash reserves and faces operational viability risks. The specialist indicated that investor recoveries would likely amount to only a fraction of their initial capital contributions. Approximately 130-140 investors are coordinating efforts to file complaints with authorities and regulators, including the Marin County District Attorney's Office, which is actively investigating the matter.
#investment-fraud #real-estate-lending #investor-protection #financial-crisis #regulatory-investigation
Read at The Mercury News
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