Document - SEC vs. WESTMOORE MANAGEMENT, LLC, ET AL ...

Case 8:10-cv-00849-AG-MLG Document 162 Filed 08/07/13 Page 7 of 20 Page ID #:253412345678910111213141516171819202122232425262728may be found in my settlement motion filed in June 2013 (docket entry no. 153). Abrief summary is as follows:(a)In 2007 and 2008, Westmoore Lending Opportunity Fund, LLC(“WM LOF”), loaned money to HW Partners and Huntley Family Investments, LLC(“HFI”). Certain loans were secured by mortgages on agricultural real property inWalla Walla, Washington.(b)Also in 2007, WM LOF executed promissory notes in favor ofMKA Real Estate Qualified Fund I, LLC (“MKA”). The aggregate principal amountowed to MKA was approximately $4 million. According to the notes, the loans weresecured by, among other things, certain of the loans made by HW Partners and HFI,and WM LOF’s related mortgages on the agricultural real property. “Assignments”of some of the mortgages were recorded in mid82008.(c)In September 2008, HW Partners executed a promissory note infavor of WM LOF for approximately $3.23 million. The note consolidated and paidoff the prior loans. The new note was secured by new mortgages on seven parcels ofthe agricultural real property owned by HW Partners. “Satisfactions” of previouslyrecorded mortgages were recorded.(d)Around the same time, WM LOF executed a promissory note infavor of Lester and Betsydiane Hendrickson (the “Hendricksons”), in the principalamount of $1 million. This loan was secured by, among other things, HW Partners’$3.23 million note and the related mortgages.(e)In July 2011, HW Partners filed a Chapter 11 bankruptcy petitionin the Eastern District of Washington. Pursuant to Bankruptcy Court approval, HWPartners has sold all of its real property and related assets.(f) Although there is $1.95 million available to pay down the $4+million debt that was owed to WM LOF, the Hendricksons and MKA each assertedthat they, as WM LOF’s secured creditors, were entitled to the sale proceeds. Thereis a dispute being litigated in the Bankruptcy Court by the Hendricksons and MKA1041754.1 25713A7RECEIVER’S FOURTH REPORT AND ACCOUNT