Local businessman Ezri Namvar's plan to pay back up to $400 million he's been accused of losing has been halted by a group of his investors, who on Dec. 22 filed involuntary bankruptcy actions against him and his L.A. investment company, Namco Capital Group Inc.
Namvar, 57, had been trying for several weeks to work out a plan to reimburse his 300 to 400 mostly Persian Jewish investors. The goal was to create an entity that would have used the assets of Namco, Namvar and those of his family to compensate investors.
Namvar's problems are unusual because he raised money directly from those in the Persian Jewish community in and near Beverly Hills. Some of them are said to have lost their life savings.
But a small group of investors threw Namvar and his company into involuntary Chapter 11 bankruptcy because they felt the out-of-court process was moving slowly, and they were concerned about alleged preferential treatment given to some investors.
"We have not been able to get his attention to the extent necessary to get this resolved. So we have put him in involuntary bankruptcy and hopefully we can get some funds to the most at need," said Abraham Assil, a Namvar investor who is spearheading the effort.
Assil and four other individuals, three trusts and one limited liability company are named as creditors in the bankruptcy filing against Namco; six of those filers are named in the action against Namvar. A total of $7.7 million is being sought in both actions.
But the attorney representing Namvar and Namco said the businessman still hopes to resolve the matter out of court and will seek to have the bankruptcy withdrawn by the creditors.
"Mr. Namvar and Namco never wanted a bankruptcy, never filed a bankruptcy and worked hard to avoid a bankruptcy," attorney Timothy Neufeld said.
A legal response to the bankruptcy filings is due later this month.
Namvar's businesses soured with the economic downturn. A Phoenix-based developer that Namco co-owns filed for bankruptcy in the fall amid the real estate collapse, among other busted ventures. At least 21 lawsuits have been filed against Namvar and his company, with most alleging he hasn't paid back investments.
Namvar, himself a Persian Jew, started selling assets last year to pay back investors. A local office building was sold for $37 million and another is in escrow. This has sparked concerns about preferential treatment, said A. David Youssefyeh, an attorney representing about 20 clients who claim they're owed money but haven't taken legal action yet.
"I don't think there is any choice but to file this bankruptcy," said Youssefyeh, who until recently had supported efforts to keep the matter out of bankruptcy court.
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