More than 40 creditors are seeking some $420 million from Brentwood businessman Ezri Namvar, who was forced into bankruptcy two months ago after his various ventures collapsed, according to a federal court filing.
The creditors include lenders such as General Electric Capital Corp. and Wells Fargo & Co., in addition to multiple members of the local Persian Jewish community who personally invested in Namvar’s real estate and other ventures.
The Jan. 30 filing in U.S. Bankruptcy Court in Los Angeles is the first official look at what Namvar owes. It lists 40 Namvar creditors holding the largest unsecured claims and is not a comprehensive list of all to whom he may owe money, a number that by several estimates may reach 350.
It comes on the heels of Jan. 28 court filings in which Namvar and his Namco Capital Group Inc. investment company acknowledged for the first time that they are bankrupt and seeking Chapter 11 protection. A group of Namvar’s investors filed involuntary bankruptcy actions against him and Namco in December.
Timothy Neufeld, an attorney for Namvar and Namco, said his client, who had tried to reach an out-of-court settlement with his creditors, now hopes to reach a settlement through bankruptcy proceedings.
“Mr. Namvar and Namco will continue to work within the bankruptcy system to try to do what is in the best interest of their creditors,” said Neufeld, declining further comment.
Namvar did not answer repeated telephone calls for comment.
Namvar’s investments include Namwest LLC, a bankrupt residential developer in Phoenix; Park Fifth, a stalled development in downtown Los Angeles that would be the tallest condo tower in the area; and defunct L.A.-based Security Pacific Bank, in whose predecessor Namvar bought a majority share in 1997.
Namvar’s financial woes are the result of the recession and dramatic downturn in the real estate market, but what’s unusual is the way he raised substantial sums of his money: The 57-year-old businessman convinced fellow members of his Persian Jewish community in and near Beverly Hills to sign over their money, typically $1 million or more each, with scant knowledge of how the money would be invested and with little recourse or collateral, according to investors.
Farhad Yazdinian, an investor who claims he is owed $2.18 million according to the court filing, said he hopes for progress in the bankruptcy case against Namvar.
“I am trying to get on with my life,” said Yazdinian. “Life goes on people have to go on with their life. God gives you time; time will heal the problems.”
The next step in the bankruptcy court process: On Feb. 24 there will be a hearing on a motion to appoint a trustee, who will oversee repayment of Namvar’s investors.
The investors
At least 24 lawsuits have been filed against Namvar and Namco since the fall. Most allege that he failed to pay back the investors, though some of the suits are from financial institutions alleging nonpayment of loans. Several of those plaintiffs are also listed as creditors in the Jan. 30 bankruptcy court filing.
The list of creditors names nine banks, including Community Bank of Nevada, Cathay Bank and Mirae Bank. The list also names 27 individuals, three trusts and nine companies.
The biggest creditor named in the bankruptcy court filing is GE Capital, the finance unit of General Electric Co. GE Capital claims it is owed $97.9 million. In a lawsuit filed Nov. 13, the company accuses Namvar of defaulting on an $86.8 million loan he took out when he purchased the 469-room downtown Marriott in 2007 for $115 million. GE Capital’s attorney on the case, Steven Winick of Sheppard Mullin Richter & Hampton LLP, said he was not authorized to comment.
Another prominent company named in the filing is Canyon Partners, the Beverly Hills asset manager. The company is the fourth largest creditor named on the list. Its entity, called Canyon Partners Realty Holding Co. IV LLC, claims it is owed $25.5 million.
Canyon Partners is widely known for its partnership with basketball great Earvin “Magic” Johnson in another venture called Canyon-Johnson Urban Fund. There is no indication that Johnson is an investor in the creditor fund named in the court filing. Gerald Goldman, listed as the contact for Canyon Partners on the filing, declined to comment.
Abraham Assil, one of the investors that pushed Namvar into involuntary bankruptcy, is a creditor and a prominent member of the Persian Jewish community. He claims he is owed $5.94 million, according to the filing.
Assil said he was frustrated in previous attempts to seek repayment, and believes that the bankruptcy action and assigning of a trustee to handle the situation is the best route.
“You have to understand something about Ezri, the last couple of months have been about information, misinformation and ‘disinformation,'” charged Assil. “It has been very difficult to negotiate with him because the end game for him is that if he opens up his books and it becomes transparent it might become detrimental to him.”
Assil’s attorney, A. David Youssefyeh, who also is advising about 20 other clients who say they are owed money, said many are thankful the matter is now in bankruptcy court even though Namvar is continuing to seek an out-of-court settlement despite claims otherwise.
“We are still hearing all sorts of rumors of assets being transferred around and money being transferred around and that’s why we want a trustee appointed, because we can’t really trust Namvar to make a decision about anything,” said Youssefyeh.
Investors should know more about the businessman’s holdings March 15, when a list of the assets and liabilities of Namvar and Namco will be filed with the court.
