A large group of us met with our Rep. Brent Barton last Saturday morning at Creator Lutheran Church. Brent brought us up to speed with what he felt were our only three possible outcomes: The bankruptcy works and the owner stays solvent, the bank forecloses and auctions off all the units, or an angel investor buys the place.
I welcome posts from folks who were there to get their perspectives rather than mine.
But here's what I learned from an attorney friend of mine.
The owner, Lawrence Kates, owns about $100 mil. in property, including two homes & an office building in Newport Beach CA, a 1000 acre ranch in British Columbia, and a warehouse and some land in Washington in addition to 192 condo units in our complex. Based on his own calculations, Kates' net worth is only about $10 mil. But that includes his valuation of the 192 unsold condo units at $167,000 each which is unrealistic. At that valuation, his share of the condo complex would be worth $32,064,000. 2/3 that figure is more like it, meaning that Mr. Kates is totally under water. He owes $300,000 is back property taxes. His cash flow is negative $30,000/mo. He owes millions in unpaid mortgage interest. I don't think the bankruptcy will work, as far as him reorganizing his affairs and paying everybody.
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