Hurst, Gearhart drawing battle lines

May 12, 2008

By DANIEL BLACKBURN and KAREN VELIE

Two prominent North County real estate confederates appear headed for a showdown after one announced today he “will be filing notices of default” on many delinquent loans, including at least several with developer Kelly Gearhart.

Hard money lender Jay Hurst Miller, president of Hurst Financial of Atascadero, wrote in an e-mail to investors, a copy of which was obtained by UncoveredSLO.com, that he “was advised by [his] attorney” to take the action against Gearhart as well as “all [other] applicable loans.”

A notice of default is sent to people who are far behind on making payments, and is the first step toward foreclosure.

Several large Miller-to-Gearhart loans are for the yet-to-be-developed Vista del Hombre golf course and multi-use commercial development on 14 acres east of the Paso Robles city limits. Miller has loaned Gearhart about $27 million on that project alone.

Also, Miller, Gearhart, Hurst and one of the company’s loan officers are being sued for fraud and conspiracy for their alleged actions in the handling of a $2 million investment by private lenders on an Atascadero commercial building.

One of those filing last week’s lawsuit, Murray Powell, said the action “is nothing more than window dressing by Hurst to show everyone they are cleaning up their act. It is way too little, too late.”

Powell said he “was told Jay [Miller] is filing default on our loans and others. If you look at our loan agreements, Jay is to file a notice if a property is in default for 30 days, and he has the ability to give the developer six months to work things out. We have loans that go back two to three years; technically, he should have filed those defaults when the loans became due.”

Powell said he has talked to San Jose law firms about filing a class action lawsuit. One of those, he added, was a lead firm in the class action lawsuit against Unocal in the Avila Beach cleanup.

Miller suggested in his e-mail to investors that his action “puts additional pressures on [Gearhart] to perform.”

The full text of Miller’s e-mail to investors follows:

“I wanted to inform you that I will be filing notices of default on all applicable loans as of next week. I was advised by my attorney to do so, to further protect my investors and their securities in these notes. Kelly Gearhart is still putting together his ‘work-out’ deals per project/loan. However, this puts us in the lead position and put additional pressures on him to perform. I am currently working with [Gearhart’s] office to get all accounting and documentation per loan/project. Therefore I can proceed with my meeting to present these ‘work-out plans’ for my investors. I will be in touch with my investors next week by either e-mail or mail as when to expect these meetings.”


Loading...

8 Comments

  1. ccn_debate says:

    Member Opinions:
    By: Anonymous on 6/17/08
    EFI has met thier match. What are you going to do about Kelly? The Kelly-Hurst deal is so much simpler than the EFI deal yet they have beaten you to the end game. You better stop licking your wounds and get up a united front before all the assets are gone.
    By: Anonymous on 6/13/08
    Why is everyone remaiming anonymous??? We should be banding together.
    By: Anonymous on 6/13/08
    I Tooo am an investor with BOTH Jay Miller and Gearhart on the loan. Where will THAT go???? What about Graves and DLG????
    By: Anonymous on 6/13/08
    I Tooo am an investor with BOTH Jay Miller and Gearhart on the loan. Where will THAT go???? What about Graves and DLG????
    By: Anonymous on 5/30/08
    slander
    By: Anonymous on 5/30/08
    asdf
    By: Anonymous on 5/17/08
    lets get a class action lawsuit on the roll!! Gearhart will have given everything away to his family in another few weeks?
    By: Anonymous on 5/16/08
    an obvious imposter!
    By: Anonymous on 5/16/08
    I hate all of you on this blog ive tried to do my best.I even have a hard time convinceing my famaliy members.what is going on.dont all of you see what is is happening
    By: Anonymous on 5/16/08
    Why does the Tribune even bother to report on EFI, Hurst, etc.?

    A week later than USLO and minus relevant facts, they could have just copied and pasted it.

    They're little more than trembling cubicle monkeys requiring permission from the Advertising Dept. to run a story.

    (0) 0 Total Votes - 0 up - 0 down
  2. ccn_debate says:

    By: Anonymous on 5/16/08
    INSIDER i wrote a folk song for you. sung to the tune of Davey Crockett. Sidee insidee king of the gearhart blogs. Up on a mountain top in atascadi kilt him a slobear when he was only 3 took it deeper&deeper down on his knees, now he rules the blogs with mr rikki sidee insidee king of the gearhart blogs
    By: Anonymous on 5/15/08
    Last time I looked KG owned about 230 acres of Commercial Property out there at Vista del Hombre. That 14 acres is just the beginning. It's probably worth a lot more than you think. Maybe not today or tomorrow but I bet you in a few years some big company if not KG will be all over that prime commercial property in the heart of wine country. You can build a lot of buildings on 230 acres zoned commercial/light industrial. Gotta look long term not just whats going on in the present.
    By: Anonymous on 5/15/08
    one last thought

    I'm sure when someone looks at your 14 acres @ vista del dumbre you say is worth 100 million they will take it over the 450 acres of fully mature vinyards with approved whinery plans adjacent to it asking 24 million. Sure.
    By: Anonymous on 5/15/08
    Its obvious that Gearhart isn't paying his investors thier interest payments by the articles. I wonder how long he can make payroll to maintenance the links golf course. He may have to mow it himself real soon. I know the people at the Eagle Creek course are real impressed with the upkeep on thier end of town. The Printery is looking real sweet too.
    By: Anonymous on 5/15/08
    NUTS
    By: Anonymous on 5/15/08
    insider I will be your friend Please join our group we would love to have you.Please write us Gay Mens Retreat P.O. Box 6247-75 san francisco calif. 22648
    By: Anonymous on 5/15/08
    to K.G.

    Hope you don't mind if I call you K.G. If I was you instead of spending so much time on me you might want to spend it on that workout plan. I suggest Smoke and Mirrors.
    By: Anonymous on 5/15/08
    to the Gearhart Gang

    Your a classy bunch. I would have expected nothing less. By the way all my posts are (Insider) the others are from your other admirers.
    By: Anonymous on 5/15/08
    insider my a_ _ you gay little wimp you were never man enough to be inside her that why you've shacked up with MR RICK. Your a joke, most of the time the real joke is in your hand. Your a pathetic puke and as RIKKI knows YOU SUCK
    By: Anonymous on 5/15/08
    Insidehim (insider)…I cant believe you went back with rick . after all these years. .you have let me down.and your family.I stood behind you when you got having that affair'when you were broke.slamming.people on this website is foolish.you gave up your beautiful wife for rick.behind closed doors.you guys are sick sick sick sick………………………………………………………………………………………………………………………………………………………………………………………………………………………
    By: Anonymous on 5/15/08
    to the Gearhart Gang

    LOL in Atascadero. Its great to be this effective at getting under your skin. Thanks for the good times.

    (0) 0 Total Votes - 0 up - 0 down
  3. ccn_debate says:

    By: Anonymous on 5/15/08
    INSIDER, So you finally found a forum to get even with Kelly G. you must have spent most of you life dreaming of an opportunity like this. Dreams do come true. you were always a freak and a loser and obviously still are and always will be.
    By: Anonymous on 5/15/08
    INSIDER don't give up all women for MR RICK or(rikki)as you like to call him. I can get you on my show " A SHOT AT LOVE WITH TIA TEQUILA (MTV) EVERYONE THAT COMES ON MY SHOW SWINGS BOTH WAYS ITS SO MUCH FUN. Anyway i'm really impressed with the way you manhandle all who disagree. YOU OWN THE GEARHART BLOGS your a real man after all
    By: Anonymous on 5/15/08
    to anonymous

    Not really. I'm probably all wrong about Kelly. I'm sure he's just a victom of circumstance. Perhaps if he had an audit of his buisness tranactions and loans this would all staighten itself out. My appologies.
    By: Anonymous on 5/15/08
    To Insider: Do you have a personal vendetta with Gearhart? Sounds to me like you've got issues that go beyond this subject.
    By: Anonymous on 5/15/08
    How do you cook Kelly Gearhart?
    Put him in a pot of luke warm water and slowly turn the heat up. Kelly thier cleaning your cell up right now.
    By: Anonymous on 5/15/08
    MR RICK and I urge all our follow bloggers to write the Governor and ask that he support the legislation making SAME SEX marriages legal. Since discovering each other we have both filed for divorce fom our wives of many years. Mr Rick I LOVE YOU xoxoxoxoxoxo
    By: Anonymous on 5/14/08
    me=Congalton???
    Ha, you fool. If you can read (not likely) you will notice I made a spelling error. Congalton is way too literate to make stupid mistakes. Of course maybe that was just a way to put off such clever sleuthing as you have done. You're an idiot, a blthering idiot. Go away.
    More proof, Dave would not sink to your infantile level and argue this point. Go away.
    By: Anonymous on 5/14/08
    HOTDOG = CONGALTON
    WORRIED ABOUT HIS FAILING BLOG! HAHAHAHA! IS THERE NO DEPTH THAT THIS CLOWN WON'T SINK?
    By: Anonymous on 5/14/08
    rolling_quarters, is it 088? Anyone e me with your numbers so we can put you in touch with others.
    rippedoffinvestor@yahoo.com

    By: Anonymous on 5/14/08
    I'm a lender in a project wherein Jay Miller and Gearhart are co-borrowers. Does this mean Jay will be filing a notice of default against himself?
    By: Anonymous on 5/14/08
    Better than a barrel of monkeys. A bunch of idiots with too much money deserved to be fleeced.
    By: Anonymous on 5/14/08
    Here come the idiots again.
    Blogger man, take your trash elsewhere. Send your junk to Rush, he'll appreciated it, we don't.
    This site is for thinking people trying to find a way out of the mess created by Hurst. Hurst has violated every decent tenet of brokerage responsibility, every aspect of the loan agreements and violated our trust. Its time to get some satisfaction, however that may come about.

    (0) 0 Total Votes - 0 up - 0 down
  4. ccn_debate says:

    By: Anonymous on 5/14/08
    HERE IS THE LINK FOR THOSE THAT DON'T KNOW TO CLICK MY NAME!

    http://pasorich.blogtownhall.com/default.aspx
    By: Anonymous on 5/14/08
    hERE IS A GREAT BLOG SITE! pLEASE CHECK IT OUT! ESPECIALLY THE "30 THINGS LIBERALS BELIVE".
    THE AUTHOR IS A THOUGHTFUL AND BRIGHT MAN AND WE THANK HIM FOR HIS SERVICE TO HIS COUNTRY!
    CLICK IT AND LEAVE A MESSAGE ABOUT WHAT YOU THINK!
    By: Anonymous on 5/14/08
    Now that would be some "news" that even the TT might snoop on. Arnold, Hurst, Gearhart … same address… Yes, $1000 was given by Kelly according to TT article on campaign. I can't confirm the address but perhaps somebody can.
    By: Anonymous on 5/14/08
    I that not the same building where Debbie Arnold has her campaign headquarters?

    I appears she is supported by Gearhart. Is she paying rent????

    Does Hurst Financial own the building?

    According to public record, Gearhart donated 1000 bucks.

    Any info from those in the know?

    By: Anonymous on 5/14/08
    I wonder which project (investors funds) paid for BHP's helicopter. He will probably have metal around his wrist and ankles. I'll keep the tin foil cap (since he's so sure we all have one), thank you very much.
    By: Anonymous on 5/14/08
    Texas Bound-

    You asked. The Oxford American Dictionary of Current English defines panic as "a sudden uncontrollable fear and alarm".

    If I woke up and all of my savings were stolen, I would be both afraid and alarmed. Act accordingly.
    By: Anonymous on 5/14/08
    Ok guys, let's define the word 'Panic', shall we? "Of the nature of or resulting from, sudden and infectious terror" "A sudden unreasonable, overpowering fear, especially when affecting a large number simultaneously". And you're advising investors to panic?

    As my mother always told me, "Be careful who's advice you take, the wrong kind can be deadly!"
    And by the way, break down the word 'assume'. We've all heard it. When you 'assume' but don't relly know, all it does is prove your ignorance.

    (0) 0 Total Votes - 0 up - 0 down
  5. ccn_debate says:

    By: Anonymous on 5/14/08
    Most of the bloggers here wear "hats of tinfoil" while they blog-away…of this I'm sure…specially Insider and Anonymous…
    By: Anonymous on 5/14/08
    SLO Bear,
    Thanks, we share common ground on the CENTRAL POINT, stated nicely by you as:

    "I agree that if you are going to panic, panic first. I think it is clear the time to panic is upon investors."

    AND,

    "I agree that Powell is on the right track – calm, cool, and relentless – that is how you take down financial bullies."

    Those two points are the ALL THAT MATTERS to investors at this stage of the game – getting to the well while there is still some water in it!

    I respectfully DISAGREE with the automatic assumption that no personal assets or insurance exists which investors can tap into. You may very well be correct, to make this assumption and TO NOT PURSUE ALL RECOVERY OPTIONS WOULD BE TERRIBLE MISTAKE.

    By: Anonymous on 5/14/08
    Mr. Rick-

    I agree that if you are going to panic, panic first. I think it is clear the time to panic is upon investors.

    You are incorrect about EPLI insurance – that is a plan to protect employers from employee suits (harassment, etc.). There may be some fraud coverage within a plan's general liability policy, but I would be shocked if they are carrying anything over $5 million.

    I also think you are making a HUGE assumption on personal assets. I doubt these folks have much in the way of net assets – they are leveraged and indebted to the hilt.

    I agree that Powell is on the right track – calm, cool, and relentless – that is how you take down financial bullies.
    By: Anonymous on 5/14/08
    Mr.Rick is indeed giving good advice.

    Hurst will have AT LEAST $10mil in EPLI insurance alone (which WILL pay for negligent and illegal acts), in addition to other required policies. Added to that will be personal umbrella policies anyone with assets to protect will carry. Any general contractor doing projects other than residential remodels will have AT LEAST $1mil in gen liabilty plus personal policies.

    IT ALL ADDS UP.

    ADD to that every penny of personal assets held individually.

    I am NOT saying there is definitely enough to cover every investor's loss, but the first to the well will be the first drink and recover their losses.

    POWELL HAS IT NAILED.

    Mr.REALITY / Gearhart is here to cry poormouth and threaten countersuits to any plaintiff: Take that for what it is – A TRANSPARENT ADDMISSION THAT THIS IS THE LAST THING THEY WANT YOU TO DO.

    POWELL AND OTHER EARLY FILERS WILL GET PAID WHILE THOSE LATE TO THE COURTHOUSE WILL BE LEFT WITH WORTHLESS JUDGEMENTS AND EMPTY PROMISES.

    (0) 0 Total Votes - 0 up - 0 down
  6. ccn_debate says:

    By: Anonymous on 5/14/08
    At last! Someone who has facts, and a head on their shoulders! Thank you Reality! So much of this blog is written by those that have no idea what they are saying, it's refreshing to read one that does! There is way too much heresay, assumption, (there's that word!), and just plan gossip/slander! You rock!
    By: Anonymous on 5/14/08
    to Cindy

    Fidelity insurance I assume your talking about title insurance which just confirms the status of liens on the property at the time of transfer. It would have nothing to do with the investors. There is no insurance that will protect the investors. The only insurance that may exist that will get involved in this is some kind of liability that hurst may have and it will only try and protect Hurst buy providing legal help.
    By: Anonymous on 5/14/08
    The building where Hurst and K.G. operate out of is not owned by K.G. he leases from Hurst
    By: Anonymous on 5/14/08
    The only type of insurance a Contractor/Developer is required to have is General liability which covers construction defects only. It can also cover his vehicles. You can still have a contractors license and operate a business without it but you may lose work as banks require it in order for you to be the G.C. on a loan their making. This insurance does not cover fraud or any other type of wrong doing unrelated to actual construction quality. This is expensive enough developers dont carry any other type of insurance other than workmans comp if nthey actually run a crew of employees.
    By: Anonymous on 5/13/08
    The building where Hurst exists went on the MLS today. I think Kelly is selling it.
    By: Anonymous on 5/13/08
    To Insider,
    Your forgetting about "Fidelity Insurance". Most brokers and developers(with banl loans) are required to carry it.
    By: Anonymous on 5/13/08
    MR RICK is giving foolish advise, not all Hurst borrowers are ripping people off, many have lost their own hard earned assets (earned through hard work before ever doing business with Hurst)trying to finish projects that were partially funded by Hurst. Anyone that goes off half cocked sueing any or all Hurst borrower alleging fraud or any other wrong doing is going to be sued back. You better be sure of what your talking about.
    By: Anonymous on 5/13/08
    Don't you find it interesting that Hurst and Gearhart share (walled separation) a common office building. They stand in the parking lot to discuss their plans.
    By: Anonymous on 5/13/08
    Don't Congalton! he will drag you into his pit of radical socialism!
    Stay on your own! get your own radio show!
    By: Anonymous on 5/13/08
    Insurest? Yeah I got insurest, and them scumbums is gonna have to PONY UP to the max.

    First come first served.

    After that you'll have ta spend yer days and nights inna easter egg hunt for every account, plane, car, and gold bar you think you can seeze.

    Better ya'll just take pennies on the dolla and reinvest in my next can't-miss deal. Ya'll be drinkin' that free Bubble Up and eatin' that rainbow stew.

    I gauran dam tee it!

    Now get yer facts straight golldamit and I'm not talkin' to no rock suckers what don't give their full name, address and social security number.

    (0) 0 Total Votes - 0 up - 0 down
  7. ccn_debate says:

    By: Anonymous on 5/13/08
    Very soon the blank will hit the fan and its going to be messy for all.
    By: Anonymous on 5/13/08
    Insurance we got no stinkin insurance. If Kelly has any general liablility or fire insurance which he should have been required to show proof of it would be on a project by project basis and would be for fire, vandalism ,construction defect or some kind of liability like a trip and fall. I'd be suprised if either of them had anything in the liability area of over 1 million and it most certainlly does not cover fraud. You can't get insurance that covers criminal acts of your own making.
    By: Anonymous on 5/13/08
    Ah yes … things tend to deteriorate quickly when the principal players start turning on each other. Grab some popcorn, this should get interesting.

    As for business liability insurance, most businesses are under-insured. I would doubt Hurst has more than $5 million in coverage – that won't even come close to covering Vista del Hombre alone. I have to believe the money is spent – and its not coming back.
    By: Anonymous on 5/13/08
    apparrently Husts doesn't have a high enough paid attorney. This guy is telling Jay what he should do. Karen on the other hand tells her attorneys what she wants to do and its up to them to justify it. Now thats a real High Roller.
    By: Anonymous on 5/13/08
    Hurst investors are in a much better position to recover in court because of the blatant violations of contractual and regulatory obligations.

    File suit against Hurst and personally against all of it's involved employees, and also against the "borrowing" entities and against all of their involved employees/members.

    THEY WILL LIKELY ALL HAVE INSURANCE COMPANIES WITH DEEP POCKETS WHO WILL COUGH UP YOUR LOSSES PLUS LEGAL EXPENSES.

    After that, it will be up to the insurance companies to battle it out with their criminal clients.

    POWELL HAS IT NAILED: FILE SUIT AND DO NOT BACK DOWN.
    By: Anonymous on 5/13/08
    Karen will be back on my show tonight at 5:05 (Tuesday) to discuss and respond to your phone calls.
    By: Anonymous on 5/13/08
    Dan & Karen? Do you have any idea when the district attorney will get involved in this scam?
    Would love to see what you ahve on that topic!
    Thanks!
    By: Anonymous on 5/13/08
    Hurst is royaly f*cked and they have no way out. They admit that they have violated the terms of their contractual obligations with their investors and consequently their legal responsibilities as a regulated entity.

    They are simply toast, and they know it.

    By: Anonymous on 5/13/08
    Sell my assets my ass. Get your facts straight! You pilgrims already paid for em', now all I gotta do is cash you out for pennies on the dolla.

    It's called a "work out" sonny boy, now go suck rocks.

    Offshore accounts, private aircraft, IT ALL ADDS UP BUBBA.

    I got me $27mil for that Vister Del Mombray but you boys is gonna have to accept maybe eight or nine hunnert kay for it.

    Times is tough with the housing bubble and that new breakfast cereal Credit Crunch and all that stuff.

    It's all in the papers. Get your facts straight!

    (0) 0 Total Votes - 0 up - 0 down
  8. ccn_debate says:

    By: Anonymous on 5/13/08
    I predict Kelly and Jay will be going after each other like two rats in a cage. The only reason anyone puts up with Gearhart is because of the money they make off him. Hurst certainly fell into that catagory. I don't think anyone will be making much money off Gearhart from this point on. In fact most will see him as someone just sucking them dry. Gearhart showed on the radio he will throw Hurst under the bus in a heartbeat. With no commissions comming from any new Gearhart deals and nothing but grief comming from the investors it looks like any affection for Gearhart by Jay Miller may be waining. Only his realtor remains with any chance to make money in this deal as Kelly is forced to sell his assets.
    By: Anonymous on 5/13/08
    Yer just gonna have to accept pennies on the dolla, pilgrims.

    It's called a "work out". You "work" for your money and I take it "out" of your pockets. Understand?

    Besides, my cost of doin' bidness is sky high: Trips to Vegas and Europe, luxery cars, homes, private aircraft, etc.

    IT ALL ADDS UP GOLLDAMIT.

    I gauran dam tee it.

    And I aint eskeered of no eff bee freakin' eye. Let'em go suck rocks. This aint my first rodeo, cowgirls, and I'm still ridin' high and tight!
    By: Anonymous on 5/13/08
    Want to join up with other investors seeking solutions?
    Send info to rippedoffinvestor@yahoo.com.
    By: Anonymous on 5/12/08
    Thanks for the millions, suckers. Mighty white of ya. Things didn't go your way this time, but if you take pennies on the dolla and roll into my next can't miss deal, yer gonna be drinkin' that free Bubble Up and eatin' that rainbow stew.

    I gauran damn tee it!

    If you feel stung, just remember: STUPID SHOULD HURT!

    HAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!
    By: Anonymous on 5/12/08
    Next step: Miller presents "work out" proposals to investros offering 50 cents on the dollar settlements and he will recommend acceptance.

    Nice work if you can get it!
    By: Anonymous on 5/12/08
    All mail I have received from Kelly Gearhart have been delivered in a Hurst posted envelope.Now that postal rates have gone up I gather they may be splitting the blanket unless they invested our money in Forever Stamps. They are going to need them, we will not go away!
    By: Anonymous on 5/12/08
    At lease Miller has the sense to communicate with the investors at this point. Ms. Arrogant, no, I take that back. Ms. Sociopath can't be bothered.
    By: Anonymous on 5/12/08
    Show me the money?

    (0) 0 Total Votes - 0 up - 0 down

Comments are closed.