EFI evaluator seeking quality investor information
June 24, 2008
By DANIEL BLACKBURN and KAREN VELIE
A Fresno attorney appointed earlier this month to widen the examination of troubled lender Estate Financial Inc. (EFI) is enlisting the help of UncoveredSLO.com’s readers.
Independent evaluator Hanno Powell, an attorney with the firm of Powell and Pool, posted two messages June 21 on this Web site, seeking help from investors with specific knowledge of questionable activities by EFI personnel.
Powell has a little more than 30 days to present San Luis Obispo County Superior Court Judge Barry T. LaBarbera an evaluation of EFI’s books. Some investors had asked the judge to appoint a receiver to manage the fund’s assets. The judge said he wanted an independent evaluation before he would render any decision.
The Paso Robles firm has been the target recently of multiple lawsuits and a battery of complaints from worried investors. The company has stopped making interest payments and is struggling to stay afloat in a crashing real estate market.
“I recognize that my request of this blog is unorthodox,” Powell wrote, “but given the limited time and budget I will use all means at my disposal to gather the needed information.”
Specifically, the evaluator said he is looking for “information on specific loans; investors in the fund; past employees, agents or officers of EFI; any known or suspected incidents of fraud, misrepresentation, or malfeasance regarding EFI.”
Powell said, “By reaching out through your site I am asking people to show me. I appreciate that they are upset. Show me what it is that you are upset about. Was there some misrepresentation made? Tell me what it was, so I can filter it all out.”
The attorney said he was “reaching out to new technology as a way to speed up the process. How can I get my message out to 1,600 investors in a short time?”
LaBarbera also allowed only $10,000 to cover the attorney’s work. Other attorneys contacted by UncoveredSLO.com said the kind of project assigned to Powell would generally be worth at least $10,000 a week, and should require significantly more time. There will be no time for a forensic accountant to examine EFI’s books under the current schedule. “And I think that’s what the investors want,” he added.
Powell said earlier this week that he has already gotten more than three dozen e-mails from investors who saw his message on this site.
“We don’t have the luxury of time,” he said. “And the judge is saying, ‘I need to hear more information.’” LaBarbera has scheduled a hearing for July 22 and 23.
Powell said he wasn’t surprised that the judge chose to appoint an evaluator rather than a receiver.
“To do something as extreme as ousting the management of such a large fund without a full hearing of both sides you better have a smoking gun in hand,” he said. “The judge is looking for enough information, some evidence, that would be compelling enough to appoint a receiver.”
Powell noted that he already has met with EFI principals Karen Guth, Josh Yaguda, and the company’s accountant.
“I made it very clear to them that I am independent,” he said. “I am not on a witch hunt.”
Powell can be reached at firstname.lastname@example.org.
Tags:, EFI, Estate Financial