November 5, 2024

At the October 11, 2024 status conference, counsel for DFPI reported that the criminal case against Maney and the others is ongoing.  The Court continued the stay of the civil case and set the next status conference for April 11, 2025.  We understand the investors’ frustration at the continued delay; however, during this time the Receiver completed the sale of the largest of the remaining assets of the receivership estate – the Galileo Project Land.  All that remains to liquidate is 72 acres of vacant land in California City, California.  The Receiver hopes to be ready to move quickly when the civil case resumes to get approval from the Court to make the final distribution to investors.

If you were an investor, please notify our office if your mailing address has changed.

June 14, 2024

At the April 5, 2024 status conference, counsel for DFPI reported that the criminal case against Maney and the others is ongoing.  The Court continued the stay of the civil case and set the next status conference for October 2024.  We understand the investors’ frustration at the continued delay; however, during this time, the Receiver has been actively attempting to close the sale on one of the last remaining assets of the receivership estate – the Galileo Project Land.  Once that asset and a remaining parcel of vacant land are liquidated, the Receiver will be ready to move quickly when the civil case resumes to get approval from the Court to make the final distribution to investors.

If you were an investor, please notify our office if your mailing address has changed.

September 15, 2023 – Status Conference Hearing

The court held a status conference on September 15, 2023.  Counsel for DFPI reported that the criminal case remains pending, and a preliminary hearing setting conference in that case is scheduled for February 20, 2024.  After hearing from counsel, the Court continued the stay of the civil case and set a status conference for April 2024.

March 29, 2023 – Receivership Case Remains Stayed

As previously reported, the receivership case was stayed (put on hold) on August 11, 2022 as the result of a request by Defendant Maney.  Mr. Maney and a number of others are facing criminal charges in connection with Silver Saddle.  On March 16, 2023, the Superior Court in the receivership case held a status conference to discuss the status of the criminal proceeding.  The criminal case continues and, as a result, the Court has extended the stay in the receivership case until at least the next status conference which it scheduled for September 15, 2023.  Given the stay, we do not expect any material activity to occur prior to the resolution of the criminal prosecution.  We will update again after September 15, 2023 status hearing or before if events merit.

August 26, 2022 – Receivership Case Stayed

As we said previously, Defendant Thomas Maney and others were criminally charged based on conduct that is essentially the same as in this case.  In July, Mr. Maney asked the Court to “stay” this case, which would put the case on hold, until the criminal case is finished.  The Court granted Mr. Maney’s request on August 11, 2022, which means the trial in this case will no longer occur in September as previously scheduled.  The Court said that the Receiver can continue to collect funds for the Receivership Estate, but the stay may affect the timing of a distribution to investors.

If you were an investor, please continue to keep the Receiver’s office apprised of any address changes.  When emailing our office, please include your unit number to allow us to locate your records quickly.

June 10, 2022 – Criminal Charges Filed

On May 25, 2022, the California Attorney General’s Office filed criminal charges against a number of people in connection with the Silver Saddle Commercial Development-Galileo Project.  The criminal complaint is available in the documents section of this webpage.  The criminal action by the Attorney General is separate and independent from this case.

We do not anticipate that the criminal case will affect this case or the receivership.  The trial date in this case remains the same, September 16, 2022.  We will provide an update if the trial date changes.

May 3, 2022 – Final Determination of Investor Claims

We have reached a Final Determination of Claims, which can be accessed through this link – Final Determination of Claims or found in the documents section of this webpage.  The list is sorted by investor account number, which number was included in the Preliminary Claim Determination letters that were mailed to each investor.  The last 5 digits of the account number represent the investor’s unit number.

Important

As we have noted repeatedly, calculating the Final Claim Determination amounts does NOT mean investors will receive those amounts.  Because the Silver Saddle Ranch & Club and the Galileo Project land are worth far less than the investors paid into the Galileo Project, no investor will be returned all of the money he or she invested.  Instead, each investor will receive a share of the proceeds proportionate to his or her investment in the Galileo Project (a “pro rata share”).  See March 7, 2022 post below for further information and details.  The Final Determination of Investor Claims will be used to calculate the pro rata share of any distribution ordered by the Court.

Background on the Process to Reach a Final Determination of Investor Claims

In March 2022, we sent out 2,970 letters to investors notifying them of the Receiver’s Preliminary Claim Determinations.  The letters explained how to challenge the Preliminary Determination if an investor felt the determination was incorrect.  We only received 43 challenges and examined each of these challenges carefully.  The results were as follows:  23 challenges were denied, 17 resulted in an adjustment to the claim determination amount, and 3 were accepted completely.  Each investor who submitted a challenge has been contacted by mail and email explaining the Receiver’s review and determination of their challenge.

Next Steps

The Court ordered that the Receiver cannot distribute any money to investors until the end of the case.  Right now, the case is set for trial in September 2022.  At the conclusion of the case, the Receiver will promptly move for permission to make a distribution.  At that time, the Receiver will also file a Notice of Final Determination of Claims with the Court.  Those investors who sent written challenges to the Receiver’s claims determinations and still disagree with the Receiver’s Final Determination may submit a written objection to the Court within fourteen (14) days of the Receiver’s filing of the Final Determination of Claims.

After 14 days, the Receiver will respond to any investor objections filed with the Court, so that the Court can evaluate the Receiver’s calculations.  Once the Court has resolved any investor objections, the Receiver will file a Proposed Order of Final Determination of Claims and First Interim Distribution.  Once the Court has approved and issued the Order of Final Determination of Claims and First Interim Distribution, the Receiver will make a first distribution.  Investor payments will be made by check.  Please notify us immediately if your mailing address has changed.

April 18, 2022 – Court Grants Motion to Approve Sale of Galileo Project Land

On April 15, 2022, the Court held a hearing on the Receiver’s Motion to Approve the Sale of the Galileo Project Land.  At the hearing, the Court approved the sale of the land for $900,000, with clear title and free of all liens and encumbrances.  The Court’s decision means that when the sale closes, the Silver Saddle investors will no longer have an interest in the Galileo Project Land.  Each investor will, however, receive a part of the proceeds from the sale proportionate to the money he or she paid for the property, as described in the recently distributed Claim Determination letters.  The sale is set to close in 60 days.

Prior to the hearing, the Court issued a tentative ruling approving the sale.  The Receiver has also submitted to the Court a proposed order approving the sale.

The Court will need to approve a distribution before the proceeds from the sale can be distributed to investors.  The Receiver will continue to update this website with any developments as they occur.

March 7, 2022 – Notice to Silver Saddle Investors of Claim Determinations

Claim Determination letters have gone out today to Silver Saddle investors who invested in the Galileo Project (sometimes called LandBanking Plus).  Investors should look for the letter in the U.S. mail.  If you are an investor and do not receive a letter by March 15, 2022, please contact the Receiver’s office at info@regulatoryresolutions.com.  As explained below, if you disagree with the Receiver’s determination you must contact the Receiver’s office by mail or email on or before April 8, 2022.

Background

Thomas Maney and the companies running these investments (the “Defendants”) were sued by the California Department of Financial Protection and Innovation (“DFPI”) in 2019.  Thomas W. McNamara was appointed as the Receiver in this case.  As the Receiver, it is Mr. McNamara’s job to identify, pursue, collect, and preserve the assets of the Receivership Estate while the lawsuit proceeds.  Trial is presently scheduled for May of this year.  If the DFPI is successful at trial or the parties reach a settlement, then the Receiver will seek permission from the Court to distribute the funds in the Receivership Estate to the Silver Saddle investors.  In order to move promptly when the case is resolved, we are providing notice to all investors of the Receiver’s claim determinations.

The Receiver’s goal is to maximize the amount of money that each of the Silver Saddle investors will receive from the Receivership Estate should the Court approve a distribution.  However, because the Silver Saddle Ranch & Club and the Galileo Project land are worth far less than the investors paid into the Galileo Project, no investor will be returned all of the money he or she invested.  Instead, each investor will receive a share of the proceeds proportionate to his or her investment in the Galileo Project (a “pro rata share”).  In other words, no investor will receive the full amount of his or her claim.

A simple example can help explain how this works.  Let’s assume Investor A invests $200, Investor B invests $500, and Investor C invests $300 for a total of $1,000 invested.  As a result, Investor A has a claim for $200, Investor B has a claim for $500, and Investor C has a claim for $300.   In other words, Investor A provided 20%, Investor B provided 50%, and Investor C provided 30% of the total investment.  And let’s assume the receivership has $100 to distribute to the investors.  Each investor will get a pro rata share of the distribution:  Investor A will receive $20 (20% of the distribution), Investor B will receive $50 (50% of the distribution) and Investor C will receive $30 (30% of the distribution).

How We Made Claim Determinations

We have reviewed records from Equiant and Silver Saddle which detail the investor payments recorded by the Defendants.  We then calculated each investor’s total claim by adding (1) the amount he or she paid toward the purchase of an undivided fractional interest in the Galileo Project; and (2) the amount contributed to the Galileo Capital Investment Fund (“CIF”).  And the total claim will be used to determine the investor’s pro rata share of any distribution(s) ordered by the Court.

Investors’ Reviews of Claim Determinations

Every investor should carefully review the Receiver’s claim determination.  If you are an investor and you agree that the claim determination prepared by the Receiver is correct, you do not need to do anything.

If you think the Receiver’s claim determination is wrong, you have until April 8, 2022 to send the Receiver’s office a letter or email challenging the calculations.  At that time, you must provide copies (please do NOT send original documents) of all the information and documents supporting your challenge, for example bank statements and the front and back of cancelled checks.  You can either mail the information to:

Silver Saddle Receiver
c/o Regulatory Resolutions
655 W. Broadway, Suite 900
San Diego, CA 92101

Or send via email to info@regulatoryresolutions.com, with “Silver Saddle” in the subject line of the email.

Receiver’s Review of Challenges and Final Determination

The Receiver will review each challenge and supporting documentation and may need to contact investors directly during this process to ask follow-up questions.  Once final determinations are reached, every investor who made a challenge will be notified via mail and/or email and by posting notice on the receivership website of the final outcome.

Receiver’s Notice of Final Claim Determinations and Proposed Distribution

After the Receiver reaches final determinations on all claims, a Notice of Final Determination and Proposed Distribution will be filed with the Court.  Notice of this filing will be provided to investors by email and via posting on the receivership website.

Timeline for Court Challenge to Receiver’s Confirmation of Claim Determination

Any investor who challenged the claim determination and disagrees with the Receiver’s final determination may submit an objection to the Court within 14 days of the filing of the Receiver’s Notice of Final Claim Determination and Proposed Distribution.  The Receiver will reply to any objections and the Court will rule.  After the Court does so, the Receiver will submit a proposed Order to the Court consistent with the ruling.

If no objections are filed with the Court, the Receiver will promptly file a proposed Order approving the Receiver’s claim determinations.

Distribution

If and when the Court enters an Order allowing a distribution to investors, the Receiver will issue investor checks promptly and consistent with the claims determinations.  Investors will have 90 days to cash the checks.

If you believe the email or mail address the Receiver has for you is incorrect, you should immediately provide the correct address(es) to the Receiver by sending an email to: info@regulatoryresolutions.com, with “Silver Saddle” in the subject line of the email.

March 9, 2022 – Motion to Approve Sale of Galileo Project Land Filed

On March 4, 2022, the Receiver filed a Motion to Approve the Sale of the Galileo Project Land.

At the same time the Receiver accepted an offer to purchase the Silver Saddle Ranch, he accepted an offer to purchase the Galileo Project Land.  Both purchases needed to be approved by the Court before they could proceed.  The sale of the Ranch was approved in late 2020.  The sale of the Galileo Project Land, however, was put on hold.  With the trial date approaching, the Receiver intends to proceed with the sale of the Galileo Project Land for $900,000 to the same individual who purchased the Ranch.  Based on an independent appraisal prepared for the Galileo Project Land, the Receiver believes the price is more than fair and reasonable.

The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors.  Importantly, the Receiver intends to request the Court authorize that the Galileo Project vacant land be conveyed with a clear title and free of the Galileo Project investors’ fractional interests.  This would mean that after the sale, the investors would no longer have an interest in the Galileo Project Land.  Each investor would receive a part of the proceeds from the sale proportionate to the money he or she paid for the property.

We will seek the Court’s approval of the sale at a hearing on April 15, 2022, at 9:00 a.m., at the San Diego Superior Court, Hall of Justice, Department C-73.  If the motion is granted, the closing should occur 60 days thereafter.

The relevant documents can be accessed at the links below or by clicking on the documents to the right.

January 14, 2022

Last year, the Receiver sought the Court’s permission to approve the sale of land owned by Receivership Defendant High Plains Mesa Holdings, LP, for $4,100,000.  The sale closed but in August 2021, the owners of High Plains Mesa Holdings appealed the sale and filed a bankruptcy petition on the company’s behalf without the Receiver’s permission.  The Receiver hired counsel for both matters.  The bankruptcy petitions and appeal were ultimately dismissed, allowing the Receiver to take control over the roughly $4,100,000 in sale proceeds.

Separately, the Receiver sought the Court’s permission to list for sale two other, smaller properties owned by Receivership Defendant High Plains Mesa Holdings.  On January 14, 2022, the Court granted the Receiver’s request.  The Receiver will proceed with hiring a realtor and proceeding with listing and marketing the properties.

Finally, last year, the parties filed a Joint Stipulation to Continue the trial and related dates and deadlines to allow them to address discovery and potential settlement issues, which the Court granted on October 22, 2021.  The new trial date is May 6, 2022.

More information on these matters is available in the Receiver’s Fifth Interim Status Report (filed September 16, 2021) and the Receiver’s Sixth Interim Status Report (filed January 13, 2022).

August 31, 2021

In February of this year, the Court, after briefing and argument, confirmed that two other companies, High Plains Mesa Holdings, LP and High Plains Mesa Management, LLC, were part of the receivership estate.  One of these companies, High Plains Mesa Holdings, had a lease option agreement in place to sell a 640-acre parcel of land to a solar energy company for roughly $4,100,000 before this lawsuit was filed.

On May 13, 2021, the Receiver asked the Court for permission to proceed with the sale of the land to the solar energy company.  The Court granted the Receiver’s request on June 11, 2021.  Although the sale closed as scheduled, High Plains Mesa Holdings filed a Notice of Appeal of the Court’s Order authorizing the sale.  The day after filing the Notice of Appeal, High Plains Mesa Holdings and High Plains Mesa Management filed for bankruptcy.  The Receiver has retained counsel to address both the appeal and the bankruptcies.

As we have stated on this webpage, and in our emails to investors, any distributions to investors will only take place after the conclusion of the case.  The case remains pending in San Diego County Superior Court, with a current trial date of January 21, 2022.

March 23, 2021 – Motion to Approve Distribution Method and Procedures

As you may be aware, the Court approved the sale of the Silver Saddle Ranch and Club (“Ranch”) for $2,100,000.  The Receiver intended to use the money from the sale to pay the expenses of the Receivership Estate and provide a first distribution of funds to Silver Saddle investors to begin compensating them for their losses.  Accordingly, he filed a Motion for Approval of Proposed Distribution Method and Procedures with the Court asking for permission to make a first distribution.

On March 19, the Court heard oral argument on the Receiver’s Motion and denied the Receiver’s request to proceed with an interim distribution to investors.  The Court ordered that the Receiver cannot distribute any money to investors until the conclusion of the case.  However, the Court did ultimately approve the Receiver’s proposed method and procedures for a distribution.  This means that the Receiver can start calculating investors’ losses so that, if and when a distribution is ordered, the Receiver can begin sending money to investors right away.

We are preparing a proposed order for the Court and will post it on the Receiver’s website when the judge approves.  We will provide a further update at that time.

February 8, 2021 – A Global Email was Sent to Investors Today Explaining the Receiver has Filed a Motion to Approve the Method and Procedures for a Distribution to Investors

Sale of the Silver Saddle Ranch and Club (“Ranch”)

In our last update, we explained the Receiver had filed a motion with the Court to approve the sale of the Ranch to a third party for $2,100,000.  The Court approved the sale on November 6, 2020, and the sale closed on January 14, 2021.  The Receiver will use proceeds from the sale to pay expenses of the Receivership Estate and provide a first distribution to Silver Saddle investors.

Motion to Approve Distribution Method and Procedures filed – Telephonic Hearing on March 19, 2021 at 9:00 a.m.

Before the Receiver can distribute funds to investors, the Court must approve a distribution process.  To that end, on February 8, 2021, the Receiver filed a Motion to Approve Distribution Method and Procedures (“Motion”).  The Motion is posted in full in the Documents section of this webpage.  The Motion details the proposed distribution process.

The Court will hear the Motion in a telephonic hearing on March 19 at 9:00 a.m.  If the Motion is granted, the Receiver will be able to start the distribution process.

Pro Rata Distribution

Please understand that the Receivership Estate has very limited assets – primarily the proceeds from the sale of the Ranch and the anticipated funds from the sale of the Galileo parcel (if approved by the Court).  As a result, investors will NOT receive back the full amount they invested from the Receivership Estate.  The Receiver has therefore proposed to the Court that “pro rata” distributions be made to each investor based on the amount each investor paid into the Galileo Project and Common Improvement Fund.  This will involve (1) calculating each investor’s claim and then (2) dividing this by the aggregate amount of all investor claims to get a pro rata figure which (3) will be multiplied by the amount available for distribution.

For example, assume that Investor A’s claim is $30,000, Investor B’s claim is $50,000, and aggregate investor claims of $1,000,000.  In that scenario, Investor A’s pro rata share is 3% and Investor B’s pro rata share is 5%.  If $100,000 is distributed, then Investor A would get $3,000 and Investor B would get $5,000.

If you have questions after reading the Motion, please send them to info@regulatoryresolutions.com and include “Silver Saddle” in the subject line.

Status of the Galileo Land Sales Efforts

As the Receiver mentioned in his last update, the same proposed buyer who offered $2,100,000 for the Ranch also offered $900,000 for the Galileo Project vacant land.  Based upon an independent appraisal prepared for the Galileo Project land, the Receiver believes this offer is fair, reasonable, and at or above market value for the property.  As such, the Receiver accepted the offer and will soon seek Court authority to sell the Galileo Project land.

The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors.  Importantly, the Receiver intends to request the Court authorize that the Galileo Project vacant land be conveyed with a clear title and free of the Galileo Project investors’ fractional interests.  Should the Court order the sale to go forward, the Receiver intends to recommend to the Court that the sale proceeds be used to fund an additional investor distribution.

Please continue to check the Receiver’s website for periodic updates.

November 10, 2020

On November 6, 2020, the Court held a hearing on the Receiver’s Motion to Approve Sale of the Silver Saddle Ranch and Club.

The Motion was opposed by Defendant Accelerated Assets and Defendant Thomas Maney.  Accelerated Assets wanted to postpone any sale of the Ranch so that the Ranch can be used as part of settlement negotiations it wishes to have with the Department of Financial Protection and Innovation.  Maney opposed the sale because he wants to propose a joint venture in which the Ranch is included in an agreement between the investors and a third party, Rick Jones.

The Court took into account the Receiver’s concerns and recommendations, as well as those of the other interested parties.  After hearing argument, the Court granted the Receiver’s Motion and approved the sale of the Ranch.  The Court determined that the Receiver had shown it was necessary to sell the Ranch, given the ongoing maintenance costs and the limited funds remaining to pay them.  The Court also determined that the Receiver had shown the current offer was fair and reasonable.

The minute order granting the Receiver’s motion is in the documents section of this webpage.

October 14, 2020 – Motion to Approve Sale of the Silver Saddle Ranch and Club Filed and Telephonic Hearing Set for November 6, 2020 at 9:00 a.m.

On October 13, 2020, the Receiver filed a Motion to Approve the Sale of the Silver Saddle Ranch and Club (“Ranch”) for $2,100,000.  The Receiver has been marketing the Ranch through a real estate broker for sale since May.  On September 28, the Receiver agreed to a sales price of $2,100,000 for the Ranch.  Based on an independent appraisal prepared for the Ranch, the Receiver believes the price is more than fair and reasonable.  Escrow was opened on September 29, and the proposed buyer has 21 days to clear contingencies.  We will seek the Court’s approval of the sale at a telephonic hearing on November 6 at 9:00 a.m. via CourtCall and, if granted, the closing should occur 60 days thereafter.

As we have previously noted, the Galileo Project investors do NOT hold an interest in the Ranch property.  We have received emails and letters from a small number of investors (who appear to be coordinating with Antonio Garcia and Carlos Novelo, and their United Owner Investors, Inc.) objecting to the sale of the Ranch.  While we have carefully considered the concerns raised by these investors, they do not have legal standing to object to the sale of the Ranch.  Nevertheless, the Receiver intends to recommend to the Court that the funds from the sale of the Ranch be used to make an initial distribution to Galileo Project investors.

Moving forward with a sale is essential because, as we have previously reported the costs to maintain Ranch are draining the limited resources of the Receivership Estate.  These expenses include water, electricity, labor, and insurance costs.  For example, to date the Receiver has paid $285,580 for water alone.  The highest water bill was $46,864 for mid-October 2019 to mid-November 2019.  The lowest water bill was $4,339 for mid-March 2020 to mid-April 2020.  On September 29, 2020, California City approved the Ranch for a lower water rate, which should result in lower water bills.  Even with the reduced water rates, we expect water will continue to be a substantial expense and all other expenses will continue – e.g., electricity, labor, and insurance.  The Receivership Estate will not be able to fund these costs for very long.

The Motion to Approve the Sale of the Ranch and related documents are in the Documents section of this webpage.

Status of the Galileo Land Sales Efforts

The same proposed buyer who offered $2,100,000 also offered $900,000 for the Galileo Project vacant land, which has been marketed through a real estate broker for sale since August.  Based upon an independent appraisal prepared for the Galileo Project land, the Receiver believes this offer is fair, reasonable, and at or above market value for the property.  As such, the Receiver accepted the offer and intends to seek Court authority to sell the Galileo Project land.  The Receiver will file a motion for the Galileo Project land after the sale of the Ranch is complete.  The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo Project investors.  Importantly, the Receiver intends to request the Court authorize that the Galileo Project vacant land be conveyed with a clear title and free of the Galileo Project investors’ fractional interests.  Should the Court order the sale to go forward, the Receiver intends to recommend to the Court that the sale proceeds be used to fund an investor distribution.

September 24, 2020 – Ranch and Galileo Project Property Update

The deadline for bids on the Ranch and the Galileo Project properties was September 14, 2020 at 10:00 a.m.  Unfortunately, the Receiver did not receive acceptable offers before the deadline.  As a result, the properties continue to be marketed and listed through our real estate broker.   The Ranch is listed for $1,874,500.  The listing is available here: https://www.loopnet.com/Listing/20751-Aristotle-Dr-California-City-CA/19775266/.  The Galileo Project property is listed for $919,746.  The listing is available here: https://www.loopnet.com/Listing/Rutgers-Rd-Kennedy-Blvd-California-City-CA/20743529/.  The current sales brochure for the Ranch and the Galileo Project can be found in the Documents section of this webpage.

We continue to receive inquiries and entertain offers for the properties. Upon receipt of an acceptable offer(s), the Receiver will then bring the issue before the Court

August 27, 2020 – Ranch and Galileo Project Property Update

The escrows for the Ranch and Galileo Project property have been cancelled.  The prospective purchaser agreed to cancel the escrows, thus eliminating the need for the Receiver’s motion and the hearing on the matter.  There will not be a hearing on August 27, 2020 to cancel the escrows.

Both the Ranch and the Galileo Project property are listed for sale.  The Ranch has been listed for $1,874,500.  The listing is available here: https://www.loopnet.com/Listing/20751-Aristotle-Dr-California-City-CA/19775266/.  Bids for the Ranch are due on September 14, 2020 by 10:00 a.m.  The Galileo Project property has been listed for $919,746.  The listing is available here: https://www.loopnet.com/Listing/Rutgers-Rd-Kennedy-Blvd-California-City-CA/20743529/.  The current sales brochure for the Ranch and the Galileo Project can be found in the Documents section of this webpage.

August 17, 2020 – Postponement of Receiver’s Motion to Cancel Escrows

The Court denied the Receiver’s ex parte application for an order cancelling escrows for the Ranch and Galileo parcels, and stated that it was not inclined to rule on the request via ex parte application.  Instead Judge Wohlfeil treated the ex parte application as an application for order shortening time, which he granted.  A telephonic hearing has been set for August 27, 2020 at 9:00 a.m. to allow for full briefing on the matter.  We will provide an update after the August 27 hearing.

Motion to Intervene Denied

On July 24, 2020, Judge Wohlfeil denied the Motion to Intervene filed by Antonio Garcia and Carlos Novelo.  In part, the ruling states that, “[t]he prospective intervenors, like all investors, will be afforded an opportunity to be heard regarding the disposition of the receivership estate through the Receiver’s notice and recommendations to the Court.  Also, inclusion of the prospective intervenors as parties would enlarge the issues in the case because many of the approximately 3,000 investors have disparate opinions regarding disposition of the receivership estate.”  A full copy of the Court’s Minute Order is available in the Documents section of this webpage.

August 5, 2020 – Cancellation of August 19 Hearing on Receiver’s Motion to Approve Sale of Silver Saddle Ranch and Club

The hearing originally set for August 19, 2020 on the Receiver’s motion to approve the sale of real property owned by Silver Saddle Ranch & Club, Inc. has been taken off calendar.  Instead, on August 5, 2020, the Receiver filed an ex parte application for an order cancelling escrows for Silver Saddle Ranch and the Galileo parcels, which will be heard telephonically via CourtCall on August 11, 2020 at 8:30 a.m.  All responses and oppositions to the Receiver’s ex parte application must be filed with the Court prior to the hearing.

The reason the Receiver took the motion to approve the sale off calendar is that shortly after the Receiver accepted an offer to purchase the Ranch, another individual, who had also presented an offer, complained about the sales process and his interaction with the real estate broker.  The individual expressed a concern that he did not have a full and fair opportunity to pursue an offer which he provided to the broker.  The Receiver determined that it is necessary to reopen the sales process and allow all interested parties to present their best and final offers.  This will ensure the sales process is healthy and will maximize the sales price, which is in the best interest of the Receivership Estate.  However, before this can occur, the current escrows must be canceled.

If the Court grants the motion to cancel the escrows, the Receiver intends to reopen the sales process and all interested parties will have an opportunity to submit their best and final offer for the Ranch real property directly to the Receiver.  All the parties will be provided certain due diligence materials (e.g., preliminary title report, seller disclosures, etc.) and given another opportunity to tour the property.  After completing this process, the Receiver will select the best offer and submit it to the Court for consideration.

For additional details on the sale of the Ranch, please see below.

July 17, 2020 – Results of Hearing on Receiver’s Ex Parte Application

On July 16, 2020, the Court held a hearing on the Receiver’s Ex Parte Application to Shorten Time for a Hearing on the Receiver’s Motion to Approve the Sale of Silver Saddle Ranch and Club.  The Court has rescheduled the hearing on the Receiver’s Motion from August 28, 2020 to August 19, 2020 at 1:30 p.m.  All responses and oppositions to the Receiver’s Motion must be filed with the Court by August 6, 2020.  For additional details on the sale of the Ranch, please see below.

July 10, 2020 – Offer to Purchase Silver Saddle Ranch and Club

As we previously reported, even though operating expenses have been reduced, maintaining the Silver Saddle Ranch and Club (“Ranch”) continues to drain the limited resources of the Receivership Estate.  For the five-month period of September 2019 to March 2020, water, electricity, labor, and insurance costs for the Ranch was approximately $230,000.  Because of these ongoing costs, we determined selling the Ranch is in the best interest of the Receivership Estate.  A sale will eliminate substantial ongoing expenses.

To be clear, the Galileo Project investors do NOT hold an interest in the Ranch property; the Ranch is owned by Receivership Defendant Silver Saddle Ranch & Club, Inc.  Nevertheless, the Receiver intends to recommend to the Court that the funds from the sale of the Ranch be used to make an initial distribution to Galileo Project investors.

The Receiver selected Kidder Mathews as the real estate brokers to market the Ranch property, and the listing went active on May 8, 2020.  Of the four purchase offers presented for the Ranch, the Receiver has accepted an offer of $1,774,500.  The Receiver intends to seek Court permission to proceed with the sale.  While we have heard from a number of Galileo Investors (who are coordinating with Antonio Garcia and Carlos Novelo, and their United Owner Investors, Inc.) objecting to the sale of the Ranch, the investors do NOT hold an interest in the Ranch property.  As such, while we have carefully considered the concerns raised by these investors, they do not have legal standing to object to the sale.  The sale has been structured to allow the buyer 30 days to clear contingencies for the Ranch property and closing will be 60 days after the Court approves the sale.  Escrow was opened on July 2, 2020.

The Receiver has filed a Motion to Approve the Sale of the Ranch and an Application to Shorten the Time for a Hearing, asking the Court to hear the Receiver’s Motion to Approve the Sale of the Ranch on July 16, 2020 at 8:30 a.m. via CourtCall.  Any response must be filed before the hearing.  Copies of the Receiver’s Motion to Approve the Sale of the Ranch and Application to Shorten Time are available in the documents section of this webpage.

Offer to Purchase Galileo Project Land

We have also accepted an offer to purchase the Galileo Project vacant land for $775,500.  Based upon an independent appraisal received on the Galileo Project land, the Receiver believes this offer is fair, reasonable and at market value for the property.  As such, the Receiver intends to seek Court authority to sell the Galileo Project land.  The Receiver will file a motion for the Galileo Project land after the sale of the Ranch is complete.  The Galileo Project land is presently encumbered by roughly 1,700 fractional interests provided to the Galileo investors.  Importantly, the Receiver intends to request the Court authorize that the Galileo lands be conveyed with a clear title and free of the Galileo investors’ fractional interests.  Should the Court order the sale to go forward, the Receiver intends to recommend to the Court that the sale proceeds be used to fund an investor distribution.

Motion to Intervene

The Receiver also filed a Response to the Motion to Intervene filed by Antonio Garcia and Carlos Novelo.  A copy is available the documents section of this webpage.

June 11, 2020

In May 2020, DBO filed an amended complaint, adding additional defendants, SS Purcho, LLC, Accelerated Assets, LLC, and Pahrump Valley Real Estate Co., LLC.  DBO also filed a motion for preliminary injunction to stop these additional corporate defendants from collecting money related to the Galileo Project.  The Court is currently scheduled to hear DBO’s motion for preliminary injunction on July 24, 2020 at 9:00 a.m.  DBO also added Kelly Maney, Maria Rosales, Robert Kvassay, and Richard Huebner as additional defendants.

On March 13, 2020, the Receiver filed the first status report.  In sum, the Receiver (1) completed the efforts to vacate the Burbank office and relocate the business records to the Ranch (which defendants had in process at the time of the TRO); (2) retained a former employee to be the full-time caretaker of the Ranch; (3) secured insurance for the Ranch; and (4) continued to minimize operating expenses at the Ranch.  A copy of the Receiver’s First Interim Status Report is posted in the Documents section of this webpage.

Even though operating expenses have been reduced, maintaining the Ranch continues to drain the limited resources of the Receivership Estate.  For the five-month period of September 2019 to March 2020, water, electricity, labor, and insurance costs for the Ranch was approximately $230,000.  Because of these ongoing costs, we have determined selling the Ranch is in the best interest of the Receivership Estate.  After obtaining an extensive appraisal, the Receiver’s team interviewed and selected a broker, Kidder Mathews, to sell the Ranch.  It is currently listed for $1,895,000.  A copy of the listing brochure is posted in the documents section.

While many individuals have requested refunds, whether refunds will be issued depends on the outcome of the case and will be an issue for the DBO and the Court to resolve.

January 17, 2020 – W-2s for Former Employees

The Receiver has received several inquiries concerning W-2s from former employees.  Insperity, the payroll provider, will issue W-2s to former employees by January 31, 2020 via either U.S. mail or electronic delivery.  If you opted out of electronic delivery, Insperity will mail the W-2 to your home address that was on file as of December 31, 2019.  If your mailing address has changed, please email your new address to info@regulatoryresolutions.com with the subject line “SILVER SADDLE – W-2 ADDRESS CHANGE.”  If you did not opt out of electronic delivery, you can access your W-2 through the Insperity Premier website.

October 16, 2019 – Preliminary Injunction, Asset Freeze, and Confirmation of Receiver Order Issued by San Diego Superior Court

At a hearing on October 16, 2019, the San Diego Superior Court issued a Preliminary Injunction with asset freeze and confirmed the appointment of the Receiver over the Receivership Defendants (Silver Saddle Commercial Development, LP; Silver Saddle Ranch & Club, Inc.; The Galileo Commercial Property Owners Association, Inc., as well as any other entity that has conducted any business related to Defendants’ offering and selling of the Galileo Project investment contracts).  A copy of the Preliminary Injunction is posted in the Documents section of this webpage.

Temporary Restraining Order and Appointment of a Receiver Issued by San Diego County Superior Court

On September 9, 2019, the California Commissioner of Business Oversight (“DBO”) filed an action against multiple parties involved in a real estate investment scheme which allegedly sold highly overpriced fractionalized interests in vacant desert land in rural Kern County, California.  On September 24, 2019, the San Diego Superior Court issued a Temporary Restraining Order (“TRO”) with asset freeze and appointment of a Receiver over the Receivership Defendants (Silver Saddle Commercial Development, LP; Silver Saddle Ranch & Club, Inc.; The Galileo Commercial Property Owners Association, Inc., as well as any other entity that has conducted any business related to Defendants’ offering and selling of the Galileo Project investment contracts).  Copies of the Complaint and the TRO are available in the documents section of this webpage.

The Defendants named in the Complaint are:

Silver Saddle Commercial Development, LP;
Silver Saddle Ranch & Club, Inc.;
The Galileo Commercial Property Owners Association, Inc.;
Thomas M. Maney; and

Relief Defendants named in the Complaint are:

Marian G. Ducreux;
Clifford J. Reynolds; and
Wayne A. Pedersen

The DBO alleges that Defendants’ sale of fractionalized interests in vacant desert land near California City, California violated California securities laws because such sales constituted the sale of unqualified or unregistered securities and were based on fraudulent and deceptive misrepresentations.  Each sale is alleged to be a separate violation.  Defendants specifically targeted investors from several ethnic communities, many of whom spoke little to no English.  Defendants comingled and diverted funds that had been promised to be set aside and preserved for the investors’ benefit, making it difficult to trace exactly how investor money was being spent.

The business operations in Burbank have been terminated.  The Silver Saddle Ranch in California City, California has been closed to the public and visitors.