Mortgage Fund ‘08
Pearson, Simon & Warshaw, LLP represents the liquidating trustee of
the Mortgage Fund ’08 (“MF ‘08”) Liquidating Trust
(the “Trust”). The Trust was established in February 2012
pursuant to the Chapter 11 plan approved by the United States Bankruptcy
Court for the Northern District of California. MF ’08 was a hard
money real estate lender that raised funds through the issuance of promissory
notes to investors. Between December 2007 and March 2009, MF ’08
raised over $80 million from investors.
As special litigation counsel for the trustee, PSW has brought lawsuits
against Wells Fargo Capital Finance, persons who received MF ’08
funds in violation of California fraudulent conveyance statutes and legal
professionals who represented MF ’08. The lawsuits generally allege
that from 2007 through September 2011 the managers of MF ’08 wrongfully
used monies raised from MF ’08 investors to keep other business
entities controlled by those managers from failing. The trustee alleges
that over $66 million of the over $80 million raised from MF ’08
investors was paid to the managers’ related business entities in
violation of MF ‘08’s restrictions on such transfers. Wells
Fargo is alleged to have aided and abetted the breach of fiduciary duty
owed by MF ‘08’s former managers to MF ’08. The legal
professionals are alleged to have also aided and abetted the MF ’08
managers’ fraud and breaches of fiduciary duty as well as commit
professional negligence in their representation of MF ’08. Lawsuits
are pending in the Alameda County Superior Court and in the United States
Bankruptcy Court for the Northern District of California.
If you would like to discuss this case with Pearson, Simon & Warshaw, please
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