ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP DAVID … · 2020-05-28 · 865 South Figueroa...

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

862489.01/SD

LAW OFFICES

Allen Matkins Leck Gamble Mallory & Natsis LLP

ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP DAVID R. ZARO (BAR NO. 124334) TIM C. HSU (BAR NO. 279208) 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 Phone: (213) 622-5555 Fax: (213) 620-8816 E-Mail: [email protected]

[email protected] ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP EDWARD G. FATES (BAR NO. 227809) One America Plaza 600 West Broadway, 27th Floor San Diego, California 92101-0903 Phone: (619) 233-1155 Fax: (619) 233-1158 E-Mail: [email protected] Attorneys for Receiver Thomas A. Seaman

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff, v.

STEVE CHEN, USFIA, INC., ALLIANCE FINANCIAL GROUP, INC., AMAUCTION, INC., ABORELL MGMT I, LLC, ABORELL ADVISORS I, LLC, ABORELL REIT II, LLC, AHOME REAL ESTATE, LLC, ALLIANCE NGN, INC., APOLLO REIT I, INC., APOLLO REIT II, LLC, AMKEY, INC., US CHINA CONSULTATION ASSOCIATION, and QUAIL RANCH GOLF COURSE, LLC,

Defendants.

Case No. 2:15-cv-07425 RGK PLA DECLARATION OF THOMAS A. SEAMAN IN SUPPORT OF MOTION FOR (A) APPROVAL OF SALE OF RESIDENTIAL REAL PROPERTY (GAINSBOROUGH DRIVE PROPERTY), AND (B) AUTHORITY TO PAY BROKER'S COMMISSION Date: January 8, 2018 Time: 9:00 a.m. Ctrm.: 850 Judge: Hon. R. Gary Klausner

Case 2:15-cv-07425-RGK-PLA Document 288-1 Filed 12/07/17 of 23 Page ID #:8352

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

862489.01/SD

LAW OFFICES


I, Thomas A. Seaman, declare:

1. I am the Court-appointed receiver for USFIA, Inc., Alliance Financial

Group, Inc., Amauction, Inc., Aborell Mgmt I, LLC, Aborell Advisors I, LLC,

Aborell REIT II, LLC, Ahome Real Estate, LLC ("Ahome"), Alliance NGN, Inc.,

Apollo REIT I, Inc., Apollo REIT II, LLC, Amkey, Inc., US China Consultation

Association, Quail Ranch Golf Course, LLC, and their subsidiaries and affiliates

(collectively, "Receivership Entities").

2. I make this declaration in support of my Motion for (A) Approval of

Sale of Residential Real Property (Gainsborough Drive Property), and (B) Authority

to Pay Broker's Commission ("Motion"). I have personal knowledge of the facts

stated herein, and if called upon to do so, I could and would personally and

competently testify to them.

3. Through my forensic accounting, I discovered that the Receivership

Entities purchased real property located at 2857 Gainsborough Drive, San Marino,

California ("Property") – a single-family residence. Specifically, on April 3, 2015,

the Property was purchased for approximately $2,335,000, all of which funds were

transferred directly to escrow from the Receivership Entities Amkey, Inc. and

Ahome Real Estate LLC. However, title to the Property was taken in the name of

Jennifer Zhao, the mother of Defendant Steve Chen's son.

4. The Property is approximately 3,015 square feet and has four bedrooms

and a pool. Although I demanded turnover of the Property, Ms. Zhao initially did

not comply. Ms. Zhao and I, through counsel, later entered into negotiations, at

which time Ms. Zhao agreed to turn over the Property. The stipulation vesting title

to the Property in my name, as Receiver, was approved by the Court on

September 20, 2017. Dkt. No. 278. Upon obtaining possession of the Property, I

immediately had the Property appraised, which returned a value of $2,400,000 as of

November 9, 2017.


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

862489.01/SD -2-

LAW OFFICES


5. Given that holding and maintaining the Property entails significant

carrying costs to the receivership estate, including costs for maintenance, insurance,

and property taxes, and that the Property has no business purpose for the benefit of

the Receivership Entities, I listed the Property for sale through licensed broker,

Keller Williams Realty ("Broker").

6. After reviewing recent comparable sales and similar property listings

with Broker, I listed the Property for sale on November 8, 2017, at $2,380,000.

Broker held three open houses, and over 120 prospective buyers viewed the

Property. Four offers were received, the best of which was an all-cash offer for

$2,360,000 from Jianhua Zhang and Yu Wan (collectively "Buyer"). I countered

the offer at $2,400,000, which Buyer accepted, subject to overbid and Court

approval.

7. In accordance with Buyer's acceptance, Buyer and I entered into a

Residential Purchase Agreement and Joint Escrow Instructions ("Agreement").

Among other things, the Agreement specifies the sale is subject to Court approval

and is on an "AS IS" basis. The Agreement is attached hereto as Exhibit A. Buyer

has recently removed all contingencies for the sale, other than Court approval.

8. In my reasonable business judgment, I believe the Agreement, obtained

through the commercially reasonable and customary method of listing the property

with a licensed broker and after arm's length negotiations with Buyer, reflects the

fair market value of the Property. Moreover, the sale is subject to overbid and

public auction procedures discussed below.

9. The proposed sale to Buyer should be approved. The Property has been

fully and properly exposed to the market by Broker through the customary means of

listing the property on the Multiple Listing Service ("MLS"), advertising, and

holding open houses. The proposed purchase price is consistent with the appraised

value received at the time of listing the Property (November 2017). I believe the


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

862489.01/SD -3-

LAW OFFICES


proposed sale represents the fair market value and will generate the highest and best

recovery from the Property.

10. Moreover, the proposed sale is subject to overbid and public auction. I

propose to conduct a public auction consistent with the requirements of

Section 2001(a). Specifically, I will publish the following notice of the sale once a

week for four weeks in the San Gabriel Valley Tribune:

In the action pending in U.S. District Court for the Central District of California, Case No. 16-CV-07425-RGK-PLA, Securities and Exchange Commission v. Steve Chen et al., notice is hereby given that the court-appointed receiver will conduct a public auction for the residential real property located at 2857 Gainsborough Drive, San Marino, California. Sale is subject to Court confirmation after the auction is held. Minimum bid price is $2,525,000. The auction will take place on January 8, 2018, at 11;00 a.m. at the property located at 2857 Gainsborough Drive, San Marino, California. To be allowed to participate in the auction, prospective purchasers must meet certain bid qualification requirements, including submitting a signed purchase and sale agreement, an earnest money deposit of $70,800, and proof of funds. All bidders must be qualified by 3:00 p.m. PT on January 2, 2018, by submitting the required materials to the Thomas Seaman Company at 3 Park Plaza, Suite 550, Irvine California, 92614. If interested in qualifying as a bidder, please contact Eva Lin at (626) 807-6581 or [email protected].

11. In order to conduct an orderly auction and provide sufficient time for

the publication of notices discussed above, I will require bidders to complete the

above steps by January 2, 2017 ("Bid Qualification Deadline"), and conduct the live

public auction at the Property at 11:00 a.m. on January 8, 2018.

12. I will inform all interested persons of the opportunity to overbid at the

public auction, provided they qualify themselves to bid by the Bid Qualification

Deadline by (a) signing a purchase and sale agreement for the properties on the

same terms and conditions as Buyer, but with a purchase price of at least

$2,525,000, (b) providing me with an earnest money deposit of $70,800, and

(c) providing proof of funds necessary to close the sale transaction in the form of a

current bank statement, cashier's check delivered to me, or other evidence I deem

sufficient.


EXHIBIT A

Exhibit A, Page 5


11/14/2017

Jianhua Zhang, Yu Wan 2857 Gainsborough Dr, San Marino, CA 91108-2209

San Marino Los Angeles 91108-2209 5331016018Two Million, Three Hundred Sixty Thousand

2,360,000.00X 10

X

Keller Williams Realty PasadenaX

Keller Williams Realty PasadenaX

X

70,800.00

X

2,289,200.00

2,360,000.00

X X X

Evangelyn Lin, 251 S Lake Ave Suite 150 Pasadena, CA 91106 (626)807-6581 2857Evangelyn Lin

DocuSign Envelope ID: 6C673B03-DFD2-4DF5-A03A-E0BAE44D62A1

Exhibit A, Page 6


2857 Gainsborough Dr, San Marino, CA 91108-2209 November 14, 2017

X

X

XClick here to select your Service Provider

X X X

2857


Exhibit A, Page 7



X

X

X

X X Each Pay Their OwnSeright Escrow

XChicago Title

X

X

X X

X X X

2857


Exhibit A, Page 8



X X X

2857


Exhibit A, Page 9



X X X

2857


Exhibit A, Page 10



X

X X X

2857


Exhibit A, Page 11



X X X

2857


Exhibit A, Page 12



X X X

2857


Exhibit A, Page 13



Jianhua Zhang

Yu Wan

X X

2857


Exhibit A, Page 14



Thomas Seaman, Receiver for USFIA

Keller Williams Realty PasadenaEvangelyn Lin

Keller Williams Realty Pasadena 01444805Evangelyn Lin 01817694

251 S Lake Ave Ste 150 Pasadena CA [email protected]

X

2857


Exhibit A, Page 15


XJianhua Zhang

XYu Wan

Keller Williams Realty Pasadena

Evangelyn Lin




Exhibit A, Page 16


2857


Exhibit A, Page 17



Jianhua ZhangYu Wan

Keller Williams Realty Pasadena 0144480501817694

Evangelyn Lin

Keller Williams Realty Pasadena

Evangelyn Lin



Exhibit A, Page 18


2857 Gainsborough Dr, San Marino, CA 91108-2209

X Jianhua ZhangYu Wan

X Thomas Seaman, Receiver for USFIA

X



Exhibit A, Page 19


2857 Gainsborough Dr, San Marino, CA 91108-2209

Jianhua Zhang Yu Wan



Exhibit A, Page 20


BUYER COUNTER OFFER No. 1(C.A.R. Form BCO, 11/14)

DateThis is a counter offer to the: Seller Counter Offer No. , Seller Multiple Counter Offer No. , orOther (“Offer”),dated , on property known as (“Property”),between (“Buyer”) and (“Seller”).

1. TERMS: The terms and conditions of the above referenced document are accepted subject to the following:A. Paragraphs in the Offer that require initials by all parties, but are not initialed by all parties, are excluded from the final

agreement unless specifically referenced for inclusion in paragraph 1C of this or another Counter Offer or an addendum.B. Unless otherwise agreed in writing, down payment and loan amount(s) will be adjusted in the same proportion as in

the original Offer.

C. OTHER TERMS:

D. The following attached addenda are incorporated into this Buyer Counter offer: Addendum No.

2. EXPIRATION: This Buyer Counter Offer shall be deemed revoked and the deposits, if any, shall be returned: A. Unless by 5:00pm on the third Day After the date it is signed in paragraph 3 (if more than one signature then, the last signature

date)(or by AM PM on (date)) (i) it is signed in paragraph 4 by Seller and (ii) a copy of the signedBuyer Counter Offer is personally received by Buyer or , who isauthorized to receive it.

OR B. If Buyer withdraws it in writing (CAR Form WOO) anytime prior to Acceptance.

3. OFFER: BUYER MAKES THIS COUNTER OFFER ON THE TERMS ABOVE AND ACKNOWLEDGES RECEIPT OF A COPY.Buyer DateBuyer Date

4. ACCEPTANCE: I/WE accept the above Buyer Counter Offer (If checked SUBJECT TO THE ATTACHED COUNTER OFFER)and acknowledge receipt of a Copy.Seller Date Time AM/ PMSeller Date Time AM/ PM

CONFIRMATION OF ACCEPTANCE:

( _____ / _____ ) (Initials) Confirmation of Acceptance: A Copy of Signed Acceptance was personally received by Buyer or Buyer'sauthorized agent as specified in paragraph 2A on (date) at AM/ PM. A binding Agreement is createdwhen a Copy of Signed Acceptance is personally received by Buyer or Buyer's authorized agent whether or not confirmed inthis document.

© 2014, California Association of REALTORS®, Inc. United States copyright law (Title 17 U.S. Code) forbids the unauthorized distribution, display and reproduction of this form, or any portion thereof, byphotocopy machine or any other means, including facsimile or computerized formats.

THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANYPROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE,CONSULT AN APPROPRIATE PROFESSIONAL.

This form is made available to real estate professionals through an agreement with or purchase from the California Association of REALTORS®. It is not intended to identify the user as a REALTOR®.REALTOR® is a registered collective membership mark which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subscribe to its Code of Ethics.

Published and Distributed by:REAL ESTATE BUSINESS SERVICES, INC.a subsidiary of the California Association of REALTORS®525 South Virgil Avenue, Los Angeles, California 90020

Reviewed by DateBCO 11/14 (PAGE 1 OF 1)

BUYER COUNTER OFFER (BCO PAGE 1 OF 1) Phone: Fax:

Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLogix.com

November 16, 2017X 1

November 14, 2017 2857 Gainsborough Dr, San Marino, CA 91108-2209Jianhua Zhang, Yu Wan Thomas Seaman, Receiver for USFIA

Purchase Price to be $2,400,000

Jianhua ZhangYu Wan



DocuSign Envelope ID: A0072896-C080-47A8-9966-766D550D9DD8

11/16/201711/16/2017

Exhibit A, Page 21


CONTINGENCY REMOVAL No.(C.A.R. Form CR, Revised, 6/16)

In accordance with the terms and conditions of the: Residential Purchase Agreement (C.A.R. Form RPA-CA), Request For Repair(C.A.R. Form RR), Response And Reply To Request For Repair (C.A.R. Form RRRR) or Other

("Agreement"),dated , on property known as ("Property"),between ("Buyer")and ("Seller").I. BUYER REMOVAL OF BUYER CONTINGENCIES:

1. With respect to any contingency and cancellation right that Buyer removes, unless otherwise specified in a separate writtenagreement between Buyer and Seller, Buyer shall conclusively be deemed to have: (i) completed all Buyer Investigations andreview of reports and other applicable information and disclosures; (ii) elected to proceed with the transaction; and (iii) assumedall liability, responsibility and, expense, if any, for Repairs, corrections, or for the inability to obtain financing. Waiver of statutorydisclosures is prohibited by law.

2. Buyer removes those contingencies specified below.A. ONLY the following individually checked Buyer contingencies are removed:

1. Loan (Paragraph 3J)2. Appraisal (Paragraph 3I)3. Buyer's Physical Inspection (Paragraph 12)4. All Buyer Investigations other than a physical inspection (Paragraph 12)5. Condominium/Planned Development (HOA or OA) Disclosures (Paragraph 10F)6. Reports/Disclosures (Paragraphs 7 and 10)7. Title: Preliminary Report (Paragraph 13)8. Sale of Buyer's Property (Paragraph 4B)9. Review of documentation for leased or liened items (Paragraph 8B(5)10. Other:11. Other:

OR B. ALL Buyer contingencies are removed, EXCEPT: Loan Contingency (Paragraph 3J); Appraisal Contingency(Paragraph 3I); Contingency for the Sale of Buyer's Property (Paragraph 4B); Condominium/Planned Development(HOA) Disclosures (Paragraph 10F); Other

OR C. BUYER HEREBY REMOVES ANY AND ALL BUYER CONTINGENCIES.3. Once all contingencies are removed, whether or not Buyer has satisfied him/herself regarding all contingencies or

received any information relating to those contingencies, Buyer may not be entitled to a return of Buyer's depositif Buyer does not close escrow. This could happen even if, for example, Buyer does not approve of some aspectof the Property or lender does not approve Buyer's loan.

NOTE: Paragraph numbers refer to the California Residential Purchase Agreement (C.A.R. Form RPA-CA). Applicable paragraphnumbers for each contingency or contractual action in other C.A.R. contracts are found in Contract Paragraph Matrix (C.A.R. FormCPM).Buyer Date

Buyer Date

II. SELLER REMOVAL OF SELLER CONTINGENCIES: Seller hereby removes the following Seller contingencies: Finding of replacement property (C.A.R. Form SPRP); Closing on replacement property (C.A.R. Form SPRP) Other

Seller Date

Seller Date

( / ) (Initials) CONFIRMATION OF RECEIPT: A copy of this signed Contingency Removal was personally receivedby Buyer Seller or authorized agent on (date), at AM / PM.© 2003-2016, California Association of REALTORS®, Inc.THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS®. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITYOR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATETRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL.

Published and Distributed by:REAL ESTATE BUSINESS SERVICES, INC.a subsidiary of the California Association of REALTORS®525 South Virgil Avenue, Los Angeles, California 90020 Reviewed by Date

CR REVISED 6/16 (PAGE 1 OF 1)CONTINGENCY REMOVAL (CR PAGE 1 OF 1)

Phone: Fax: Produced with zipForm® by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zipLogix.com

1

X

11/14/2017 2857 Gainsborough Dr, San Marino, CA 91108-2209Jianhua Zhang, Yu Wan


X

XJianhua Zhang

Yu Wan

XThomas Seaman, Receiver for USFIA

X



11/14/2017

11/14/2017

Exhibit A, Page 22


ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP DAVID … · 2020-05-28 · 865 South Figueroa...

Documents

Transcript of ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP DAVID … · 2020-05-28 · 865 South Figueroa...