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Thursday, September 13, 2018

Receivership firm Trigild takes on diverse challenges

 

 

1025 Prospect, a 33,055-square-foot office and retail development in downtown La Jolla, is one of the properties Trigild oversees.

By Thor Kamban Biberman

Whether it is helping to sort out a $400 million Ponzi scheme case involving non-existent ATM machines nationwide, handling over-leveraged Hilton Garden Inns in Wyoming and Pennsylvania, or renovating multifamily units with many code violations in Santa Barbara, San Diego-based Trigild is on the case.

Trigild president Judy Hoffman said the ATM case that has been going on for the past 16 years and involves employees of Nationwide Automated Systems, who defrauded an estimated 2,000 investors.

The employees told investors that they sold, leased back and installed as many as 31,000 ATM machines when fewer than 300 actually existed, Hoffman said.

The investors agreed to pay $12,000 or $19,800 per machine, which were, in turn, supposed to be leased back to Nationwide Automated Systems for 50 cents per ATM transaction. Investors were then told they would see returns of at least 20 percent, according to Hoffman.

While the early investors may have seen such returns, the alleged Ponzi scheme — deemed the largest ever in Southern California — later fell apart.

In October 2014, Trigild CEO William Hoffman was appointed temporary receiver for Nationwide Automated Systems Inc., its subsidiaries and affiliates, pursuant to an order entered by the U.S. District Court for the Central District of California.

After certain employees of National Automated Systems were sentenced for conspiracy, mail fraud and wire fraud, Trigild — as the court appointed receiver in the case — went after officials in City National Bank’s Woodland Hills office.

“We sued the bank,” Judy Hoffman said, alleging that City National Bank officers were complicit in the scheme. That was in June 2016. The case is currently undergoing settlement negotiations.

Trigild also was appointed a receiver responsible for upgrading a group of small apartment properties in Santa Barbara that were allowed to deteriorate.

They never made repairs, and there were multiple code violations,” Hoffman said.

She said some of the other management and receiver contracts held by Trigild include Hilton Garden Inns in Wyoming and Pennsylvania that didn’t fare as well as expected.

While most of its assignments are elsewhere, Trigild does act as a receiver and/or manager on some San Diego assets.

One of the properties is a 33,055-square-foot office and retail development in downtown La Jolla. Some of the tenants include Wells Fargo Home Mortgage, Pura Vida Bracelets, Arjang Art Group and Lawyers Title among other, according to The CoStar Group.

The Prospect Square property, which suffered during the recession, is doing better, but still has about 7,400 square feet of available space, according to The CoStar Group.

Other properties that are under Trigild’s care in the San Diego region include the 81,684-square-foot Genesee Plaza office building in UTC, and the 50,925-square-foot Pacific Medical Plaza office building in Sorrento Mesa.

Judy Hoffman, who has seen several downturns, agrees with another receiver — Douglas Wilson Cos. chairman and CEO Doug Wilson — that at least a mild recession is coming.

“I think it will be in 2020,” she said. “The economy got juiced up because of the tax cuts, but they have run their course.”

Hoffman said there will be a downturn if, for no other reason, it has been a decade since the last one. With an eye on such properties as Horton Plaza, Hoffman said she is particularly concerned about the future of retail. “Retail is still troubled … It is still a challenge,” she said.