Dan I read it too, and I still don't see where these investors were
given equity as you say. The complaint makes clear they were
selling "Notes, Investment Contracts and OTHER FORMS OF INDEBTEDNESS
[emphesis supplied]."
That's not equity. That's debt.
One part indicates that Klein somehow pledged his interest as
collateral. If he out and out transfered it, then you're right that is
equity. If he only collateralized it, then we are still talking about
these "investors" being creditors only, not equity holders.
Where it says they don't have "day to day control" over the operations
does suggest an equity position as you say, because a creditor wouldn't
expect to have that in the first place.
I'd have to inspect one of the investment vehicles to give a formal
opinion on debt/equity.
In reading the "Dottie" transaction, as described, that was debt only,
not equity.
Either way if you are an equity holder or a credtor and there is no
money left, your sinking either way (although the debtors have priortiy
over the equity holders if there is any money left).
--- In AsburyPark@yahoogroups.com, "dfsavgny" <[EMAIL PROTECTED]> wrote:
>
> Tom, I read the complaint against RET. It is as I said. The investors
> are "equity" investors and only get a chance to eat after the
> institutional and commercial lenders. The investors were never aware
of
> the debt on the properties, which exceeded $26 million (13
properties).
>
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