Harkey Investor Letter - March 22, 2013

 From: Dan Harkey <dharkey@pointcenter.com>

Date: Fri, Mar 22, 2013 at 11:32 AM

Subject: Attention All Investors

To: 

Attention All Investors: 

Lloyd Charton recently filed paperwork with the U.S. Trustee in the Point Center Financial Chapter 11 reorganizational bankruptcy to become a member of the Unsecured Creditors’ Committee.  

As did 13 other investors who were also creditors. There were several others who missed the cut-off because Harkey failed to submit a complete and honest list to the bankruptcy court. There are still numerous creditors that Point Center has failed to identify, primarily those tied up in trust deed investments and the NFL pool who deposited their funds with Point Center.

He then argued to have his personal lawyer, David Lally be appointed as the lawyer for the Committee and have himself appointed as chairman of the Committee.  

Charton, a prominent Orange County litigator, made the acquaintance of hundreds of attorneys in his career. David Lally, was suggested by Charton and was personally interviewed by investors and plaintiffs' attorneys along with other candidates. As it turned out, Lally proved himself an extremely sharp bankruptcy attorney and was the right individual for the job. He successfully argued to lift the automatic stay, and has been on top of every move that Dan Harkey and his gang has made. Who, other than Dan Harkey and his gang, would have a problem with that?

Shocking, in light of the fact that Lloyd is not an unsecured creditor of Point Center.

Interesting statement considering that Charton is listed by Point Center as an unsecured creditor. Factually speaking, individuals who hold both secured and unsecured assets can be both secured and unsecured investors. Nothing shocking in that. 

What Lloyd and his wife Stella are trying to do is to place themselves in a priority position above other members of his plaintiff group.

Members of the bankruptcy court's Creditors Committee have a fiduciary responsibility to ALL unsecured creditors regardless of whether they are plaintiffs in a lawsuit against Point Center Financial and Dan Harkey or not. No one member of the Committee (there are 7 in this case) has the individual power to preempt the others. What Charton brings to the Committee that the others lack is a lifetime of legal expertise and information as to the inner workings of Point Center Financial based on years of evidence gathering and trial preparation. This should not be troublesome for Dan Harkey if his hands are clean.

This is a clear case of conflict of interest.  

Harkey has not substantiated this allegation and failed to clearly define the mechanics of any conflict were it to actually exist.

His clear motive is to get his and Stella’s money back first, prior to other investors with no regard whatsoever for his own co-plaintiffs.  That is, of course, assuming that he had any regard for them in the first place other than spend their money to help him finance the lawsuit.

This is both factually untrue and legally impossible. Harkey placed Point Center Financial into Bankruptcy. He has not yet placed the 70 other entities that he is sole manager of into Chapter. What ever assets remain in Point Center when the time comes will ultimately be divided pro-rata and according to Judge Albert's ruling. To suggest otherwise insults the Court and the legal process.

Harkey appears to be overly obsessed with Charton to the point that he presumes to read Charton's mind with respect first to motive and then to Charton's regard for his fellow investors. This can be characterized as grasping at straws for Harkey's comments have no merits and he fails to produce a factual basis for his remarks.

Where was Grant, Genovese & Baratta, LLP in this effort?  Absent!  While Lloyd Charton postured for preferential court positioning, the plaintiffs’ lawyer was kept muzzled and shackled.  

Plaintiffs' counsel wisely chose a bankruptcy attorney to act in their and their clients' best interests. Most individuals have no experience with personal or corporate bankruptcy. This is also true for most attorneys unless they specialize in this area of law. Only an uninitiated individual would make such ignorant statements.

His co-plaintiffs who are bearing the cost of litigation for Charton’s vendetta against Point Center were left unrepresented, with their pockets picked while Lloyd took advantage once again. Haven’t co-plaintiffs paid enough for Lloyd Charton’s perceived “Cat Bird Seat”?

Again, factually incorrect and not substantiated with anything other than hysteria.

Why didn’t Lloyd Charton move to be on the creditor committee on behalf of all his co-plaintiffs?  

Charton joined the Creditors Committee not only for his co-plaintiffs, he joined for the benefit of all unsecured creditors. That is the responsibility each committee member assumes.

Watch their belated lamentations fall on deaf ears if Lloyd Charton gets his first and they get nothing!  I have no clue why the plaintiffs don’t call Grant, Genovese & Baratta to demand equal status.  A tiger does not change his stripes as evidenced by the all telling 1996 LA Times article 

One would assume that Dan Harkey is lost in a time warp. The year is 2013. Charton's actions will speak for itself as will the facts that will be presented to both the bankruptcy and civil courts.

that reveals Lloyd’s true nature . . .

“The splash case, replete with lawsuits, suggestions of possible criminal wrongdoing and sensational media coverage, has inspired a class Charton performance.”

“This was kind of a circus atmosphere . . . it was horrendous”

“Charton, who has hosted his own radio show and carries press credentials, has made a living with unexpected moves that throw opponents off balance”

“Detractors say Charton is drawn to the glory of the big case but is sometimes put off by the spadework.”

“I didn’t leave any client in the lurch,” Charton said.  “As far as I was concerned, the deal was done.”

Just as in the litigation against Point Center, Lloyd Charton is now trying to get other members of the Creditors’ Committee to pay for his fight.

The meaning of which exists only in the mind of Dan Harkey...

Dan Harkey

President

Point Center Financial, Inc.

7 Argonaut │ Aliso Viejo, CA 92656 │ Toll-free: 1-800-544-8800 Ext. 6201 Direct/Fax: 949-276-6201 www.pointcenter.com

Real Estate Broker - CA Dept. of Real Estate #00745721

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