real estate

Bellevue real estate firm ran a Ponzi scheme, say bankruptcy filings

A Bellevue-based real estate investment firm that allegedly failed to repay hundreds of investors operated a Ponzi scheme, the third-party company now overseeing the firm contends in recent bankruptcy filings. 

Founded in 2011, investment firm iCap raised money promising to invest in Seattle-area real estate projects. But after the firm allegedly extended timelines for repaying investors and stopped paying monthly interest payments, some investors sued iCap last year in King County Superior Court. ICap filed for Chapter 11 bankruptcy in September and the restructuring company Paladin took over.

In bankruptcy court filings late last week, Paladin and attorneys representing iCap investors together asked the court to agree that iCap ran a Ponzi scheme. 

The conclusion “is based on overwhelming evidence,” Chief Restructuring Officer Lance Miller said in a statement to The Seattle Times. “Court recognition of this conclusion will materially expedite and support our ongoing efforts toward a favorable outcome.”

Chris Christensen, who founded the company and stepped down as CEO in September, disputed the description of his business as a Ponzi scheme.

“Mr. Christensen strongly disputes the allegation that iCap operated as a Ponzi scheme,” Christensen’s attorneys said in a statement to The Seattle Times. “Mr. Christensen will

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March 3, 2024 by ATTORNEY

Pension tussle taking center stage in Yellow bankruptcy

Yellow Corp.’s bankruptcy case is progressing on several fronts—but not yet on the one with the biggest dollar amounts at play.

In recent weeks, Yellow attorneys exchanged filings with their peers at the Central States Pension Fund and the federal Pension Benefit Guaranty Corp. in U.S. Bankruptcy Court for the District of Delaware about how to resolve the question of the company’s remaining pension obligations. Yellow, which was the sixth-ranked carrier on the 2023 FleetOwner 500: For Hire list before it shut down in July, claimed in December that the PBGC’s early-2023 bailout of Central States meant the pension plan couldn’t then also claim billions from Yellow.

International Brotherhood of Teamsters-affiliated Central States asked Yellow last summer to cover nearly $5 billion in withdrawal liabilities (the company’s alleged share of unfunded benefits) and another $900 million in so-called participation guarantees. Yellow called those claims an attempt to collect “hundreds of millions of dollars in damages it has not sustained” and said pension officials were asking for “free money.”

Lawyers for Central States responded in early January not by directly addressing the legal merits of their claim but by saying that various federal courts have held that a dispute over pension

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January 25, 2024 by ATTORNEY

BG Law Hires Poitras as Partner in Commercial Bankruptcy, Insolvency and Real Estate Practices

Corporate and insolvency lawyer David Poitras joined BG Law as a partner in its commercial bankruptcy and insolvency and real estate practices.

Poitras is a corporate, bankruptcy and real estate attorney with more than 30 years of experience at private practice law firms and as in-house general counsel. Poitras joined BG Law from Wedgewood, a network of companies specializing in real estate and real estate loans, where he served as general counsel and corporate secretary. In this role, he managed contract negotiations, transactional and financing documents, and advised on a range of corporate issues, such as compliance, human resources, regulatory matters and corporate governance. Poitras also supervised a litigation portfolio of approximately 75 cases, leading a team of 10 attorneys and paralegals across two offices in Los Angeles and Las Vegas, covering a more than 20-state footprint.

Prior to his tenure with Wedgewood, Poitras was a partner at Jeffer Mangels Butler & Mitchell, where he was a member of the firm’s national financial restructuring, bankruptcy, real estate and litigation practices. He began his legal career as a bankruptcy associate and then partner with Danning, Gill, Diamond & Kollitz (now known as Danning, Gill, Israel and Krasnoff) in Los Angeles.

In

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December 2, 2023 by ATTORNEY

WeWork seeks bankruptcy protection in stunning fall for a firm once valued at close to $50 billion

NEW YORK (AP) — WeWork has filed for Chapter 11 bankruptcy protection, marking a stunning fall for the office sharing company once seen as a Wall Street darling that promised to upend the way people went to work around the world.

The New York company said late Monday that it had entered into a restructuring agreement with most of its stakeholders aimed at slashing its debt, while it looks to trim its commercial office lease portfolio.

The agreement is expected to erase about $3 billion of WeWork’s debt, CEO David Tolley told The Associated Press.

WeWork is paying the price for aggressive expansion in its early years. The company went public in October 2021 after its first attempt to do so two years earlier collapsed spectacularly. The debacle led to the ouster of founder and CEO Adam Neumann, whose erratic behavior and exorbitant spending spooked early investors.

“I feel like (WeWork) has been imploding in slow motion,” Nicole Schmidt, an attorney and managing partner at investment banking firm Oberon Securities, said while pointing to Neumann’s actions that lead up to the company’s first IPO failing.

“WeWork as a company may survive, but they’ve got a tremendous amount of baggage,” she

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November 12, 2023 by ATTORNEY

WeWork’s bankruptcy caps swift downfall for $47 billion standout

Just two years after it went public, the once high-flying real estate business WeWork filed for bankruptcy without ever having figured out how to make flexible workspaces into a profitable enterprise.

It caps a wild ride for a company that began with the idea of re-imagining staid offices as fun places to hang out and grew to a behemoth worth $47 billion at its peak. A botched 2019 initial public offering and erratic behavior by co-founder Adam Neumann started WeWork’s downfall, but the company was also battered by forces outside its control — COVID-19 lockdowns and a slow return to offices that undermined demand.

The company listed $19 billion of liabilities and $15 billion of assets in its Chapter 11 filing in New Jersey on Monday. The petition allows WeWork to continue operating as it works to shore up finances. The company said it reached a restructuring deal with longtime backer SoftBank Group and existing creditors to slash over $3 billion of debt. Most shareholders will be wiped out. It never turned a profit as a public company, reporting net losses that totaled $3 billion.

Bankruptcy will also, critically, allow WeWork to cancel or renegotiate unprofitable leases at more than

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November 9, 2023 by ATTORNEY
April 2024
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