Tag Archives: Derry Dean Sparlin Sr

Why would National Bank of Arizona lend these guys $35-million?!

15 Nov

Here’s the 2nd Amended Complaint by Derry Dean Sparlin, Sr., they dropped the Barnitt’s, who were victims too. (Morris Family Trust lost $1-million too.) Added Hadrianus Terra, LLC, which is also a defendant in my lawsuit another mutual defendant is Tucson Acquisition & Development Corporation, both affiliated with Michael N. Figueroa and Jeffery S. Utsch, who were the prior majority lot owners, Utsch was head of the HOA too.


2nd Amended Sparlin Complaint (PDF), Why would National Bank of Arizona lend them $35-million?! In the Complaint, “Corona Acres” refers to New Tucson / Sycamore Vista.

Sparlin has an interest in Hadrianus Terra, I’d like to have him join our lawsuit, his lawyer has written a serious indictment against the prior majority lot owners — securities fraud! Like to also see the lot owners who lost their lots to Hadrianus and Tucson Acquisition because of the bogus Assignments (they intimidated the prior lot owners) join our lawsuit. The prior lot owner of Russo’s associate Southern Arizona Land Trust lost their lots due to despair.


List of new defendants in my case (PDF)

The Assignments of Special Assessments, which are the focus of my lawsuit are securities. From reading this Amended Complaint, it appears that Western Recovery Services had no real cash assets and from looking at the HOA budgets (See Unit 5 for 2006, page 36) it looks like WRS never paid the HOA any money for the Assignments. The budgets consider the WRS “Purchase Agreements” as liabilities — whatever that means? These budgets are very confusing to me. The HOA gave? the assessments to WRS and then WRS sold them to friends and investors, not sure if any of that money went to the HOA.


(Copied from Arizona Corporation Commission, unfortunately, they’re not in order, click right or left side of the page in full-screen to advance or go back.)

EDIT: This explains how they got the loan, they got Carl F. Pepper to apply for it. Pepper is well-known builder and real estate investor. He and Utsch are still friends and business partners. Not sure of Pepper lost any money, I think they appointed him head of Sky Island, which was the vacant lot holding company. Also involved in the foreclosure was CORONA ACRES L.L.C. and PALATINE PROPERTIES FUND L.L.C. both Figueora and Utsch entities

April 20, 2008 – Acres of empty new-home lots marked by evenly spaced power hookups lie along Camino del Toro, west of South Houghton Road in Corona de Tucson. Nearby stands a sign: “Financed by National Bank of Arizona.”

In 2005, the development group Sky Island Properties Inc., led by Carl Pepper, took out a $32 million loan from National Bank of Arizona to buy land and make improvements there. Last November, the bank took the developers to court for defaulting on the loan and had the land placed under another developer’s supervision, court documents said. Read more.
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The $22-million and $9-million lot flip was between Title Security 862 and Sky Island.

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From the National Bank of Arizona Foreclosure in Pima County Superior Court.  1338 lots cost $6,826,000 = $5101/lot. Not sure how much NT Properties paid.

Prior majority lot owners’ plans failed, leading to more than $32-million debt

8 Apr

From the Sparlin Complaint, page 28-29:

i. Figueroa’s representation in October 2003 that Western Recovery Services (WRS) could get by with $6 million in capital depended on two key assumptions: first, that it would focus “exclusively” on a project in the Corona de Tucson area of’ Pima County (“Corona” [New Tucson]); and second, that by 2004 it would be selling lots to homebuilders at a rate of 233 per year, generating more than $8 million in annual income that would be used to make payments on the development loan and keep that debt at a constant balance of $5 million.

ii. No Corona lots were sold in 2004, putting the project more than $3 million in the hole as compared to the 2003 budget projection. This forced WRS and its successors in interest to incur additional debt on the development loan, increasing its debt far beyond the $5 million it had planned for and requiring a much greater future rate of lot sales to compensate for the added debt service.

iii. Only 54 Corona lots were sold in 2005, putting the project further in the hole: more than 400 lots behind its builder sales projections, creating a funding deficit of $14 million and requiring further draw-downs on the development loan.

iv. Corona lot sales totaled only 89 in 2006, creating further escalating debt.

v.. On November 11, 2007, after repeated defaults on a development loan balance that had grown to more than $32 million, the National Bank of Arizona foreclosed on the entire Corona project, cutting off the only source of current revenue for the enterprise.

vi. None of the serious shortfalls in builder sales can be dismissed as the unforeseen result of adverse economic circumstances, since they occurred during favorable real estate market conditions that preceded the subsequent real estate downturn.

From an October 2003 WRS study of how they planned to make New Tucson (“Corona”) work:

Company will acquire an additional 100 lots at $7,500 per lot cash in years 2-5, from other owners in the various Units bringing the total owned lots to 1,400.

They never offered me this much and I would not have sold.

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After conducting a study of other developments in the area they concluded:

Based on the information contained in this section, we believe that a group of 4-6 national and local builders each absorbing approximately 5 homes per month, or a total of 20-30 per month, is a reasonably conservative estimate. The projections assume that the initial average lot price will be $35,000, and that the absorption rate will be 233 owned lots per year indicating a 7-year (October 2010) sellout of the entire subdivision.

A recent letter of value from Southwest Appraisal Associates, Steve Cole, MAI, has valued the completed lots at an initial price of $35,000, projected first year absorption at 288 lots, and assuming constant market conditions a five-year sellout of the lots.

By the time they got around to blading, scraping and dumping 10,000 dump truck loads of dirt on Unit 5 (2007), I knew they would never finish the whole subdivision in 5-7 years. Thus, the imposition of $6000 liens on lots in Units 7, 8, 9 & 10, would accrue quite a bit of interest, which would make the deal/contract, unconscionable.

New Tucson Unit 5 Budget, 31 Dec 2008

22 Jan

It boggles my mind looking at these budgets from after the prior majority lot owners went bankrupt and caused National Bank of Arizona to lose $35-million, the biggest loss in their history. The prior majority owners never paid any dues.

“WRS” refers to “Western Recovery Services, LLC,” which sold our Special Assessments for lot development to suckers. The HOA allegedly “sold” the Assessments to WRS. WRS is actually a shell company of the former majority lot owners called, “Equity Lenders & Consultants, LLC,” many of the people in WRS & EL&C are being sued by one of the “suckers” who invested $2-million, some of it in “New Tucson.”

Western Recovery Service

A Search of the Pima County Recorder’s office shows Western Recovery is still active in stealing lots from people.

Who is Western Recovery Services

Who is Western Recovery Services, Western Associates Development? They are the former majority lot owners and members of the HOA boards being sued for securities fraud by Derry Dean Sparlin, Sr. (Click pic to enlarge.)

Western Recovery Lawsuit

Western Recovery Lawsuit. Click pic to enlarge. Attorney for this case is Kenneth E Chase, from Scottsdale, he specializes in securities fraud. The Complaint is about 50-pages and reads like a novel, brilliant work and research. I sent Mr. Chase info (email) about these guys but never heard from him.

Read entire Sparlin lawsuit HERE or HERE, New Tucson is mentioned on pages 28 & 55. 2nd Amended Sparlin Complaint

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Note the $800,200 “Purchase Agreements” liability for WRS (Western Recovery Services), what is this for?

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Where did all this money go??? See “Bad Debt Writeoff,” which is probably because the prior majority lot owners never paid any HOA dues. I was told at an HOA meeting there was never a forensic examination of the books by National Bank of Arizona. In China, banks would lend money to developers and both would skim money, take kickbacks and pay themselves handsomely:

In China, ventures may be spectacularly unprofitable, yet enrich everyone lucky enough to get a piece. Developers, for example, construct vacant office buildings as an excuse to borrow from state banks. They rake off a cut for themselves, pay bribes to the party officials who deliver the land and reward bank functionaries with sumptuous banquets and trips to Macao. Soon enough, the trophy skyscraper descends into financial disaster, but the developers, bankers and party officials have already extracted their riches, and for long afterward they will still enjoy them. “Lessons the Teacher Forgot,” New York Times, 16 May 2009.

Under new management.

Under new management, total waste of money.

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