Dan I pointed out those very things in my post. None of what either of us cites makes it clear. As I said we have to see the document to be sure.
Most of it leans toward the sale of debentures, not equity interests. We can argue all day about it but without the document you can't know for sure. --- In [email protected], "dfsavgny" <[EMAIL PROTECTED]> wrote: > > --- In [email protected], "bluebishop82" <bluebishop82@> > wrote: > > > > 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 > > But it also says the following > > A. Defendants Offer Sale of unregistered Securties;l to > Investors > I 39. The RE1 Notes are offered as 'investment > vehicles" for the real estate ventures of REI. REI's real > estate ventures purportedly earn investment income or capital > appreciation. (Leone Cert. 84 24-27, 42, Ex. D) ; (Winters Cert. > s > 9% 18-25, EX. C . ) > > How do you get capital appreciation without an equity kicker? > > > 41. Most RE1 Notes are titled "Assignments of > Interest - . . . Preferred Return on Investment (ROI) . " Under > the RE1 Notes, the maker, usually Klein, "assigns his share of > the property described [in the note]," which entitles the > investor to the 'rate of return" on the face of the RE1 Note. > (Leone Cert. Ex. D.); (Winter Cert. 9 9, Ex. F.) > > Tom, as I said, Klein or the LLCs assigned their interest in the > property. What interest did they have? Equity interests. The > investors were debt investors BUT NOT ON THE REAL ESTATE. They were > debt investors to the ownership interests who pledged their equity > interests as collateral. Call them what yoy will, but the investors > have no recorded debt liens on the property. They can only come to > the trough after the PROPERTY LENDERS have their fill. > > Some more to show the distinction. Property 101. You owe me tuition. > > e. "the total debt and investor equity on the > properties would not exceed 75% to 85%; and > > b. that the property securing and underlying > some of the REI Notes did not fully protect > investors because the properties were > encumbered by mortgages and other > undisclosed debt; > > c. that commercial and institutional lenders > received first mortgages on the properties > and would have priority over the investors' > interest in the property; > > 72. Furthermore, the solicitation materials and the > RE1 Notes represented that the investment properties would not > be encumbered by debt greater than 75% to 85% of the market > value of the property. (Leone Cert. 9 40) ; (Winters Cert, % 37, > Ex. N.) > > 75. Most of REI's properties were also encumbered by > the first mortgages of institutional and commercial lenders, but > investors were unaware of these mortgagees. (Leone Cert. Exs. > K, L.) > Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/AsburyPark/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
