Local attorney Peter Josserand XIII is attempting to put San Luis Obispo developer Fred Machado into involuntary Chapter 7 bankruptcy on behalf of three former investors — one more time.
The investors gave Machado money through the now-bankrupt Hurst Financial lender to develop a subdivision in the Central Valley, called La Valencia Estates, but Machado has defaulted on his payments, according to investor Loney Brown of Riverside. They want to force him to open his books to prove he is incapable of meeting his debts, Brown said.
According to Hurst Financial loan documents, Machado had borrowed about $11.6 million from the firm from 2003 to 2006 for three housing projects called La Valencia Estates in Visalia, Sheid Ranch in Paso Robles and Carrizo Road in Atascadero. It is unknown how much of the money has been left unpaid, but all Hurst Financial loans are now in default or have been foreclosed.
Machado’s home on Via Laguna in San Luis Obispo is also being put up for public auction on the San Luis Obispo County Courthouse steps to repay a debt of more than $566,000, according to a notice of trustee’s sale published in The Tribune on Saturday. The auction is scheduled for 11:30 a.m. on Jan. 15.
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The three investors claim Machado borrowed about $700,000 from them collectively, according to their first and second petition to place Machado into involuntary bankruptcy.
Machado told The Tribune he was unaware of the second petition. He also said he did not understand its ramifications nor was he prepared to discuss the issue in detail, but he did know he had no plans to file for bankruptcy.
“Yes, there are problems and the real estate market is in shambles,” Machado said. “I can also tell you I wish I had never met Jay Miller.
But I didn’t do anything wrong. The parcels that I have; there is no wrongdoing.
“I am doing my best to resolve the issues,” he said. “I’m not planning to go anywhere and hope that over time, I will be redeemed.”
The first petition filed in November was thrown out of Bankruptcy Court within weeks of its filing because Josserand had failed to file an official summons on Machado, according to presiding Judge Robin Riblett of the U.S. Bankruptcy Court division in Santa Barbara. Josserand also did not appear at a status conference on the case, as required, although he had written the judge in advance that he would be out of town, according to court filings.
Josserand filed the second petition and entered a summons on Dec. 14, according to court documents. Machado, however, said he has not yet received any kind of summons.
A status conference on the case is scheduled for 2 p.m. Jan. 6 in Santa Barbara. The clerk of the court stated in his notice on the conference that Josserand will be required to appear at that time as well.
— Melanie Cleveland
Paso Chamber elects new directors
The Paso Robles Chamber of Commerce recently elected its 2010 board of directors.
The chairman is George Duck of George Duck Associates CPAs. Newly elected board members include: Jason Cross, publisher of the Paso Robles Press and Gazette; Rob Sharp, owner of Vinoteca Wine Bar and Sharp’s Hill Vineyards; and Julie Stears, branch manager of Rabobank N.A. on Spring Street.
Returning board members include Bill Roof of Hampton Inn and Suites; Debra Albert of Kennedy Club Fitness; Helena Berardi of Heritage Oaks Bank; Henry Elisarraraz of State Farm Insurance; Rick Lyons of Twin Cities Community Hospital; Janet Marcotte of Central Coast Adworks; Sandee McLaughlin of Cuesta College North County Campus; Ron Nodder of Chateau Lettau Winery; Ingrid Olsen of Boy Scouts of America; Victor Popp of La Quinta Inn & Suites; Sharon Ross of Bank of America; and Greig Welch of Paso Robles Public Schools.
An installation dinner is scheduled for Jan. 16 at the Paso Robles Inn.
— Julia Hickey