Business

Biz Buzz: Request to extend investigation into Hurst Financial bankruptcy is denied

The bankruptcy judge handling failed Atascadero mortgage lender James Hurst Miller’s Chapter 7 case has denied a request by the trustee to extend the deadline for investigating Miller’s accounts.

Trustee Jerry Namba wanted more time to collect the facts so that he could build a case objecting to Miller’s request to have his debts erased, according to a motion filed at the end of May.

Miller put himself and his $100 million company into Chapter 7 bankruptcy protection in August 2009. His personal financial disclosures stated he had about $68,000 in assets and almost $10.1 million in debts. Creditors are claiming he owes them almost $82 million in a claims registry filed with the bankruptcy court.

Miller also stated his company had zero assets and liabilities when he filed last year. Claims by creditors against Hurst Financial filed in the claims register amount to about $5 million.

U.S. Bankruptcy Court Judge Robin Riblet made the determination because Namba has not yet found evidence of Miller having hidden any assets after an 11-month investigation of the case, said Los Angeles-based attorney Todd Frealy, who is working on behalf of Namba and the creditors.

Miller has denied any wrongdoing, although he is the subject of a criminal investigation by the FBI, the U.S. Attorney’s Office and a federal grand jury, according to court records.

Miller’s Hurst Financial provided money to borrowers faster than most banks but at higher interest rates, typically around 12 to 14 percent. Miller was able to finance his loans through thousands of private investors who invested in securities backed by real estate deeds.

Namba pointed out in court records that the U.S. attorney had seized funds from the profit-sharing accounts of Hurst Financial, and that the money had not been disclosed in the company’s schedules.

Miller has also been accused of fraud, racketeering and money laundering in a warrant issued by the U.S. attorney that stopped Miller from taking money from a sale of his home last year. However, Frealy has not been able to find new information on the status of the federal investigators’ case into Miller’s and his company’s finances.

Miller is also facing a lawsuit filed by more than 400 Hurst Financial investors that allege he defrauded them of almost $80 million. San Luis Obispo Superior Court Judge Charles Crandall is hearing that case today.

The trustee has a year left to complete his investigation and try to find assets for the creditors before Miller’s debts are discharged, Frealy said.

— Melanie Cleveland

Contractor class teaches new codes

The San Luis Obispo County Energy Watch Partnership is offering free training on the Title 24 Energy Code to assist local professionals in understanding the new requirements of the California Long Term Energy Efficiency Strategic Plan.

A training for heating, ventilation and air conditioning contractors will be from 8 a.m. to noon Friday, and a training for Home Energy Rating System Raters and architects will be from 8 a.m. to noon Tuesday.

Both meetings will take place at the Pacific Gas and Electric Co. Energy Education Center, 6588 Ontario Road, off Highway 101 south of San Luis Obispo.

The Energy Watch Partnership aims to promote energy efficiency and is a collaboration between city and county government representatives, PG&E, Southern California Gas Co. and the Economic Vitality Corporation of San Luis Obispo County.

— Tribune staff report

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