A court hearing to help determine how much money is left for restitution to victims of the Estate Financial collapse is set to resume today in Grover Beach.
The restitution would come from assets seized from the company and its top executives after they were sentenced to prison for fraud and the former Paso Robles lender went into Chapter 11 bankruptcy protection two years ago.
Estate Financial had collected $340 million from an estimated 3,000 private investors in real estate-backed securities before it started collapsing in 2007.
The company had offered its investors interest rates at 12 percent or more. Its president and vice president, Karen Guth, and her son, Joshua Yaguda, were sentenced to 12 and eight years in prison, respectively, for defrauding hundreds of its investors — most of whom are elderly — in a Ponzi scheme.
On Tuesday, the court heard a report from the county Probation Department that stated that many potential victims of the lending company have yet to respond to its requests for claimed losses.
The court will consider today the appointment of a receiver over certain assets, the accounting of money paid to Guth and Yaguda’s defense attorneys, a request for instructions by Cuesta Title — which holds about $14,000 in escrow — and a request from some lenders to release properties for foreclosure.
When Superior Court Judge Jac Crawford sentenced Guth and Yaguda to prison in December, he said he found the stories of Estate Financial victims “heart-wrenching.”
“Far too many victims ... made investments that changed their lives,” he said. “They have been forced to sell homes, give up retirement to take jobs, and have lost college funding for their children.”
Some investors who have followed the fate of their investments through the foreclosure process in the bankruptcy court say they are getting as little as 20 to 30 cents on the dollar.
Many of the investors who spoke to the judge at the Estate Financial trial are elderly or disabled; they told him they won’t live long enough to re-earn their losses.
Others said the experience of losing their money contributed to other life crises, such as poor health or depression.
The hearing is scheduled for 1:30 p.m. today at the Grover Beach branch of San Luis Obispo Superior Court at 214 S. 16th St.
— Melanie Cleveland
New Rite Aid opens today in Atascadero
Under construction since November, a Rite Aid store featuring a new design that the company says was based on customer feedback is opening in Atascadero today.
The store at 7025 El Camino Real is set to open to customers shortly after a 9 a.m. ribbon-cutting ceremony that is expected to draw company and Atascadero city leaders.
The 17,000-square-foot store will have an ice cream booth, photo service area with self-service kiosks and a pharmacy with drive-through service.
The existing Rite Aid, behind the new store in the Plaza Del Camino shopping center, is more than 20 years old, store manager Jim Barksdale said.
About 20 staff members moved over and two more employees were hired. The old spot has 21,000 square feet of vacant space for a new tenant. Information on who could move in has not been announced.
— Tonya Strickland
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Doggie Salon and Spa, owned by Lynn Holmes of Grover Beach, has moved from 272 Pacific St. to a bigger location at 175 Tank Farm Road in San Luis Obispo.
The spa opened in 1983, and Holmes bought the business in 2005. She plans to increase staff to five full-time employees from the current three.
— Julia Hickey