Scripps Investments & Loans 17 percent return didn't last

I assume that the courts are not going to do much here. First of all, it appears that there is no deep pocket to raid for repayment. Perhaps someone has other valuable insight into the latest action into the dismissal of the bankruptcy case. For investors in Scripps, I suspect the best use of your information and experience would be to share it with the California legislative committee that is investigating hard money asset lending. It seems that this topic has attracted plenty of folks who post and also think that the government must be interested in investigating people and businesses to a much greater extent than actually happens in real life. My guess is that the government authorities may have little interest in pursuing Scripps Investments and Loans at this point in time---other than in legislative discussions about changing the laws in the future. Such laws might help avoid potential abuse of individual investors in hard asset lending.
— July 19, 2011 11:15 a.m.

Scripps Investments & Loans 17 percent return didn't last

Investor prospectuses and other long-winded disclosures are rarely read. They exist because lawyers try to minimize lawsuits in case it goes sour. I would bet that fewer than 2% of these documents are read even with less-complex mutual fund products. If an investment is so complex that the investor barely understands the sources of cash flow, they should stay away. Chalk it up to lessons learned. I seriously doubt investors will recover much with Scripps. No info is emerging to contradict this assumption--at least as of this writing none has emerged.
— June 29, 2011 7:57 p.m.

Scripps Investments & Loans 17 percent return didn't last

@surfdog There are a lot of unanswered questions here. I suppose I could believe that Scripps principals were new and inexperienced in finding decent real estate investments. They certainly got in big. I don’t think we know much about them as shrewd real estate deal-makers just from the postings on this blog. As I see it, the investors in Scripps made a decision to supply money for reasons known at the time of investment. They may have consulted outside lawyers and accountants and performed some research or due dilly before taking the plunge. They may have been referred by friends or trusted experts. Perhaps some burned Scripps investor will post future comments on this blog on exact reasons why they bought in. Scripps principals must have made a pitch and provided some sort of documented literature with info how the deals worked in the past. Scripps could have even provided investors with documentation showing outside experts opinions on the deals –and-- called it “due diligence.” Eventually each investor came to that “magic moment” when they decided to plunge with Scripps. Think of it like buying a car. The dealer gives you facts about the car and you eventually decide to buy. When most people have made the decision on the exact model and color, they want it yesterday. There is new car "euphoria." This is typical of most investment decisions…too….I would bet that most investors who bought left the Scripps building feeling like they were the smartest guys or gals in the room---at the time. Scripps, from what I understand, seems to have sold itself somewhat like Madoff did, where one should have felt privileged to be wanted in an exclusive investment group. You became part of the club. It’s very powerful magic and investor common sense is therefore blown into the wind. The office at 484 Prospect was no doubt impressive to all (excepting Wal-Mart shoppers, of course.) Great marketers for sure at Scripps....whether or not they were inexperienced in hard asset real estate lending remains to be determined.
— June 29, 2011 11:33 a.m.

Scripps Investments & Loans 17 percent return didn't last

The article stated that there is ONE large judgement from the past. Was it a settlement and sealed by the court? Even if it contained damning evidence, it probably has zero effect on current investors. We still don't have anyone coming forward with specifics about how they wuz wronged. Plenty of speculation...that other investors have a legitimate claim.....but, so far, very few real facts.
— June 28, 2011 3:17 p.m.

Scripps Investments & Loans 17 percent return didn't last

Don, I haven't seen a smoking gun here. I have not read anything in your column or the comment postings that clearly shows "specific allegations" of wrongdoing. This would be information where an investor claimed they "were lied to" or "misled" or "cheated" about investing in Scripps or possibly where a deal was corrupted with developers that borrowed from Scripps. Maybe you have heard this type of "scam" allegation --off the record-- that you have not reported here--but it sure isn't visible or obvious. If this goes into a federal bankruptcy proceeding and no one comes forward with specifics it will die. Is there any money left for investors to recover here? It's a sad story. Investors might just be out of luck. This isn't like the Madoff case where the receiver has/will recover 75% or more. As you know, financial fraud cases are complex, time consuming, and typically difficult for a jury to understand. Unless someone is caught red-handed with incriminating and indisputable evidence and pleads guilty AND offers to cooperate to prosecute the top people--- it won't go to court. No doubt the big law firms like Girard and Milberg, that specialize in class actions, are monitoring potential articles and blog comments looking for a case. They probably read this blog. So far, I haven't heard of any class action in process and wonder if it is just not worth the effort because there are no deep pockets involved with Scripps left to pursue. If First Regional Bank is implicated as custodian, for example, there is nothing to recover by suing the FDIC....a waste of time.
— June 28, 2011 10 a.m.

Scripps Investments & Loans 17 percent return didn't last

Almost every investment that I know of that carries an expected return above 15% also is accompanied by a risk that the investor might get zero and no return of principal. Anyone who seeks 17% in a Scripps deal any thinks they share no blame might be a bit naive. Real estate was crazy and lots of folks happily drank the kool-aid. If you were misled, lied to, or otherwise cheated you may well be a victim to some unknown extent. Eager pursuit of above market yields doesn't necessarily produce victims when the deal goes sour.
— June 27, 2011 3:06 p.m.

Scripps Investments & Loans 17 percent return didn't last

Back to the original script here, which I think was Scripps Investments and Loans….wasn’t it? I am a bit troubled by the postings that seem to implicate them as a "scam." There simply isn’t any evidence being written about here that would justify this accusation. I think “madatscripps” confirmed the great sell job and the impressive facilities which were used to bring investors into the act. Car dealers have some great salesman too. So does Sears appliance dept. This is not enough to implicate anyone. It also appears that each Scripps investment was a separate deal based on the specifics of the location. There are a great many questions on how investors exactly got drawn in to a particular deal. What the circumstances of the deal’s merits at the time the loans were made? Were shaky promises made? Does anybody posting here really know? Hindsight is easy...of course....nobody has said if these deals actually lacked potential or were "dead-ducks" from the get-go. I personally wonder about some terrible real estate deals in Nevada, but it is hard to make conclusions without more facts. It’s probably going to a bankruptcy court to authorize an aggressive bankruptcy receiver to delve exhaustively into each deal that went bad and then to make a judgement about the impact of each of these separate transactions on the parent entity, which I believe is called Sili Inc. A court might not even bother unless there is a decent chance of meaningful recovery for creditors (or investors.) Possibly, one could argue that Scripps was actually selling “securities” because the loans were split up among different investors….but it might not matter if there are no deep pockets to access for damages. Facts are hard to come by....speculation is growing....the real story about Scripps is yet to be told, in my humble opinion.
— June 27, 2011 10:49 a.m.

Scripps Investments & Loans 17 percent return didn't last

Investors caught in the Scripps mess might want to check out the "hard money industry" investigative reporting done by the Sacremento Bee newspaper. One excellent article appeared on June 6. Hard money lending is apparently state regulated to some degree. In CA, the Bee reports hard money lenders fall between the cracks of two state departments Real Estate and Corporations and there were some 340 hard money lenders in CA at the peak in 2005. My guess is that most were far smaller than Scripps and did not have the same level of money raising skills. In any event, the Bee reports that the CA legislature has been reading about these fiasco investments, which apparently tend to prey on less-sophisticated older investors seeking higher yields. A June 16 article in the Bee describes this lawmaker concern and plans to hold hearing and/or investigations. If you invested in Scripps deal that went sour, and have valuable input, it might be a good idea to contact your legislator--just to let them know of the extent of problems and issues with hard money investments. (On a different subject, it is amazing to see some Reader comments from “drive by” experts on Scripps decorating. Do they profess to know the difference between the $5000+ gemstone globe mounted in a unique wood base as shown in the video at 484 Prospect-- compared to a cheap copy apparently sold at WalMart? I guess I can only conclude these “drive-by” commentators of the Reader must know much more about what can be bought at WalMart than most LaJolla decorator/collectors!!!! )
— June 24, 2011 8:50 a.m.

Scripps Investments & Loans 17 percent return didn't last

The building at 484 Prospect was reportedly financed with a big mortgage issued by LaJolla Bank. Of course, LaJolla Bank later failed in early 2010 and was taken over by the FDIC. It seems that Scripps Investments must have had a "field of magnetism" surrounding 484 Prospect that successfully attracted zombie bankers.
— June 23, 2011 8:30 a.m.

Scripps Investments & Loans 17 percent return didn't last

WOW. Look at these digs at 484 Prospect. Someone shot a you-tube video and posted it on the web. http://www.bubbleinfo.com/2011/03/04/per-public-r… If I were a prospective investor that was visiting Scripps Investments, I would be more than just impressed. ( Hell-- I might even give them some money to invest-- even with the hindsight I now have. My ego would be puffed even if my pocket book was emptied!!!) These guys had to be great marketers even if they were not as smart as once thought on real estate deals. They got one of the most impressive offices to knock the sock off of prospective investors along with a prestigious San Diego/LaJolla name. This stuff will suck up a prospective investors ego as fast as anything. Any broker in the country would give blood to be allowed to invite someone into the 484 Prospect environment. The furniture is beautiful. They had good taste. I am most impressed by the facility. If they only could have duplicated the same quality in the bum real estate deals they did!!!! I wonder if this and probably some other yet unknown life-style perks is what Scripps investor money actually funded??
— June 22, 2011 9:56 a.m.