SEC v. Louis V. Schooler and First Financial Planning Corp d/b/a Western Financial Planning Corp

Case Summary:

On September 6, 2012, Thomas C. Hebrank of E3 Advisors was appointed temporary receiver for Western Financial Planning Corporation and the entities it controls, including the general partnerships (“Defendants”), pursuant to an Order entered by the United States District Court for the Southern District of California in an action against Defendants filed by the Securities and Exchange Commission.

Document Links (PDF Format):

Case Updates:




Pooling of Receivership Assets
In 2016, the Court ruled that the assets of the receivership estate are to be pooled, and investors with verified claims are to receive a pro rata distribution from that pool of funds. Specifically, this means that your allowed claim amount is more important than which property you invested in, since you will receive distributions from the common pool of funds generated from the sale of all receivership properties.


General Process
As we are making progress in selling properties, it is important to plan for the distribution of sales proceeds to investors. Therefore, an allowed claim amount must be established for each investor. A claim is determined by adding all of the money invested by each investor and subtracting any cash received for those investments. If you have more than one investment, all investments will be aggregated into a single allowed claim amount.


Once an allowed claim amount is determined for each investor, all claims must be approved by the Court. We anticipate filing a motion with the Court seeking approval of all claims this fall. Once the claims are approved, all allowed claim amounts are set and will not be changed.


Claims Letters
Claims letters have been sent to investors and the deadline to object to the allowed claim amount has passed. The purpose of the letter was to show you what Western’s records reflect in terms of your investments and to provide you an opportunity to dispute or correct those records by providing us with supporting documentation. To be clear, the amounts shown in the letter do not represent the amount that you should expect to receive in future distributions. For the small number of investors who provided a written dispute to their claim, we will work to resolve those differences over the next month. If a dispute cannot be resolved, we will individually explain the dispute to the Court and ask the Court to determine the allowed amount of the claim.


After reviewing the claim letters, many investors have asked about the amount and timing of distributions from the receivership estate. To provide some brief perspective on the total amount of claims and the cash available to distribute, it is important to note a few facts that have previously been reported and discussed in this case:

  • Western Financial Planning raised approximately $160,000,000 from investors.
  • The Court found that, at the time the properties were transferred from Western Financial Planning to the GPs, the aggregate value of the properties was approximately $16,328,000.
  • Of the funds raised from investors that were not used to buy the properties, 93% went to Western and was used by Western in various ways, including paying large sums to Louis Schooler or for his benefit. The other 7% went into GP bank accounts and was used to pay expenses associated with holding the properties (mortgage payments, property taxes, insurance, preparation of GP tax returns and K-1s, etc.).
  • The aggregate value of all the properties in the receivership estate (using the latest available appraisal/consultant/broker estimates and sale prices) is approximately $25,000,000.

Even though the value of the land has increased by approximately 40% when you compare the estimated aggregate value when the properties were transferred to the GPs to the estimated aggregate value today, because of the vastly marked up prices paid by investors, the sales of the properties will never generate enough in net proceeds to pay investor claims in full. Based on our most recent valuations and projections, we estimate investors will recover between 10% and 15% of their allowed claims.


Timing of Distributions
The cost of processing distributions reduces the amount that is otherwise available to distribute. Therefore, distributions will be made when sufficient properties have been sold and net sale proceeds generated to make a distribution to all 3,400 investors is cost-effective. In addition, the Court will need to approve the Receiver’s proposed distributions. We anticipate making distributions on approximately an annual basis, as sufficient funds are available. The timing of final distributions will be based on the timing of the sale of all of the properties.


IRA Investments
For those investors who have their investment through an IRA:
 Self-directed IRA investments are required by the IRS to have a third-party IRA Administrator and the fees that you pay to them are for their annual reporting of your investment to the IRS. Those fees are not capital contributions and are not part of the expenses recoverable from the receivership estate. The receiver has no ability to change or waive the fees that your respective IRA Administrator charges you for their services. Your IRA administrator is not part of the receivership, and neither the Receiver nor the Court has any jurisdiction over this area.


You may want to consider discussing an in-kind distribution with your tax professional and your IRA Administrator. An in-kind distribution closes your IRA account and is a taxable event at the fair market value of the investment. For most investments, the fair market value is very low, and this number has been reported to your IRA Administrator already. Once your IRA account is closed, you will no longer have to pay fees to an IRA Administrator. Your distribution will not be affected by an in-kind distribution. The Receiver cannot provide individual tax advice and suggests speaking to a tax professional about questions on your personal taxes.


Proposed Closure of the Partnerships
In light of the pooling of receivership assets as discussed above, and as discussed in the Receiver’s 19th Interim Report (which is also posted to the receivership website), the Receiver will be proposing to close the GP entities. The reasons for the proposed closure are two-fold. First the preparation of tax returns and K-1s on an annual basis is a significant expense – over $100,000 annually – that reduces the amount otherwise available to distribute. Closing the entities will eliminate this cost and make those funds available for eventual distribution to the investors.  Second, closing the GP entities will allow investors to begin exploring options to take tax write-offs on their anticipated investment losses. The Receiver cannot provide individual tax advice and suggests speaking to a tax professional about the effect of the proposed GP closures on your personal taxes. The official closure of the GPs, if authorized by the Court, should allow you to begin exploring these options in earnest.


Updated Contact Information
As always, if your physical address or email address has changed, please send your current contact information to If you are not receiving monthly case updates, you can sign up for them using the link at the bottom of this page.


Status of Property Sales
The Receiver has thus far completed the following sales:

  • Reno Partners – sold for $32,000
  • Honey Springs Partners – sold for $240,000
  • Valley Vista Partners – sold for $240,000
  • Jamul Valley (Jamul Meadows, Hidden Hills, Lyons Valley) – sold for $520,000
  • Bratton View – sold for $265,000
  • Reno View and Reno Vista – sold for $75,640
  • LV Kade – sale for $9,500,000 approved by the Court and expected to close in November 2017


Case Updates:


Court Order re: Receiver’s Proposal to Conduct Orderly Sale of GP Properties & Approval of Distribution Plan


The Court held a hearing on the above referenced motion on May 20, 2016.  On May 25, 2016, the Court issued its order, which can be found at this link: LINK: Order Granting–Denying–Motion for Authority to Conduct Sale of GP Properties & Aguirre’s Motion for Trial


In summary, the Court ruled that (1) the Receiver shall file a proposed modified orderly sale process to incorporate a public sale component in compliance with 28 USC § 2001 within 14 days); (2) the Receiver shall submit a report and recommendation with the Court within 180 days, evaluating the pros and cons of the Xpera Group’s recommendations that can feasibly maximize the value of the receivership estate; (3) it would be inequitable and impractical to allow the GPs to exit the receivership; (4) allegations that the Receiver was behaving unethically or irresponsibly are without merit; (5) the Receiver shall refile his Fourteenth Interim Report and file a final fee application at the end of the case consistent with the SEC billing instructions, including the Standardized Fund Accounting Report; (6) any newly created investor entities that seek to purchase GP properties may utilize their projected distribution amounts as a component of their bids; (7) the Receiver’s proposed “one pot” distribution of receivership assets is approved; and (8) the Receiver’s proposed distribution plan and proposed procedures for the administration of investor claims are approved.


We encourage you to read the Court’s order in its entirety.  We will be providing additional details and information as it becomes available.


Please note that as a result of the approval of the one pot distribution proposal, assets of the receivership entities (Western and the GPs) have been pooled together, past due taxes and other property expenses will be paid from pooled funds, and investor note payments owed to their GPs will no longer be collected.


Case Updates:



The Court has ordered investor information packets to be prepared for all of the Western GPs, as soon as updated appraisals or other valuation information has been received. As this information becomes available, the property name and associated GPs will be listed below. The name will contain a link to that particular information packet.


1. Bratton Valley Property – Valley Vista, Bratton View & Honey Springs Partnerships
2. Dayton I Property – Dayton View, Fairway, Green View and Par Four Partnerships
3. Dayton II Property – Storey County, Comstock, Silver City, Nevada View Partnerships
4. Dayton III Property – Gold Ridge, Sky View, Grand View & Rolling Hills Partnerships
5. Dayton IV Property – Eagle View, Falcon Heights, Night Hawk & Osprey Partnerships
6. Fernley I Property – Crystal Clearwater & High Desert Partnerships
7. Jamul Valley Property – Jamul Meadows, Lyons Valley & Hidden Hills Partnerships
8. Las Vegas I Property – Park Vegas, Production & Silver State Partnerships
9. Las Vegas II Property – Rainbow & Horizon Partnerships
10. LV Kade Property – Hollywood, BLA, Checkered Flag and Victory Lap Partnerships
11. Minden Property – Carson Valley, Heavenly View, Sierra View and Pine View Partnerships
12. Santa Fe Property – Santa Fe View, Pueblo and Pecos Partnerships
13. Silver Springs North Property – North Springs, Rawhide, Highway 50 & Orange Vista Partnerships
14. Silver Springs South Property – Rail Road, Spruce Heights, Vista Del Sur & Lahontan Partnerships
15. Stead Property – P-39 Aircobra, P-40 Warhawk & F-86 Partnerships [Updated]
16. Tecate Property – ABL, Mex-Tec, Borderland, Prosperity, Freetrade, Suntec, Via 188, International, Tecate South, Twin Plat & Vista Tecate Partnerships
17. Washoe I Property – Reno View, Reno Vista & Reno Partnerships
18. Washoe III Property – Spanish Springs, Antelope Springs, Wild Horse and Big Ranch Partnerships
19. Washoe IV Property  – Rose Vista, Steam Boat, Galena Ranch and Redfield Heights Partnerships
20. Washoe V Property – Pyramid Highway 177 & Frontage 17 Partnerships
21. Yuma I Property – Gila View, Painted Desert & Snow Bird Partnerships
22. Yuma II Property – Desert View, Sonora View, Mesa View and Road Runner Partnerships
23. Yuma III Property – Mountain View, Ocotillo, Cactus Ridge & Mohawk Mountain Partnerships




On May 19, 2015, the Court granted the SEC’s motion for partial summary judgment and ordered Defendants Schooler and Western to disgorge $136,654,250, plus prejudgment interest. Enforcement of the order is outside the scope of the receivership and will be handled by the SEC.


On January 21, 2016, the Court granted the SEC’s motion for injunctive relief and monetary remedies against Mr. Schooler and ordered disgorgement in the total amount of $147,610,280, representing profits gained as a result of the conduct alleged by the SEC. Attached is a link to the Court’s Order.


Order Granting Final Judgment and Monetary Remedies





Who is the Receiver? Why was there a Receiver appointed? Thomas C. Hebrank was appointed by the Federal District Court on September 6, 2012. The Receiver was appointed after a complaint was filed by the Securities and Exchange Commission against Louis V. Schooler and First Financial Planning Corp. dba Western Financial Planning Corp. (“Western”). Your partnership was created by Western and is one of the subjects of the ongoing litigation between the SEC and Louis Schooler.


Who can I talk to about my investment? You can periodically visit the Receiver’s website for additional updates as far as the case, Receiver’s Reports and other legal filings ( The Receiver and his staff are happy to take your questions, however to keep expenses low we ask that you check the FAQ or website first. Please direct inquiries to the Receiver to


What are the next steps in the receivership? As ordered by the Court, the Receiver has pooled all GP bank accounts, and is in the process of retaining a real estate expert to supplement the work of the Xpera Group and to advise the Court and Receiver regarding certain recommendations for the properties made by the Xpera Group. An attorney for a minority group of investors has filed an appeal of the Court’s Order re: Receiver’s Proposal to Conduct Orderly Sale of GP Properties & Approval of Distribution Plan, and has opposed the sale of certain properties that were in process or near completion. The Court has scheduled a hearing for September 6, 2016 to address these issues.



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