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):

 
INVESTOR K-1’s

 

As a reminder, 2017 was the last year that investors were to receive K-1’s for their General Partnership investments. Below is the notification you were provided last year:

 

As you have previously been advised, you will no longer receive a K-1 or any other tax documents to reflect this or future distributions. The cash proceeds you receive may result in income/gain to you in the year you receive the distributions. Tax treatment of these distributions will depend on how you previously reported your investment on your individual income tax returns. If, for example, you wrote off your entire investment in 2017 or in prior years, distributions will be considered income in the year received. If you did not write off your investment in 2017, any distributions would be a return of capital up to your outside basis. Any proceeds received above your outside basis would result in income to you. If the proceeds you receive fall short of your outside basis, it would be a loss on your investment. This is a general statement and is not meant to replace your professional’s advice in this matter. Accordingly, please consult your tax advisor.

 

 

CASE UPDATES:

 

TAX DOCUMENTS, PROPERTY SALES, DISTRIBUTIONS AND OUTSANDING DISTRIBUTION CHECKS

 

Tax Documents
As discussed in our supplemental case update last month, the 2017 K-1s were final and no other tax reporting documents will be provided by the Receiver. If you had your investment in an IRA, please discuss any tax documents that you may need with your IRA Administrator.

 

Ongoing Property Sales
As indicated in the last update, we closed both Tecate sales (Freetrade/Suntec/Via 188 and Borderland/Prosperity) and are expecting the contingencies to be released on the Fernley sale shortly. We continue to have one open sale approval, with closing expected in March 2019. As previously planned, we have implemented various reductions to the list prices for the remaining properties. At this point, all of our remaining properties have been marketed since at least 2017 and most have been marketed since 2016. We are hoping the price reductions will help us to sell the remaining properties within the next 12 to 18 months.

 

Distributions
To date, there has only been one round of distribution checks, but since there are still remaining properties to sell, future distributions are expected. We do not yet know when future distributions will take place as it will depend when properties are sold and sufficient funds are accumulated in the receivership estate.

 

Outstanding Distribution Checks
We have put a stop payment on all outstanding issued checks. If you are holding onto an outstanding check, you will need to contact us to have a new check re-issued.

 

To date, only investors whose contact information is unknown are at risk of forfeiting their claims. Distributions that would have gone to the holders of forfeited claims will increase the pool of funds available for future distributions to those who have cashed their distribution checks.

 

Updated Contact Information
As always, if your mailing address or email address has changed, please send your current contact information to wfp@ethreeadvisors.com. 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 previously completed the following sales:

  • WFPC owned Silver Springs property – sold for $115,000
  • Reno Partners – sold for $32,000
  • Honey Springs Partners – sold for $240,000
  • Valley Vista Partners – sold for $240,000
  • Jamul Valley – sold for $520,000
  • Bratton View – sold at overbid auction for $265,000
  • Reno View and Reno Vista – sold for $75,640
  • Silver Springs North – sold for $700,000
  • Park Vegas – sold for $1,150,000
  • Production – sold for $4,000,000
  • Silver State – sold for $1,500,000
  • LV Kade – sold for $9,500,000
  • Dayton IV – sold for $300,000
  • Dayton II – sold for $305,000
  • International – sold for $39,000
  • Twin Plant – sold for $35,000
  • Tecate South – sold for $45,000
  • Stead I (42-Acre Portion) – sold to overbidder for $1,282,600
  • Las Vegas 2 – sold for $1,725,000
  • Washoe V – sold for $530,00
  • Dayton I – sold for $550,000
  • Freetrade/Suntec/Via 188 – sold for $149,000
  • Borderland/Prosperity – sold for $169,000

Expected Sales:

  • Washoe IV – sale approved for $350,000. Buyer has extended escrow to resolve some title issues, but has increased the earnest money deposit due to the delay.

 

 

FREQUENTLY ASKED QUESTIONS:

 

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”). The General Partnerships and underlying properties are included in the receivership.

 

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 (www.ethreeadvisors.com). The Receiver and his staff are happy to take your questions, however to reduce expenses, we ask that you check the FAQ or website first. Please direct inquiries to the Receiver to wfp@ethreeadvisors.com.

 

What are the next steps in the receivership? As ordered by the Court, the Receiver has pooled all GP bank accounts, closed out the GPs, and is in the process of selling properties pursuant to the Court-approved sale process. The Receiver completed the investor claims process and sought authority to make interim distributions to investors with allowed claims. That motion was granted on April 30, 2018, and interim distribution checks were sent to investors with allowed claims on June 12, 2018.

 

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Court Filings:

 

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Email Thomas C. Hebrank: wfp@ethreeadvisors.com