I hope this is read in the same spirit in which it is being written. As I once said, I have been reading this forum almost from the beginning. The sense of profound helplessness is overwhelming. The receiver’s first interim report gave an initial inventory of the assets and unfortunately it was not the most uplifting event for anyone. I have brought this situation to some other principals of my firm and we have brainstormed all week thinking on how we could help (if at all possible) soothe this terrible injustice. We have several ideas, including just let things unfold at the rate they currently are; but being an eternal optimist, I believe there is a solution that can be positive for everyone. Before I go on, you need to understand many things. 1) I am simply gathering input to see if our ideas would be acceptable to a majority of readers as a statistical sample. 2) There are many state and federal security laws that must be addressed. 3) No discussions have transpired with the receiver at this point and before any plan is placed in motion (if any), the receiver’s/court’s permission will have to be given. 4) Legal issues need to be resolved regarding ourselves as a successor company (We are not going to be involved with a battle with lawyers and regulators over problems that occurred before our watch) 5) Nothing said here is put in stone, as everything is in flux. The total assets and liabilities of Pinnacle are unknown at this time so nothing can be into motion yet, and may not be able to for the unforeseen future (if at all). With that said here are our thoughts on this matter:
Some of the problems that occurs with large financial fiascos is the fact that once discovered, a lot of funds are unaccounted, professional fees and the “fire sale” of assets eat away at the remaining funds, and the timing of a payout is unknown as litigation can cause it to be delayed, to mention a few. One of our solutions that addressed these issues worked like this: Assuming there are $66 million in investor funds backed by $26 million in “true assets”, that would be about 40% of value. For each $5,000 of investment that was made you would receive an initial ledger amount of $2,000 and paid 7% annually (paid quarterly) on that amount PLUS accrue interest at the rate of 10%. We can afford to do this because we can treat the entire $26 million as one big inflow of funds and we feel that we can generate 20%+ on this amount of funds giving our firm at least 3% of positive margin spread. (20% - (7% + 10%)). And because the 10% is a non-cash item until maturity, we have the liquidity to take our time and sell and deploy the current assets into the market. Sometimes timing is everything. As an ongoing business, we would also deploy the cash into assets that earn more than the current rate of return. All of these things taken together, make our job formidable, but within our risk parameters. It may take as long as 7 years but current income will be generated for the investors and everyone can be made whole over time. This description of the above process glosses over the details, the accounting issues, etc., but is does represent the thrust of the process.
Why would we do this? Many reasons. 1) We are genuinely good people and like to lend a hand where possible. We all believe in the “pay it forward” process of life. 2) We gain possibly 2000 new customers of which we hope a majority think positively of us after this ordeal is over. 3) Publicity and word of mouth could increase our business in other cities. 4) New city entry with ready made real estate, cash and a going concern business. 5) Quick infusion of assets offsets long period of acquisition through normal channels. 6) We believe we can make substantial money for ourselves over time.
Again, all of this is just at the embryonic stage at our firm. We may find after closer inspection that it becomes a regulatory nightmare to take over Pinnacle’s mess or you, the reader, do not want to be involved with another real estate company. But to start this process, I would like for you to email me at gmail.com with a general “Yes” or “No”, how much invested, what state you live in. (Of course, you may PM me if that is easier for you.) None of these answers will hold you to any performance of any kind. They merely give us a sampling of the prevailing attitude, the amount associated with the attitude, and the state which is important to ascertain the security law issues with our plan. I will tabulate the amounts and report them on 11/20/06 which gives 2 weeks for people to send me their inclination. And remember, this is all speculation at this time, so I am not going to answer specific questions with specific answers as that would be premature at this juncture.
(We will also be open to receiving your thoughts on how an investment plan of this magnitude could be made better for the investor, but we will solicit that information after we can ascertain if we are moving forward at all.)
Taxum raises good questions about net winners & diminishing returns to all investors based on any costs of forcing the issue with net winners if it comes to that.
Personally, I think is totaly appropriate to ask net winner to return excess cash back to the parternship. Were I in that situation, I would send back monies beyond my intital investments.
chemar22, I do have to say that concerns about tax handling, etc. are the issue of each investor, no matter how complicated. We all are in the same boat whenit comes to claiming a loss for this year & then realizing income from the return of our investments next year. This is not areason to simply let net winners keep excess cash.
Any net winners who took out an equity loan would have been able to pay it off, as by definition, they received more money back than they put in. If they still have a balance that was their choice, not mine.
moneypoint,
your thought process is creative & for that I salute you. However I am very concerned at the 20% return you feel you can achive and what sort of risk level is associate with that. You suggest the process may take 7 years. With inflation rearing its head, investors may be made whole on paper, but not neccisarilay in spending power over that time.
Additionally, you will have your work cut out for you convincing burned investors (this one included) to get involved with another company that we know nothing about.
In the end I would likely rather have 2K now and rely on myself to grow that into 5K to get back were I started. PDP investors are where we are now because we sought a passive investment. You state the need to take action in one breath, and then suggest a course that has investors in a passive position once again.
I agree with the opinions of all who have written here about the net winners. I'm just trying to look at the point of view from both sides of the fence. Regardless of how we try to recoup our losses, this will probably be a very long process.
As far as I am concerned, there are no net winners. Those with returns really have our principle money. It would be interesting to see how they would file their excess on their income taxes. I realize that some of them may have already spent or re-invest the money but the bottomline is that the money was not theirs to begin with.
As someone that lost $50,000. I was to receive my payback on Nov 13th. I am very interested in your idea..as for the $5000 person who is worried about a 20% annum return. That is the lowest I will even invest in as a full time investor..I do not find that at all risky especially vs. the 25% in 60 day deal you jumped on here!
I'm in al the way about using leverage with the assets recovered.
I agree, What have we got to lose?
Except what we've already lost :beer: :lol:
As for my email: it's my username at gmail.com. Sorry, for any confusion. [email protected]
I'll be honest. I always keep full control of my investments. No partners or investing in anything passively. I let my guard down with Pinnacle. I don't want to invest my money with anyone else.
Call me Mr. Once bitten twice shy.
Count me out on this one.
Has anybody received comfirmation from hays Financial Consultig on the investor claim form? They said, they will be sending out a confirmation on the mail letting the investors know that they've received the form. well I havent received anything yet and I sent mine out 2 weeks ago :crying:
Call me Mr. Once bitten twice shy.
Count me out on this one.
I feel all the investors have to stick together. We are all very concern of making the same mistake twice. Why do we not work with the receiver to see if he can give us some financial advice, as a whole? If we work together as a team, winners or losers we can overcome this. In numbers we are strong, as individuals we are losers, even the winners.
The person compiling the list of investors should begin to contact everyone. We should see where we stand. We need to nominate leaders and vote as a team. We also should have those leaders work very closely with receiver and keep us closely inform. If the receiver needs any help, we should all lend a hand.
Everyone, we are all real state investors and felt we were investing in a growing real state company, nothing else. We know real state is one of the best methods to grow our money, but PNP was not the company we assumed it was. Well, here we are. Are we going to cave in or take our situation to the next level? We do not need any outsiders telling us what to do.
Investor
As someone else said earlier, I'd rather take my $2000 now & be in control of it myself to grow it to $5000 in 7 years.
The receiver has the ability to go after 3rd parties & freeze their assets. In my opinion he seems to be thorough & doing a good job keeping us informed. I'm for letting him hopefully get me 40% or so of my investment back.
I'm out! I'll wait to get whatever $$ from the receiver & go on my way with my $$ in my control & invest it locally.
Thanx anyways for the offer.
One thing regarding net winners.. receiver, what is the initial estimate on how much that number is for "net winnings"??
Lets see how big a slice of the pie these "net winners" are holding of ours.
Again, Im not trying to put the net winners in a negative light, I just think they should give back the excess.
The receiver has the ability to go after 3rd parties & freeze their assets. In my opinion he seems to be thorough & doing a good job keeping us informed. I'm for letting him hopefully get me 40% or so of my investment back.
I'm out! I'll wait to get whatever $$ from the receiver & go on my way with my $$ in my control & invest it locally.
Thanx anyways for the offer.
Taxum
Are you saying you would be satisfied with less than 40% return? I am sorry, and with all due respect, I want to get 100% of my return, and nothing less. I am really sorry we are all in this, but we are in it together. I wish I had out as well, but I do not want to come out losing
I feel if we work together as a team we can get 100% return of our principal. There are a lot of family investors that cannot afford to lose any minute percent of their investment.
I am also in favor of all the winners returning their earnings since it was not earned legally.
Best wishes to all,
I find it concerning that people would be happy with"cutting their losses" and running. This is not the way to wealth, if as I would expect the reason most people who invested are after. If you want to go back to your "JOB" for the man...punch the clock for the man go ahead. I realize I will loose some and win some...But I will be damned to cut and run. If there is a way that I can help this "Team" of investors work together to get my $ back as well as theirs then here I am ready to go. It is not about being selfish. I will gaurantee you that if you put others first in business your rewards will be beyond your thoughts/dreams etc...
I hope we have enough overall winners here that want to stay together through this as a team!!!
Have a positive financial day!
I agree!! Cutting my losses and running is the last this I would want to do. If there's a way to get my money back, I'm certainly going to take it under consideration
I thimk I was misunderstood for your response had nothing but "I" in it. Please begin to use "our team of investors" or "us" or "we" can get our money back. My focus is for all of us! not just myself! that leads to the evils of money and seperation from each others strengths in this situation.
"We" can work together to have the best chance of getting "our" highest % of our money back.
Sincerely
Well,
I just have to say 7yrs to get 100% of our money back is a long time. I just feel getting my money now will make me feel better than putting it in the hands of an unknown person again. This is my 1st venture of investing and it took me 6mths to loss 6yrs of saving 30k. Good Luck to all of us, hopefully we get more than 40% of our money back and sooner than later
sammy... theres like $27mil or so in assets & $42mil owed!! thats at most(before fees & expenses of the estate) 64%.. how much clearer can it be that your not getting back 100%, none of us are..
the last thing I want to do is give whatever percentage I get bakc to someone else to hopefullt get it back in 7 years..
You're right Taxum,
The receiver told me himself that there's $42M owed back to the investors. There isn't enough $ to pay back all the investors 100% of their principle. Anyone who is hoping to get back all of their money needs to wake up. It's not happening. Even if we file a suit against O'Neal later on as a group effort, he'll just file for bancruptcy. I'm thinking after the lawyers, receiver, and everyone else is paid, we'll be lucky to see 25% of our investment back. :cry:
Yes, we have a deficit of about 15M. Hopefully with the help of the receiver we will be able to bring it down even further. If we stay focus and work together we can find ways to overcome this deficit. Think big, think deep, think positive. What are the ways we can legally come up with to overcome this deficit? Mr. Receiver, please help us come up with ways to reduce this deficit.
I only want the best for everyone. From the looks of it, we are all going to get short changed, especially if we think as individuals. I do not want to put anyone’s ideas down. If you feel you want to quit. I can’t stop anyone from feeling this way. Personally, I wish I had never found the News Paper ad for PDP.
I could just sit back and read everyone’s sad postings. As well wait and see how things finally evolve. Or I can plug my positive feelings to make the best of a bad situation. It will not hurt us to work as a team. Someone, whom is an investor please take the lead and organize everything. We can make it work for us.
Best of Luck to All,
A few items...
I have not yet received confirmation form Hays on my claim form. I sent mine certified mail & just tracked it. It was delivered 11/6/06.
AS I understand moneypoint's (AKA absolute) proposal,
Absolute is looking to make a 3% spread, commonly known as arbitage. The problem I see with this is they are relying on a 20% return in order to pay investors 7% annually on the book value of 40% of each investment. The other 10% return is projected to be paid somewhere down the line once absloute is able to sell off assets in a hopefully more favroable market. To answer the question "How much is absloute looking to make?" they are looking to make 3% of current liquid assets for their time and trouble.
for example: 10K investment = bookvalue of 4K. 7% is $280.per year
potentially 5 years later an investor would get most or all of their remaing 60% of investment back with another 10% return. Lets say absloute did pretty well and got this investor another 5K for all the land and other properties. total return 4K + $1400. + 1000. + 5K = 11,400 after 5 years.
That works out to a 2.8% annual return if all goes according to plan.
remember that you dont get the 4K right now either, absloute is puting it to work to pay the 7% and to make their 3% spread.
Again, I would rather take what Hays gets for us and put it to work myself. I am not happy with 40% of my investment either and I fully expect that I can get back to 100% on my own within the 5-7 years absolte is talking about. espicially when I consider that gains during this time would be tax free offest by the current loss.
Happy Election day to you all. I hope you had some successes today.
Tommr