Case Studies

Dotan Y. Melech of United AMS was appointed as Receiver on January 26, 2011. Upon appointment, the Receiver analyzed the guarantor’s historical financials in order to determine inefficiencies, as well as establish a revenue baseline. Upon takeover, both assets were performing at less than 65% occupancy (Avg.), with more than 65 employees and a negative monthly cash flow. Within 90 days from appointment, the Receiver reduced operating overhead by more than 50% (less than 30 employees), increased revenues (actual and projected) by more than 50% (from $35/night to over $50/night), and turned an under performing asset into a business with positive cash flow. Furthermore, as per the reported financials provided by the guarantor, the assets showed over $2.5 million loss in 2010, however, per the Receiver’s pro-forma, once stabilized, the assets’ NOI for 2011 exceeded $2.5 million (a swing of over $5 million). On May 15, 2011, the Receiver successfully facilitated the sale of the Emerald Suites Cameron asset (96 units), at the trustee sale auction for over $3 million in cash, and turned over the Emerald Suites South (396 units) asset to Bank of America’s OREO West division on July 15, 2011. The larger of the two assets was turned over to the lender with an approx. 75% average occupancy rate and over $120K in monthly net cash flow. Per Bank of America’s OREO West Senior Asset Manager, the larger property was operating at approx. 80% occupancy with an estimated yearly NOI of over $1.8 million. Furthermore, at the end of the Receivership period, the Receiver wired to Bank of America SAG, the remaining “recovery” funds in the amount exceeding $600K for both assets after all property expenses were paid. In summary, this case study demonstrates United AMS’ ability to handle large, difficult, negative cash flow assets and their ability to implement creative and efficient strategies with a hands-on approach, and in a very short period of time, turn them into profitable businesses, which consequently increases the debt recovery for the lender. The total actual recovery for both assets exceeded $22 million (73%) post Receivership, whereas pre-Receivership, the recovery was estimated (after charge-off) at less than $14 million (47%). Case studies.

Dotan Y. Melech of United AMS was appointed Receiver on 2.12.10. This property consisted of 319 low-income units and was operating at a mid to high occupancy rate and a very high turnover rate at takeover. The Receiver and his team at United AMS analyzed the financial records, onsite operations, assessed tax credit compliance requirements, and developed a plan within 60-days from takeover, to stabilize the asset. As indicated, the property was required, per the loan documents, to meet very high standards of tax credit compliance. The Receiver overcame these challenges and alleviated the liability associated with this by preparing the property for the May 2010 Department of Business and Industry ‘Housing Division’ audit, which was passed due to the extensive work and preparation of the Receiver’s team in files auditing and facilitating and preparing for, property inspections. Security, cash management and front desk operations were a tremendous challenge and presented numerous issues for the property. Consequently, the Receiver implemented a security and interdiction plan for the property, as well as staffing the front desk with qualified personnel. Additionally, the Receiver put in place and oversaw a detailed cash management procedure, installed/repaired the onsite surveillance equipment, and utilized Brinks Armored Car cash pickup services for cash pickup and deposit; therefore, revenues and overall financial performance improved notably. The property was stabilized and was brought up to good repair and condition during the receivership, despite the difficulties that needed to be overcome due to the type of tenants at the property. At takeover the approximate occupancy of the property was 92%; however, due to the high rate of non-paying tenants the Receiver evicted during receivership, the occupancy at the end of the receivership period was 82%, although revenue increased and was maintained thru June 2010. In June 2010 the property was foreclosed on by Citibank and United AMS, due to its extensive Asset Management experience and overall performance during the Receivership period, was contracted by Citibank to continue on as Asset Manager until April 2011 when the property was sold to a third party for $4.7 million, introducing a 59% recovery for the Lender, which considering the risk and liability levels with this type of asset/loan, exceeded the lender’s expectations. Case studies.

Dotan Y. Melech of United AMS was appointed Receiver on 5.10.11. The property was an 11-building office park that was in fair condition at takeover. Upon appointment, the property was at an approximately 55% occupancy, which was maintained during the receivership without further loss of tenants (although several tenants requested lower rates during the course of the receivership). The Receiver had to overcome complications imposed by the Probate Court (due to the borrower’s passing prior to the receivership appointment) in the case, and coordinate the takeover as well as the liquidation of estate assets, security deposits dispute, and other miscellaneous liabilities created by the borrower and administered by the probate Trustee. Additionally, the Receiver negotiated a settlement with the Trustee related to the security deposit liability, and consequently, reduced the asset/lender’s liability. The borrower had organized an HOA for the asset, which was taken over by the Receiver and later transferred to the new owner. Including the many obstacles that were presented during Receivership, the estate suffered vandalism and theft on the property. The Receiver implemented a cost effective plan to secure all the individual buildings from encountering the same damage, ultimately saving the estate from further economical loss. During the course of the receivership, the estate was maintained and the Receiver was able to operate the property without shortfall in operating funds. Furthermore, the Receiver was able to make cash distributions to the lender post receivership. The property was foreclosed on 11.23.11 and US Bank requested that the Receiver stay on under the capacity of Asset Manager and a separate agreement was entered into with the bank. United AMS was an integral part in facilitating the sale of the property by assisting the bank and the listing broker and coordinating the sale that took place on 6.20.12. The asset sold for $3 million providing an estimated 45% recovery to the lender post foreclosure. United AMS’ Team worked tirelessly with the buyer to facilitate the due diligence and the transfer of title, and was an important contributor to the overall success of this asset. Case studies.

Dotan Y. Melech of United AMS was appointed Receiver on 9.17.12. The asset consisted of 384 self-storage units and was owned/managed by an out of state (absentee) operator. Upon takeover, the Receiver interviewed the onsite staff and, on a case-by-case basis, hired the qualified onsite management team as independent consultants. By doing so, the Receiver was able to maintain continuity of the positive trends, while evaluating and developing strategies to address any and all deficiencies in operations. A deferred maintenance plan was established and implemented shortly after takeover, although needed repairs were minimal. Furthermore, a detailed accounting tracking system and cash handling procedures were put in place, and the Receiver, in a very short period of time, generated a comprehensive report, which was distributed to all parties, regarding the asset financial performance, budget and operations. The Receiver’s due-diligence, information gathering and reporting allowed the lender to determine its liabilities, strategies, and foreclosure schedule. During receivership the occupancy was maintained, the property cash flowed and the Receiver was able to operate the property without shortfall in operating funds. Consequently, approximately 90-days from takeover, on 12.27.12, the lender foreclosed on the asset and is currently holding it as an REO, with the objective to potentially increase its recovery due to improved market conditions, replacement cost deferential, decreasing supply and increasing demand for this product type. Upon foreclosure, the Receiver facilitated a smooth transfer of assets, data, and management duties to the lender and their assignee.

United AMS’ Team of professionals’ experience and expertise goes beyond Rents & Profits Receiverships. The case studies listed below demonstrate our Team’s ability to administer cases involving businesses, dispute resolution, asset liquidation (other than real estate), agriculture and general business consulting. Case studies.

Dotan Y. Melech of United AMS was appointed Receiver on 4.12.12. In his case a creditor (Plaintiff) was attempting to collect debt (judgment) from the debtor (Defendant) and was successful in obtaining a court order to appoint a Receiver on the operating business, which was an auto mechanic shop and car accessories retail store. Upon appointment, the Receiver developed management and security plans to manage the ongoing business and took over the operations. This complex business operation involved a substantial amount of cash transactions, as well as unique vendor relations for the supply of second-hand, refurbished products. Shortly after takeover, the Receiver determined, and recommended, that the cash flow from operations was insufficient, that it was a diminishing return to operate the business and that the best route was the liquidation of all business assets. The Receiver successfully liquidated the assets and closed the business operations in order to minimize future liabilities to the estate. Case studies.

Dotan Y. Melech of United AMS was appointed Receiver on 1.4.13. This asset consists of approximately 25 acres divided to three parts: farmland, vacant/parking (rough), and a 10,000 SF storage building. Upon appointment, the Receiver secured the assets and requested any and all agreements/contracts with current tenants/subcontractors from the Defendant and the tenants. Shortly after takeover, the Receiver obtained a customized insurance policy (covering all aspects of the asset, including an onsite well), and commenced negotiation to lease the vacant buildings. Furthermore, the Receiver continues to manage the existing tenants, farming and parking to a state contractor, and caters to their needs. The Receiver continues to evaluate options and strategies to maximize revenues, as well as work with local authorities the find the highest and best use of the asset. Case studies.

Dotan Y. Melech of United AMS was appointed as Receiver on June 03, 2016. Upon appointment, the Receiver analyzed the company’s historical documents in order to determine the allocation of assets owned or sold by the defendant. Upon takeover the Receiver initiated asset searches in all states to find any unknown companies, accounts, or assets in the name of the main defendant. After diligent searching and the location of various assets, The Receiver subpoenaed banks, merchant accounts, and vendors all affiliated with the defendant and DMA Financial in order to gather accurate historical information on all accounts. The Receiver later hired a third party forensic accountant to use gathered information to locate missing funds invested into DMA Financial. Next, the Receiver mailed out letters to known investors and created postings in the Las Vegas Review Journal for all unknown creditors to submit their proof of claims. After Receiving all claims and compiling total credit amounts, The Receiver hosted a meeting of creditors to inform all creditors of DMA financial and affiliated companies of the current situation. The forensic accountants were unable to locate any missing funds, potentially resulting in a low recovery. The Receiver created the idea of White Knight Financial, a new online loan company monitored by The Receiver that would repay creditors over time in dividends based off their principal claim amount. White Knight Financial has been approved by the court and is in its final steps before launching. Later, the Receiver sold various pieces of land owned in the defendant’s name in order to recover some value to the estate. The DMA building located on 2920 N Green Valley Parkway and land found in Parowan, Utah was approved for sale and sold for [INSERT VALUE HERE]. The Receiver is now currently focusing on White Knight Financial with high expectations to recover assets for creditors. Case studies.

Dotan Y. Melech of United AMS was appointed as Receiver on January 11, 2017. Upon appointment, the company was not profitable and Bank of America was looking to simply liquidate assets and close the company. After being appointed, the Receiver promptly looked over past financial documents, took a personal inventory of the store, and created their own budget for the company to operate on. In the budget, the Receiver made multiple changes that drastically affected operations at The Gun Store. First, the Receiver reduced fixed costs by stopping operations in one of the two buildings and putting it up for sale. Following this property downsize, the Receiver reduced payroll expenses for the company. Next the Receiver started charging for services that were missed opportunities during previous operations, such as conceal carry permits and training classes. Following these changes, The Gun Store quickly showed positive signs of life and was no longer operating in the red. Since then, multiple offers have been received about the potential purchase of the gun store. The Receiver is still continuing efforts to improve the company and make it as efficient as possible until the purchase or closing of the estate. It is through the professional experience of the Receiver and his team that The Gun Store will be able to help customers with their firearm needs for the foreseeable future. Case studies.