Clark County District Judge Elizabeth Gonzalez dealt a blow Monday to a group of investors hoping to stop would-be developer Howard Bulloch from “restructuring” a $26 million loan that’s been in default for almost a decade. Gonzalez, who dismissed the plaintiffs’ case in part, will be holding a hearing on August 9th to consider remaining claims in the case.
Next month marks 10 years since Bulloch borrowed $26 million from some 450 investor/lenders through a loan brokered by Aspen Financial, the now-defunct hard money lending company owned by Jeff Guinn, son of former Nevada Governor Kenny Guinn.
With the interest payments rolled into the loan, lenders received their monthly checks for about a year, but then with the recession in full bloom, property values plummeting and Aspen unable to refinance yet another in a series of equity-eroding loans secured by the Strip frontage across the street from the Mandalay Bay, Bulloch defaulted.
Guinn’s Aspen Financial never foreclosed on behalf of its lenders nor pursued personal guarantees. Experts quoted in an FBI report say that’s likely out of concern for the scrutiny it would have drawn to Aspen’s loans and practices.
Bulloch’s series of “Desert Land” loans were among the deals that caught the attention of the FBI when it began investigating Aspen in 2009. A federal grand jury failed to return an indictment.
Now, the recovery is under way, Strip land prices are on this rise, the Las Vegas Raiders are planning a stadium nearby and Bulloch senses an opportunity for the land all tied up by that loan gone bad.
With the help of Guinn and former Aspen loan officer Tania Steffora, Bulloch says he was recently able to purchase more than half of the beneficial interest in the loan, giving him the right under Nevada law to “restructure” or be forgiven some $10 million in principal and more than $20 million in back interest. Many of the 450 investors accepted Bulloch’s offer of pennies on the dollar. But about 15 held out and sued.
How did Guinn, whose mortgage license was suspended by the state in 2013, solicit his former clients and help put Bulloch over the 51 percent threshold? The Mortgage Lending Division confirms such activity requires a license. I asked Guinn and his attorney, John Bailey, but neither responded to my email.
I also asked Bulloch’s attorney, Lt. Governor Mark Hutchison, who also failed to respond to questions about Guinn’s lack of license or queries about Hutchison’s own apparent conflict of interest in the case.
Back when the recession hit, Aspen hired Hutchison who formed numerous trusts involving many of Aspen’s defaulted loans. Hutchison eventually quit for non-payment, according to records I obtained.
How can Hutchison now represent Bulloch, an Aspen borrower, against the lender/investors he represented for Aspen?
Standing by for an answer, which I will pass on upon receipt.