11 March 2010

Canyon Crest: New Owner, Old Questions, Part 2

The new owner of the Canyon Crest property on the Brea side of Carbon Canyon, proposed for 166 luxury homes on 367 acres, is the Old Standard Life Insurance Company (OSL.)  What exactly is OSL and what are its plans for Canyon Crest?

Courtesy of the Idaho Department of Insurance in a statement issued on 16 April 2009 is this:

Old Standard Life Insurance Company (OSL) was organized and incorporated as a stock life insurance company on November 7, 1988, and was domiciled in the State of Idaho . . .

OSL was a wholly owned subsidiary of Summit Group Holding, Inc., which was a wholly owned subsidiary of Summit Securities, Inc., which was a wholly owned subsidiary [doesn't this read like an Old Testament genealogy--So-and-so begat such-and-such, who lived 930 years, and who begat this-and-that, who lived 423 years, etc.?] of National Summit Corporation (collectively referred to as "Summit").  Both Summit and a sister company, Metropolitan Mortgage and Securities, which owned a sister insurer [a wholly owned subsidiary?], Western United Life Assurance Company, are now operating under confirmed bankruptcy plans resulting in the formation of creditors' trusts.  The Summit Creditors' Trust holds the majority of the beneficial interest in the stock of OSL, with Metropolitan Creditors' Trust holding a minority itnerest.  The creditor's trusts are both managed by Maggie Lyons.

The status statement goes on to indicate that, in March 2004, the Idaho Department of Insurance petitioned the federal district court for "an order of rehabilitation, which was granted by the court and which "was to help protect OSL's assets during the pendency of the Summit and Metropolitan bankruptcy proceedings, and to the give the OSL Rehabilitator an opportunity to evaluate OSL's financial stability and business operations."  That December, an amended order was issued, but the statement did not offer what constituted the changes brought about by that amendment.

The statement continued: "After extensive efforts by appointed deputy receivers disposing of assets and settling creditor claism, at the Director's request the court entered an order placing the company into liquidation on April 15, 2009."

As for what remained of this "life insurance company" a full five years after "rehabilitation" was ordered, here's what the statement offered:

OSL continues to be operated by its Special Deputy and Assistant Special Deputy, both retained by the Idaho Director of Insurance and appointed by the court.  OSL has no employees.  OSL reduced its support personnel to two part-time support persons and retained independent tax accounting, real estate and loan account servicing and asset disposition specialists.  Also, the Special Deputies personally handle the disposition of certain of the OSL assets.

It is also noted that "since the sale of its subsidiary Old West Annuity and Life (OWAL) along with OSL's insurance business, OSL has no policy-servicing needs."  Finally, the statement closes by noting that the company maintained the same Spokane, Washington office building it used when it went into receivership "but with a greatly reduced office size."

So, the new owner of Canyon Crest went into "rehabilitation" in 2004 and was subject to a court order of liquidation in April 2009 (looks like someone has a special anniversary coming up!)  The goal is to satisfy the needs and demands of the creditors' trusts set up for both Metropolitan Mortgage and Securities and for "Summit," the umbrella company for all of those wholly owned subsidiaries that it "begat."

It was reported to the City of Brea Planning Commission in December 2009 that OSL is going to pay the $138,000 in arrears left behind by The Shopoff Group/MRF Carbon Canyon, L.P. in its quest to "develop" Canyon Crest.  An obvious question is:  where is that $138,000 coming from when the company has been in a five-year bankruptcy proceeding and has been ordered into liquidation?

The bigger question is:  what does OSL hope to gain by restarting the Canyon Crest application process?

Answer in the form of an equation:  Approved application + tentative tract map that is good indefinitely = higher value of the land.  Higher value of the land = theoretically more viable possibility of sale = more $ for creditors who were #$%@!ed by OSL and Summit and Metropolitan.

Coming soon: the shocking tale of Metropolitan Mortgage and Securities, which will involve the SEC and the Department of Justice.  Hmmmm . . . .

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