Las Vegas Sun

July 25, 2014

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8 investors look to join Aspen Financial lawsuits

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Hard Money and Hard Times

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Eight more investors are seeking to join one of the lawsuits accusing Las Vegas lender Aspen Financial Services of wrongdoing.

Represented by attorneys Nancy Allf and Angela Nakamura of the firm Gonzalez Saggio & Harlan LLP, the investors filed court papers last month seeking to intervene in a pending suit filed by Lois Levy and other investors against Aspen, which is run by longtime hard-money lender Jeff Guinn.

The investors seeking to join the action are Joanne Fairchild, Elizabeth Wagner, Dennis Manning, Linda Manning, Michael Mlynarczyk, Shirley Mlynarczyk, Jeffrey Mlynarczyk, and the Edward Mlynarczyk and Florence Mlynarczyk Trust.

The motion to intervene complains that Aspen failed to protect the intervening investors' first trust deed interests in three loans that went into default and are already at issue in the Levy case.

"Aspen did not foreclose on the properties, sue on the notes for the breaches or pursue the guarantors of the loans," the intervenors' motion to intervene says. "Instead, Aspen did nothing to protect intervening plaintiffs' rights in the First Trust Deeds and in fact, took affirmative steps to attempt to strip intervening plaintiffs of their rights, for the benefit of beneficiaries of second deeds of trust, also serviced by Aspen."

Clark County District Judge Elizabeth Gonzalez has not yet ruled on the investors' motion to intervene, which is opposed by Aspen on procedural grounds.

The first portion of the motion runs about 15 pages and is followed by hundreds of pages of exhibits.

But Aspen attorneys said: "Intervenors are required to attach their intervention complaint to their motion to intervene. Without setting forth the basis of intervenors' claims and allegations, the court and non-moving parties are unable to make an informed decision whether or not intervention is proper."

Aspen and Guinn, son of former Gov. Kenny Guinn, have denied they have treated investors unfairly in both the Levy case and another lawsuit filed by investors led by Donna Ruthe. Both suits are pending in Clark County District Court.

The disgruntled investors say their investments were mismanaged, that Aspen failed to disclose important information to investors and that Guinn and other Aspen executives engineered deals that generated fees and benefited Aspen at the expense of the investors.

Hard-money lenders like Guinn pool investors' money and loan it to developers who can't or don't want to obtain traditional bank loans. These loans typically carry higher interest rates than banks and, like banks, hard-money lenders have seen loan defaults soar because of the recession.

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