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delicate dance is underway as the fate of 76 properties hangs in the balance. While some may be eager to see them hit the market, a more measured approach is being taken to avoid flooding the market and forcing discounts on these valuable assets.
At the center of this cautious strategy are the parcels owned by KS Mattson Partners, which were recently at the heart of a hearing in Novack's Oakland courtroom. Attorneys for LeFever Mattson argued that KS Mattson Partners' ability to sell real estate should be frozen until Novack rules on the Chapter 11 bankruptcy case.
The concern is that without such an order, Ken Mattson and his company could transfer assets outside of the ordinary course of business, potentially depriving hundreds of investors of the money they're owed. A Sonoma property listed for $2.779 million was cited as a prime example of this risk.
As the hearing unfolded, speculation mounted about KS Mattson Partners' intentions. Stacy Mattson and one of her adult children were hosting a yard sale at the very same property, fueling rumors that the company might be trying to raise cash quickly.
Judge Novack pointed to recent reporting by The Press Democrat, which included statements from Fairbank that suggested an improper intent to pay some creditors but not others. Lawyers for Ken Mattson and KS Mattson Partners countered that they expect the latter to enter into voluntary bankruptcy in early May, arguing it was unnecessary to freeze assets before then.
Fairbank estimated that KS Mattson Partners would need between $500,000 and $750,000 to make this happen, leaving some to wonder where this money would come from. Ken Mattson's attorneys noted that he has hired the Stapleton Group for oversight, which aims to maximize recovery for creditors and turn around troubled businesses.
In the end, Novack issued an order prohibiting both Ken Mattson and KS Mattson Partners from transferring any real estate or personal property for one week, with a limit of $15,000 on allowable transfers. As one attorney quipped, "I'd reduce the threshold because $15,000 buys a really good Rolex watch."
