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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (99098)	1/5/2008 9:36:04 PM
From: Cal Amari	Read Replies (1) \| Respond to of 306849

Are you referring to the Irvine Company and Donald Bren? en.wikipedia.org I grew up in Irvine and lived there in the 70s and 80s.

To: neolib who wrote (99098)	1/5/2008 10:37:27 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

Let's correct your false imagination of how the world works. Don Brenn, one of many who bought the Irvine Company, got lucky because he was the first dupe Joan Irvine could talk into the proposition. Joan and her mother Athalie Smith were obtaining a pittance as beneficiaries of the Irvine Trust. She successfully lobbied Congress to pass a law requiring trusts to distribute a minimum percentage of their assets each year - the same law which forced the Hughes Trust to sell off their businesses. The Irvine Trust decided to sell their holdings to Mobil Oil. Joan Irvine sued for a stay of action and she was give a year to find a new buyer. She found Don Brenn to be the most pliable front-man. Unable to obtain loans to finance the deal, Brenn arranged equity financing from shopping center developer Al Taubman and a number of his friends. The equity backing and guarantees from these billionaires finally led Wells Fargo and a consortium of banks to make run-of-the-mill real estate loans on each "statistical area" of roughly one square mile each. Once the deal was closed, Brenn's consortium implemented a few of Joan Irvine's proposals to increase the perceived value of the properties and Brenn was able to buy out the partners. Having accomplished this, Joan and her mom then sued Brenn for "Fair Value" for the stock they had previously tendered to Brenn - something which they were entitled to as minority shareholders under Michigan law, where the Irvine Company had been incorporated. They received hundreds of millions more from Brenn. Bren did have to take out a loan to make that payment. Unbeknown to Brenn, this was Joan's plan from the beginning. I worked for Joan Irvine in this deal, and I can assure you that "the magic of debt" didn't provide any providential role in these transactions, as you have imagined. Without Joan Irvine Don Brenn would still be the son of a movie star who builds custom homes. Left to his own devices he will in time lose control of the Irvine Company due to his mismanagement. .

To: neolib who wrote (99098)	1/6/2008 10:50:36 AM
From: Tommaso	Respond to of 306849

One can always argue that such borrowing is parasitical, and that it amasses wealth for one person without really inreasing the total geniune wealth. I suspect that most antiborrowing outrage, however, is just sour grapes. I have a friend who, if I lose money on an investment manages to imply that I am being rightly punished for stupidity, but if I make money, she implies that I am rather immoral to have done so. Reminds of when I was a teenager, and there was a guy who would continually remind me how unattractive I was, except if a girl took an interest in me, then I was a nasty sex maniac. Turned out he was gay. There are a even a few folks like that on SI.