Sherry Ikezewa had had enough. The still-active commercial property broker knew her retirement community, Altavita, the former Air Force Village West, was in financial trouble.
Worse, she knew after the board spent the actuarial reserves intended for residents, instead of filing for reorganization, when the place was in peril.
Or put another way, from that old Bobby Darin song…
“Splish-Splash I Was Taking A Bath”
Sherry realized the residents were taking a bath. And some joined in.
It wasn’t just blowing through the reserves.
Ikezawa, a resident since 2005, also knew Altavita’s Board of Directors, led by Mary Carruthers, a financial advisor with Stifel, was like all other prior, board members — listening solely to and taking directions solely from, the bondholders.
Residents pleas to adopt prudent fiscal action? Common sense actions such as canceling expensive remodeling, when the reserves were dwindling? Ignored. As a commercial broker, Sherry recognized what was going on, as did the Senior Housing Forum, an industry-related blog that puts the blame squarely on the board and management, in an article here.
Curiously, Steve Moran, the blog founder, never bothered contacting Sherry, before he published. Had he done so, Moran would likely not have written:
- “There was a board of directors that was made up of a few residents, community members and some retired military folks who were not residents. They were good people, successful people. But they assumed management knew what they were doing and trusted that things would all work out.” – [Had Moran contacted Ikezawa, he would have learned many disagreed with the Board. One recommended a DOJ investigation. Others who complained were either forced out or left of their own accord. Perhaps in disgust.]
- “Eskaton has done a masterful job of improving things” – [Again, Moran’s blog is for an industry-supported publication. Plenty of residents acknowledge Eskaton eliminated some bloat, but, and crucially, opted not to search for a competent CEO.]
- “The residents were too trusting.” [Some residents were and are, proficient in “Learned Helplessness.” But quite a few were not, and complained mightily.]
As an aside, Mary Carruthers is described by Ikezawa as “warm and personable” in her personal dealings. A former boardmember described Carruthers’ personality in board meetings as “business neutral.” I’ve spoken with Carruthers and came away believing she was good at making people believe what she wanted.
However, when two sides collide, I harbor no illusions where people who earn their livelihood in financial institutions, come down. So, although, Steifel’s website proudly claims,
“Our founding partners’ defining principle – to “safeguard the money of others as if it were your own” – is as important today as it was in 1890.”
it seems overdue for a realistic, update.
In the case of Altavita, the allegiance owed by Mary Carruthers, Chairman of the Board of Directors, by all actions, clearly are to the Corporation. The residents?
So, as the Board seemed likely to continue stiff-arming residents questions, as well as common sense solutions Sherry and others before her suggested via Finance and Marketing committees; and since appeals to Senator Richard Roth and and Congressman Takano were met with – silence, (More on them, later,)
Sherry sued for herself, and the residents.
When Judge Sullivan liked a house, he bought it. By hook or by crook. After about ten years, (!) someone within the County spilled the beans, and the investigation made news around the state. Just not so much in Riverside.
Judge Sullivan “retired” as soon as the Commission of Judicial Performance began their investigation. The Commissions findings read in part:
“Judge Sullivan has stipulated, and the commission concludes, that Judge Sullivan
engaged in a pattern of improper financial dealings and fiduciary activities from the time he became a judge in 1987 until he decided to retire in 1999, after learning of the commission’s investigation. Furthermore, Judge Sullivan, on a number of occasions, used his judicial position to further his unethical schemes, all of which had the effect, if not the design, of benefiting him financially.”
The full findings and report on Judge Sullivan, is here.
Astonishingly, Judge Bill Sullivan was not prosecuted.
Details of the other players. Or, “OMG – Eskaton?! – What were you thinking!”