Magistrate Judge Christian Hummel
The SEC joined in the receiver’s recommendation that property on Sacandaga Lake—a house and two cottages—held by an irrevocable trust be sold. The receiver determined that the parcel’s market value was not properly reflected by the conveyance to trust because it “was not an arms-length transaction.” Also, the property’s current equity could not be preserved, it was unlikely to appreciate in value, and its rental was “not indicated.” The court ordered the parcel’s sale, rejecting the trust’s assertion that it had special priority due to the beneficiaries’ personal ties to the property or Tips for Buyers and Sellers by their status as victims of different sort than the investors. The court noted that even if the subject parcel were rented, the receiver projected a negative cash flow of $9,000. Further—as in the prior sale of a home in Vero Beach, Fla.—the court agreed with the receiver that the Sacandaga Lake property was liable to physical deterioration, and its continued possession was not a financially responsible solution given the receiver’s actual and projected figures and that the Sacandaga Lake property’s rental would provide inadequate income to pay for fixed annual expenses and ensure the property’s continued financial health as an investment.
