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Judge appoints receiver for Cedar Funding
Thursday, May 22, 2008
Monterey County Superior Court Judge Marla Anderson on Thursday appointed a receiver to take over troubled mortgage fund and investment firm Cedar Funding. Anderson said a neutral receiver, who is monitored by the court, would manage Cedar Funding in the best interests of the company’s estimated 1,500 investors. The morning at the Monterey courthouse was full of last-minute substitutions. Attorney Richard Damon had been representing Cedar Funding owner David Nilsen, but Nilsen replaced Damon with Shawn Mills. The motion hearing originally was scheduled in Judge Robert O’Farrell’s courtroom, but Mills asked for another judge. More than 60 investors, Nilsen supporters and family members packed the courtroom where Mills requested that the receiver motion be postponed. He also argued that Nilsen should remain the company’s manager. “I really believe that taking the brain trust out of a company is like taking a CPU out of a computer,” he said. Tom Duffy, attorney for the six investors who first sued Cedar Funding, said Nilsen made $71 million in insider loans and failed to record deeds of trusts in the name of investors. Duffy also pointed out that the state Department of Corporations has suspended the mortgage fund’s corporate license and the Department of Real Estate has pulled Nilsen’s real estate license. Ultimately, Anderson appointed Los Gatos-based Greg Sterling to manage Cedar Funding’s finances.
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