(OPENPRESS) December 28, 2010 -- An IMH Secured Loan Fund Unitholder filed on June 7, 2010 a lawsuit as well as an application to enjoin the vote from proceeding on behalf of all similarly situated IMH Secured Loan Fund investors against IMH Secured Loan Fund, LLC, IMH Financial Corporation, Investors Mortgage Holdings, Inc., IMH Holdings, LLC, IMH Management Services, LLC, Shane Albers, William Meris and Steven Darak.
Those who are investors in the IMH Secured Loan Fund, have certain options and should contact the Shareholders Foundation, Inc. by email at mail(at)shareholdersfoundation.com or call at (858) 779-1554. The IMH Secured Loan Fund, LLC is a private placement managed by Scottsdale based Investors Mortgage Holdings, Inc. The IMH Secured Loan Fund was organized in May 2003 to invest in and manage mortgage investments, consisting primarily of short-term commercial mortgage loans collateralized by first mortgages on real property, and to perform all functions reasonably related thereto, including developing, managing and either holding for investment or disposing of real property acquired through foreclosure or other means. The fund has apparently laid off nearly one-third of its work force since 2008. On February 16, 2010, IMH Financial Corporation filed a second amended registration statement with the Securities and Exchange Commission (SEC) as part of their ongoing effort to restructure the company with a view towards ultimately filing for an initial public offering. Then on March 16, 2010, a tender offer statement was filed by real estate management company MacKenzie Patterson Fuller. On April 01, 2010, management for the IMH Secured Loan Fund filed with the SEC a statement recommending that investors reject the tender offer from MacKenzie Patterson Fuller to purchase their units at a price of $1,000 per unit. IMH's fund manager characterized the tender offer as "an opportunistic attempt to deprive the Members of the Fund who tender Units in the Offer of the potential opportunity to realize a greater long-term value of their investment in the Fund." IMH's fund manager, however, could not provide any guarantees or assurances to investors about the fund's long-term prospects. On May 18, 2010, the Committee to Protect IMH Secured Loan Fund announced that it issued an open letter urging members of IMH Secured Loan Fund, LLC not to respond to the Fund's request that its members consent to the conversion transactions described in the Fund's Consent Solicitation/Prospectus.
According to the complaint filed on Jun 7 in the United States District Court for the District of Arizona the plaintiff alleges the Conversion Transaction is a breach of both the defendants common law fiduciary obligations to the Unitholders and their duties under the Fund's Operating Agreement.
On June 9, 2010, the defendants announced that they had obtained a sufficient number of votes to move forward with the Conversion Transaction, although the vote had not been certified, thereby mooting plaintiff's injunction motion.
According to the preliminary results reported by IMH Secured Loan Fund, 64.67% of the total membership interests submitted a vote with 57.48% of the net votes being cast in favor of the Conversion Transaction. According to a law firm the newly issued IMH shares are not publicly traded and would be illiquid.
On June 10, 2010, the Defendants further announced that they were voluntarily dismissing the lawsuit, which they had filed alleging that certain Unitholders were trying to interfere with the vote.
On June 14, 2010, the "Committee to Protect IMH Secured Fund," filed lawsuit and injunction motion similar to the lawsuit filed on June 7, before Vice Chancellor Leo Strine in the Chancery Court for the State of Delaware.
Then on October 27, 2010, IMH Financial Corporation filed an initial registration statement with the Securities & Exchange Commission (SEC) seeking approval from the SEC to pursue an initial public offering (IPO). In a letter to shareholder's IMH conservatively reported:
The registration statement is not yet effective, is subject to customary review by the SEC, and we expect to file various amendments to the registration statement in the course of the SEC review process. The size, timing and ability to complete the proposed offering are subject to and contingent upon marketing considerations, including financial market conditions, the timing of effectiveness of the registration statement and other risks, uncertainties and considerations.