Jean Marc El Jwaidi
Las Vegas developer Jean Marc El Jwaidi has received a boost in his effort to emerge from Chapter 7 bankruptcy.
Attorneys for the trustee assigned to his case, William Leonard, this week filed papers joining El Jwaidi’s objection to Vestin Mortgage’s $13.3 million claim against El Jwaidi.
The attorneys at Timothy S. Cory & Associates didn’t say in their filing why Leonard is joining the objection.
Last month, Leonard agreed to settle for $1 million a Bankruptcy Court lawsuit against El Jwaidi alleging that prior to the bankruptcy, El Jwaidi engaged in transactions that would later harm his bankruptcy estate and creditors. The $1 million is to be provided by a benefactor as a gift or loan to El Jwaidi.
El Jwaidi’s objection to the Vestin claim charges it would be unfair for Vestin to both retain land it foreclosed on and collect the $13.3 million in principal, interest, late charges and fees due under a mortgage that encumbered the property.
But Vestin and other creditors say El Jwaidi has no standing to object to claims in his Chapter 7 case. Vestin says El Jwaidi and one of his companies defaulted on the mortgage note at issue and the money it’s seeking is authorized by that lending contract.
The land Vestin foreclosed on is at the Las Vegas Beltway and Russell Road and was once planned for development by El Jwaidi as PG Plaza, a mixed-use center.
Plans for PG Plaza fell apart in 2009.
That was after El Jwaidi was arrested in what state investigators called a Ponzi scheme defrauding investors -- and both El Jwaidi and his company, Babuski LLC, filed for bankruptcy.
The criminal case against El Jwaidi was resolved when a benefactor paid restitution of $338,000 to two of his victims.
A September hearing has been set on efforts by El Jwaidi to reduce or extinguish much of the $23.4 million in claims against him, including Vestin’s.
"The court has agreed to continue out the claims objections so that the trustee may look at each of them and determine whether to join in those objections as well. We are working hard to resolve all issues in this case so that Mr. El Jwaidi’s legitimate creditors may be paid, as has always been his intention, and so that Mr. El Jwaidi may move forward with his life and show the community that he has always intended to do the right thing despite the rumors otherwise," El Jwaidi’s bankruptcy attorney, Matthew Johnson, said Tuesday.
These rumors relate to numerous lawsuit claims that El Jwaidi defrauded investors and used their funds to live a lavish lifestyle and for gambling.
Johnson, however, has told the Bankruptcy Court that El Jwaidi’s bankruptcy was caused by the "horrible economic situation in Las Vegas and the fact that the debtor and his companies were the victims of a fraudulent loan."