California MHP News

Fri, Nov 22, 2019 – Kabateck LLP attorneys representing hundreds of low-income mobile home residents in Long Beach, CA secured a nearly $57 million settlement, which is the largest settlement ever involving a mobile home park.

350 residents of Friendly Village Mobile Home Park who live in squalor will receive monetary compensation from the owners of the park, who failed to address serious maintenance problems, ignored complaints and hiked up the rent.

A bankruptcy judge approved a $42.5 million settlement for 151 families who filed lawsuits against the defendants, Michael Scott and Lee Kort. Those plaintiffs obtained $6.9 million paid from prior settlements.

As part of the settlement agreement, the mobile home park will be sold and a substantial portion of the proceeds of that sale, at least $7 million, will be divided between many of the residents, even those who are not part of the litigation.

This landmark agreement resolves litigation that found the owners negligent of unfair business practices, retaliatory eviction and financial elder abuse.

Wed, Nov 20, 2019 – The owners of a mobile home park that is sinking due to its location on a former landfill have agreed to pay roughly $50 million to 151 families who sued over the conditions, an attorney representing the residents announced today. He made the announcement after a judge approved the settlement earlier this week.

As part of the agreement, residents in the park on Paramount Boulevard will also share in a portion of the proceeds from the sale of Friendly Village Mobile Park after the owners declared bankruptcy. The sale is expected to generate an additional $7 million to be divided among the residents, even those who were not part of the lawsuit that culminated in a civil trial and jury verdict a year ago.

Phil Woog, an attorney for the park’s owners – Friendly Village MHP Associates, Sierra Corporate Management and Kort & Scott Financial Group – declined to comment in a brief phone interview.

Kabateck and his partner, Gary Fields, said the settlement will be divided among residents based on their individual conditions. None of the residents will get rich, he said – but he said hopes it will be enough to help them find a new home.

Estimated Awards: $57,000,000 − $25,650,000 (45% Attorney’s Fees) = $31,350,000 ÷ 151 families = $207,616 per family, but only if it were divided equally which is NOT how it will work. This calculation is only provided as an example and does not reflect the actual individual settlements to be awarded to the 151 families.

Previous News

1. 2019-11-14 – Friendly Village Mobile Home Park – Bankruptcy Distress Sale for $15,400,000 (Updates)
2. 2019-05-23 – Judge Upholds $36 Million Jury Verdict Against Kort & Scott Financial Group
3. 2019-05-16 – Friendly Village Mobile Home Park – 42% Turnover in 4 Years (2014-2018)
4. 2019-02-08 – Friendly Village Mobile Home Park – Phase II Jury Trial Scheduled
5. 2019-01-06 – Friendly Village Mobile Home Park – 4 Years After KSFG Purchase
6. 2018-12-03 – Friendly Village MHP – Bankruptcy Distress Sale for $27,400,000
7. 2018-11-27 – LA Jury Hits Mobile Home Park Owners with $34 Million Punitive Damages Verdict
8. 2018-11-27 – Friendly Village Mobile Home Park – 31 Families Awarded $34M in Punitive Damages
9. 2018-11-20 – LA Jury Awards $5M Verdict to Mobile Home Park Victims
10. 2018-11-19 – Friendly Village Mobile Home Park – 55 of 235 Residents Win $5.57 Million
11. 2018-11-16 – Friendly Village Mobile Home Park – Jury Deliberations
12. 2018-10-25 – Friendly Village Mobile Associates, L.P., a Daniel C. Fischer Company
13. 2018-10-15 – Friendly Village Mobile Home Park – Jury Trial Continues Against Three Defendants
14. 2018-10-12 – Friendly Village Mobile Home Park – Kort & Scott DBAs File Chapter 7 Bankruptcy
15. 2018-09-10 – Friendly Village Mobile Home Park – KSFG and SCM to Face Jury Trial
16. 2017-03-21 – HCD Fails California Mobile Home Owners – Time and Time Again
17. 2016-12-11 – Friendly Village Mobile Home Park – Testing for Methane Levels
18. 2016-11-30 – Friendly Village Mobile Home Park – Legal Battle Involving Methane Leaks
19. 2016-04-03 – Friendly Village Mobile Home Park – HCD Violates 174 of 182 Lots
20. 2015-08-13 – Civil Lawsuit Filed by 235 Residents, Case Number: BC591412

Friendly Village Mobile Home Park

• Address: 5450 North Paramount Boulevard, Long Beach, California 90805
• County: Los Angeles
• Phone: 562-531-3002
• Spaces: 182
• Type: All Ages
• 2019 Space Rent: $1,500
• Purchased: Feb 2014, Amount: $23,000,000
• Management: Sierra Corporate Management
• 2018-10-08 – New Management: Investors’ Property Services
• DBA: Friendly Village GP LLC, Friendly Village MHP Associates LP
• DBA Filing: Nov 2010, Jan 2014

Thu, Nov 14, 2019 – The Trustee has entered into an Agreement (as defined above) whereby he intends to sell the Property (as defined below) for $15 million to 5450 Paramount LLC (201931910345) (Levy Affiliated), a California limited liability company (“Buyer”), or an assignee of the Buyer free and clear of all claims, liens, and encumbrances, including claims against the Debtor as expressly provided in the Agreement. In furtherance of the sale, the Trustee files this instant Motion to approve certain bid procedures that the Trustee believes will facilitate an orderly auction. The Trustee requests that the Court grant the Motion.
Trustee’s Motion for Order Approving Overbid Procedures

Mon, Dec 3, 2018 – Sale Notes: The entity that owns the property is Friendly Village MHP Associates L.P., d/b/a Friendly Village of Long Beach, a California limited partnership (“LP Debtor”). The LP Debtor filed a voluntary petition under Chapter 7 of Title 11 of the United States Code in the Central District of California (“Bankruptcy Court”) on October 2, 2018. The LP Debtor’s general Partner, Friendly Village GP, LLC, a California limited liability company (“GP Debtor”) filed for protection under Chapter 7 of the United States Bankruptcy code in the Bankruptcy Court on October 21, 2018. The cases are Nos. 8:18-bk-13638-ES and 8:18-bk-13864. Richard A. Marshack was appointed and is the acting Chapter 7 Bankruptcy Trustee of both estates.

The LP Debtor and the GP Debtor will be collectively referred to as “Debtors.” The bankruptcy cases were precipitated by ongoing state court litigation commenced on August 13, 2015, by Debtors’ tenants in the Superior Court of the State of California, County of Los Angeles, entitled Celestino Acosta, an individual, et al., v. City of Long Beach, a municipality; Friendly Village Mobile Associates L.P., D.B.A. Friendly Village of Long Beach, a California Limited Liability Company; Friendly Village MHP Associates L.P., D.B.A. Friendly Village of Long Beach, a California Limited Liability Company; Friendly Village, GP, LLC, a California Limited Liability Company; Sierra Corporate Management, Inc.; Kort & Scott Financial Group LLC; and Does 1-100, assigned as Case No. BC591412 (“State Court Action”).

The Plaintiffs in the State Court Action are seeking damages for failure to maintain the mobile home park, nuisance, elder abuse, emotional distress, unfair business practices, retaliatory evection, breaches of contract, warranty and quiet enjoyment (among other complaints). The lawsuit names the Debtors, Kort & Scott Financial Group, and Sierra Corporate Management and others as co-defendants.

On Nov 19, 2018, the jury returned a verdict and awarded compensatory damages of $5.6 million to the _____ plaintiffs who occupied _____ spaces. This phase of the trial represents approximately 20%-25% of the total plaintiffs/spaces in the current State Court Action.

On Nov 27, 2018, the jury returned its verdict in the punitive damages phase of the current trial in a total amount of approximately $34 million, finding liability for the punitive damages as follows: Kort & Scott 55%, Sierra Corporate Management 25%, GP Debtor 10% and LP Debtor 10%.

Wed, Nov 6, 2019 – The MHPHOA.com website launched on Thu, Nov 5, 2015 and during the time period of Thu, Nov 5, 2015 through Tue, Nov 5, 2019 (1,461 Days) the MHPHOA.com website recorded the following analytical information. Jul 2019 sets a new benchmark for number of Users (10,690) and May 2019 sets a new benchmark for number of Pageviews (25,113) for the MHPHOA.com website.

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Fri, Nov 1, 2019 – The Idaho Press reports the 151-lot Karcher Mobile Home Park sold for $7.5 million to Boa Vida, a California-based manufactured home and RV Park organization.

The previous owners, California-based investment company Elevate Commercial and Nevada-based commercial real estate agency Patriot Parks Management, bought the park last year. Elevate co-owner Demetre Booker Jr. said they did not have plans to sell the property, but Boa Vida made an attractive offer, and it made good economic sense to sell it. Booker said he closed the deal last week.