Profile: David J Pasternak
By Rense, Kirk*
[This Issue’s profiled professional is David J. Pasternak, long a major
figure in LA’s Receivership Community. This brief biographical sketch is
in Mr. Pasternak’s own words.]
When I was six, my parents moved to Sherman Oaks, where they lived for the remainder of their lives and I lived until I moved to the other side of the Santa Monica Mountains as a UCLA undergraduate in 1971. One of my UCLA friends (and fellow political science major) was Alan Mirman (how is that for a Heard In The Halls tidbit?). So my friendship with Alan goes back to the days when we both had considerably more, and longer, hair.
After college, I attended Loyola Law School in Los Angeles, future site of the comprehensive Receivers Forum educational programs. I remember my first days there, and being surprised to learn that many of my classmates went to law school after deciding to do so around the time that they graduated from college. I had decided that I wanted to be a lawyer when I was about 12 years old, although I don’t recall ever meeting a lawyer for any meaningful conversation until I was in law school (and not all of the conversations were meaningful then).
It was at Loyola that I met my wife and law partner Cindy, who was then Cynthia Rosen. We were seated alphabetically by our Sales Professor, and Pasternak wound up next to Rosen. I was married and Cindy was engaged, so it took about 14 years for the romance to blossom. Cindy always accuses me of being slow.
I went to law school wanting to become a corporate securities lawyer. When I graduated, I tried to get a job with the S.E.C., but they had a hiring freeze at the time. Instead, I was hired by the Department of Corporations, and found myself in their enforcement division. At that time, the Department of Corporations Enforcement Division prepared civil cases for the Attorney General to litigate and criminal cases for District Attorneys. Department of Corporations enforcement attorneys handled only administrative hearings. That changed during my three-and-one-half years there: we got the authority to co-counsel criminal cases with District Attorneys. It was a great time to work there, with Willie Barnes as Commissioner of Corporations, energetic Ron Fein as Chief Deputy, and Jerry Baker in charge of the Enforcement Division. It wasn’t long before I realized that I wanted to be a litigator, and not a corporate attorney.
It also was at the Department of Corporations that I first worked with receivers. I was fascinated by the concept of appointed individuals running businesses and investigating fraud and the like. While it seemed like great work, I never envisioned myself as a receiver, but thought that it would be interesting to work for a firm that represented receivers.
In 1980 I became the first Department of Corporations attorney in (my) recent memory to become a Deputy Attorney General in the Business Section in Los Angeles. We had five clients at the time: the departments of Corporations, Banking, Savings and Loan, Real Estate, and Insurance. While I was there the Business Section merged with the Tax Section, and we also represented the Franchise Tax Board and the Board of Equalization.
I have always thought that my brief career at the Attorney General’s Office was a highlight of my legal career, and still regret leaving after less than a year to take what appeared to be a great opportunity with a small Century City law firm. As a lawyer with only a few years experience, I was given tremendous responsibility as a Deputy AG. In one memorable securities fraud case, I obtained a contempt judgment from Judge Robert Weil in the Writs and Receivers Department. However, my most memorable case was a corporate takeover battle in Orange County. The lead attorney for one of the two other parties was Evelle Younger, who had left his position as the former California AG less than a year before (to join the Buchalter firm as a new name partner). I remember a phone call from Younger one day telling me that he had spoken to the judge in Orange County about the difficulty of Los Angeles lawyers appearing there for a 9:30 motion hearing, and she had agreed to schedule it at 11 a.m. to accommodate us. While it was intimidating to a young lawyer such as me, only a government office such as the AG’s office would give a young lawyer the responsibility to handle a case of that magnitude against experienced lawyers — such as the former Attorney General. Needless to say, the judge ruled in favor of Younger’s client at the hearing. But, a few weeks later I obtained a writ of supersedeas from the Court of Appeal overturning her ruling, and the case settled a short time later.
During a brief sojourn at a Century City law firm that included receivers, I discovered that the firm’s major practice area was bankruptcy, and I moved on to Tyre & Kamins (which later became Tyre Kamins Katz & Granof). After about a year there as a business litigator, I was asked by the Department of Corporations to become a conservator of an escrow company that they were shutting down. I was not enthusiastic, but took the assignment after one of the partners at the firm encouraged me to do so. After a short time as the conservator, the Department of Corporations filed a lawsuit and had me appointed as the receiver of the escrow company, my first receivership.
For the next ten years or so I dabbled in receiverships, generally getting appointed a few times a year, but concentrated on litigation. By the early ‘90’s I decided that I preferred my receivership practice and concentrated on that instead. I found that I enjoy the responsibility and challenges of receivership practice, and especially enjoy the many court hearings while generally avoiding the bane of litigation — discovery.
In 1993 Cindy and I formed our own Century City law firm with two other partners. Though Cindy is now a full time mediator, she is still a member of Pasternak, Pasternak & Patton.
I have handled some large receiverships (as well as many small ones) during recent years, while regularly representing and advising many other receivers. In 2000, San Bernardino Superior Court Judge Peter Norell (who is now the Supervising Judge in San Bernardino) appointed me as the Receiver of the parent company of Wickes Furniture Company and its sister company, which was a furniture distribution company headquartered in Ontario and with a large facility in Mississippi. That receivership has posed many special challenges, including complex tax and business issues. I sold the assets of the sister company in 2002, and sold Wickes (which was a profitable operating business) shortly thereafter. Since then I have had over $45 million in the bank pending our attempts to resolve tax and other issues. The banks that had me appointed as receiver are undoubtedly not pleased that they have yet to receive any of these funds.
In April, 2003, United States District Judge Dean Pregerson appointed me as receiver in a large mortgage fraud case that has kept me busy ever since (as well as fellow Receivers Forum Board members Michael Wachtell, who is my principal attorney in that case, and Howard Grobstein, who is my principal forensic accountant in that case). We have entered homes and businesses with U.S. Marshalls without notice in California and Utah and seized documents and assets after demonstrating that the principal defendants destroyed computer and documentary records following my appointment. I have administered some 85 expensive homes in the most exclusive California communities (La Jolla, Malibu, Beverly Hills, Bel-Air, Carmel, etc.), and sold about 25 of them. I also have located and sold a variety of other assets, including wine, jewelry, and extensive home furnishings.
At my request both of the primary individual defendants in this case have been held in contempt of court for failing to comply and cooperate with our efforts. One has disappeared (with five of his six children and one of his two wives), and the second spent thirty days in federal detention as a result of the contempt conviction.
I have always believed that attorneys have an obligation to give something back to the community, due, at least in part, to growing up during the ‘60’s. Consequently, I have been involved in bar and related activities since I began practicing law. A highlight of this involvement was serving as president of the Los Angeles County Bar Association about five years ago. Another highlight is my current 3-year term on the California Judicial Council, which is responsible for the operation of all of the California courts. Four attorneys appointed by the State Bar Board of Governors, 14 judges, one member each from the State Senate and Assembly and six advisory members make up the Council. California Chief Justice Ron George presides over the meetings.
I have three sons and sports are a large part of my free time. We are all enthusiastic UCLA supporters (and still admit it), attending as many basketball and football games as possible. There are also Dodgers games, and some visits to Staples to see the Lakers and Kings. I enjoy hiking, and recently purchased a new bicycle, hoping to find the time to bicycle with my middle son, Kevin. Our oldest son, Greg, graduated from Bard College in the Hudson Valley last year, and is living in New York trying to find acting jobs for this year. Fourteen-year-old Kevin is an eighth grader at Buckley, and Matthew is a 10-year old fifth grader at Curtis.
Somehow, a future corporate securities lawyer never handled a corporate securities matter, and instead wound up as a receiver. Funny how that happens.