While this interviewer has known and represented you for many years, our readership may not know how you originally became receivers. Give us some background on your practice, starting with Jim’s first case:

During the 1980’s, we purchased several large REO apartment complexes in Phoenix, Arizona, from various California savings and loan associations (which all eventually failed). At that time, we were also providing REO property management services. An S&L officer asked if I would consider being appointed as receiver in cases in which they were initiating foreclosure actions. I quickly said, “Of course I will be happy to.” But then I had to ask myself, what is a receiver and what the heck does he/she do? Since at the time there was no CRF or other organization to turn to, after getting input from colleagues, I decided I would like to give it a try. At the time, if you wanted to act as a receiver in Superior Court, you had to submit your CV to the court and be listed on an approved list. It was not until 1991 that my first break came when I was nominated by Bank of America’s counsel, Grant Riley, in an apartment foreclosure case. I will never forget how scared I was the first time I appeared in court on my motion requesting approval of my final account and report. Fortunately, what followed was a landslide of rents, issues and profits cases during the 90’s and my first appointment in federal court as receiver in a 1993 SEC Ponzi scheme case. The rest is history.

You have both been receivers for many years. Tell us about your specialties (such as may be assumed from the business name, FedReceiver):

While we have been appointed in over 700 receivership cases involving a wide variety of disputes and assets, our cases are focused on real estate, complex partnership disputes, and government enforcement matters. The government enforcement cases include various state agencies involving both civil and criminal matters as well as the Federal Trade Commission and the Securities and Exchange Commission in federal court. In addition, we handle divorce, judgment enforcement, construction completion and specialty cases including assisted living facilities and restaurants. During the current real estate cycle, real estate defaults have decreased and as a result, so have the rents & profits and construction completion receivership cases; however, our case load has remained very strong with business and real property dispute matters, as well as government enforcement cases. In addition to property management and receivership services, Steve Donell also serves as a property management standard of care expert witness with a focus on premises liability and habitability disputes. Steve has been designated in hundreds of such cases.

While you are both Donells, we know you collude (or at least work with) more Donells in the Receivership and property management business. Please identify all such Donells. Who are they and what do they do?

Jim Donell founded Jalmar Properties, Inc. in 1985, as a real estate investment and management company. Once the receivership appointments expanded to include federal court enforcement actions, FedReceiver, Inc. was formed. Jim is CFO of Jalmar and FedReceiver. Jim’s sons, Steve and Todd, are President and Executive Vice President of both, respectively. Todd has been appointed as receiver in numerous state court cases. Todd’s wife, Abegae, Donell is the controller, so it is truly a family business.

Steve: have you had any particularly challenging, interesting, or otherwise noteworthy receivership cases?

One that comes to mind was my appointment in California state court as a receiver over an equipment distribution company. On the day of my appointment and take-over, I arrived at the business, only to find 18-wheel trucks loading up the inventory. After getting the police involved, I stopped the trucks from leaving, and then determined that many of the assets had been previously diverted to Ohio. I obtained an ex parte recognition order, without notice, in Ohio, which then lead me to Indiana, Illinois, Wisconsin and finally Toronto, Canada, where I also obtained recognition orders without notice. Inventory worth millions of dollars was eventually seized, and the principals of the company were criminally indicted and sentenced to prison. In another case (in which this writer had the privilege of representing Steve), we were able to achieve a 65% return to Ponzi scheme investors, with recoveries from real properties and accounts in various countries. The unlikely and unexpected also happens: I had another case in which someone set up a fake LinkedIn page for me, took my image, and referred to me as the “Deceiver” instead of Receiver. I guess I hit a nerve!

Jim: have you had any particular receivership that was most challenging, interesting, or otherwise noteworthy?

I was appointed in an SEC matter involving approximately $300 million in investor funds from 8,000 people in 13 countries. The entire scheme was a fraud. After my appointment, the fraudsters created a second company and promised the investors that if they declined to file a claim with me in my case, that they would receive all of their funds back from the new entity. The fraudsters solicited funds from existing and new investors. They raised over $5 million after my appointment as Receiver. I was sued by the perpetrator for $50 million (and as you might expect, the case was promptly dismissed).

Steve, you’ve been President of NAFER, the National Association of Federal Equity Receivers. Tell us about that organization, how it operates, and what you get out of your involvement, compared to the CRF.

NAFER is comprised of professionals who work in the area of receivership, insolvency, bankruptcy, restructuring and international asset recovery; however, its focus is to serve and promote federal equity receivership professionals and their related practices. Since my years as the second President of NAFER, membership has quadrupled. NAFER has both a national and international presence, with its strategic alliance with INSOL, and annual conferences here in the US and Caribbean. It also has regional meetings throughout the year in various cities. NAFER is geared more towards investment fraud cases and it has provided me with an opportunity for business contacts throughout the country. NAFER and CRF both play pivotal roles for receivership professionals. Jim, Todd and I regularly work with CRF members throughout the state including receiver’s counsel, CPA’s, brokers and additional professionals. Our receivership practice could not have continued to expand without these very valuable resources.

Final tips or words of wisdom for our readership?

Having handled such a wide-variety of cases with assets in so many locations, one key is to source local talent and expertise to staff and support cases. Local market knowledge and relationships are invaluable. However, a combination of skepticism, diligence and prudence are invaluable for each and every case, wherever located. One very valuable lesson that has been learned over the years is to keep the Judge well informed as to the status of the case, as well as to communicate with all parties. Particularly when noticing the Final Account Motion, make sure that all interested parties, including tenants, are served with the notice in order to permit the late assertion of claims, and so that any post-receivership claims are barred.

Let’s get some personal info on each of you – hobbies and other interests?

­Jim enjoys golfing if Steve and Todd let him out of the of the office on Fridays, while Steve and Todd are both very busy with their kids’ sports schedules. Todd also happens to be a football fanatic! Steve looks forward to getting back into some High Sierra backpacking with his kids now that they are beyond their toddler years, as well as enjoying wine-tasting getaways with wife Wendy.

*Alan Mirman provides legal counsel for many receivership matters. Mirman, Babman &
 Nahmias is in Woodland Hills.