$5.2-Million Christensen Home Can Go Up for Sale, Judge Rules
A Bankruptcy Court judge ruled Monday that a $5.2-million Harbor Island home owned by the late Duayne D. Christensen can be sold in a foreclosure action as early as next week.
U.S. Bankruptcy Court Judge Peter M. Elliott found that a Christensen-owned company that holds title to the Newport Beach home had failed to make a monthly $47,000 payment in February--a payment needed to prevent the home from being sold.
The sprawling wood-and-stone mansion, which occupies one end of the small island in Newport Harbor, was purchased by Christensen and subsequently deeded by him to Ruby Valley Ranch Ltd., a Nevada company owned by Christensen and headed by his confidante, Janet F. McKinzie.
Christensen, a former Westminster dentist who founded and was sole owner of North America Savings & Loan Assn. in Santa Ana, died in a single-car crash on Jan. 16, just hours before state regulators declared his S&L; insolvent and seized it.
He had been lending the monthly payment to Ruby Valley Ranch since Elliott approved the arrangement on Nov. 4. The no-principal monthly payments included $40,000 in interest and $7,000 for property taxes. It is not clear when the $4-million remaining principal was to have been paid.
Payment Not Made
But in the wake of Christensen’s death and the subsequent series of fraud investigations involving up to $20 million that various authorities claim is missing from North America Savings, neither McKinzie nor any other Christensen business associate made the February payment on the mansion which Christensen occupied only briefly.
As of Dec. 1, according to a prior finding in Bankruptcy Court, the home at 36 Harbor Island had a fair market value of $5.2 million, the price Christensen paid for it in 1984. Last year, the house was on sale for $6.8 million.
Orange County recorder’s records are unclear about when Ruby Valley Ranch became the owner of the property. A 1984 deed lists the ranch as the purchaser, but a 1986 deed indicates that Christensen bought it and turned it over to Ruby Valley for no consideration.
In either case, the down payment was $1.2 million and the seller--a private individual--took back a $4-million promissory note. Elliott found that $4.88 million--which includes accrued interest--was the total due in December.
Ruby Valley Ranch, which owned a Nevada cattle ranch before losing it in a foreclosure action, went into Bankruptcy Court in Santa Ana last August, five days before the Harbor Island home was scheduled to be sold through foreclosure. The bankruptcy filing halted the sale, and Elliott gave the company permission last November to borrow the monthly $47,000 from Christensen.
The financial activities of Christensen and McKinzie, who had been working closely with him since at least 1980, have sparked intense investigations by the FBI, the state attorney general’s office and the Federal Savings and Loan Insurance Corp., which put North America S&L; into receivership on Jan. 23 and has since sued McKinzie for fraud.
McKinzie reportedly has been hospitalized in Sacramento, recuperating from tension and shock over Christensen’s death and the fraud allegations made against her in the FSLIC suit and several other lawsuits.
During her hospitalization, she has hired several law firms to help her.
On Friday, she retained the San Francisco-based firm of Morrison & Foerster to handle claims against her in civil actions, including the one filed by FSLIC.
And well-known Houston lawyer Richard (Racehorse) Haynes, who won dismissal of a murder charge against one of Christensen’s sons, is looking out for her interests in the criminal investigations.
Will Contested
McKinzie also has a lawyer in Stateline, Nev., to help her maintain her position as the manager and sole beneficiary of Christensen’s will and trust. Two of Christensen’s three children are contesting the will in a Minden, Nev., court and are challenging the trust in Orange County Superior Court. They claim that McKinzie exercised undue influence over Christensen, who signed the will and the trust three days before he died.
Lawyers for the children, FSLIC and McKinzie are to meet today in Nevada to determine what property Christensen owned in the area and whether they can find a special administrator to replace McKinzie, at least temporarily, in overseeing the will.
In a matter apparently related to the North America S&L; investigations, a Christensen associate is scheduled for a preliminary examination in Riverside today on a charge of passing a bad check for $11,000 to a Riverside travel agency. Jack Caldwell, 55, of Hemet, used the check to pay for a number of trips to Hong Kong, Singapore and Jakarta, said Cregor Datig, a deputy Riverside County district attorney.
Regulators have said Caldwell, who is on parole from a prior felony grand theft conviction, was traveling in an effort to sell a 20-unit Lake Tahoe condominium owned by North America S&L; to a Panamanian firm headed by an adviser to Indonesian President Suharto. That firm, Beven Co. Panama S.A., is believed by regulators to have been operated by Caldwell from his Riverside business, Commercial Concepts Inc.
Valued Disputed
The value of the Lake Tahoe condominium had been contested by regulators, who said it was not worth more than $10 million. Christensen built the complex for less than $2 million and contributed it to the S&L;, where it was used to boost the association’s capital by more than $14 million. North America S&L; sold the condominium for more than $20 million several years ago, but later had to take it back in a foreclosure.
Late last year, Caldwell was acting as the middleman in a proposed $30-million sale of the condominium to Soerjo Wirjohadipoetro , a retired lieutenant general of the Indonesian army and a special adviser to Suharto.
A tentative sale agreement filed with the state Department of Savings and Loan is signed by Wirjohadipoetro as president of Beven Co., while Caldwell signed the agreement as the firm’s vice president.
Caldwell was convicted in 1983 of three counts of grand theft involving fraudulent real estate deals in San Clemente, Sunset Beach and Hemet. He also had been convicted of grand theft in 1976 and in 1978 of violating state business laws.
He currently is being held in Riverside County Jail on the bad check charge and the related charge of violating his parole by passing a bad check, traveling overseas without permission and handling a real estate transaction.
