Ex-Pioneer Chief Offers to Help Investors, Firm : Bankruptcy: Gary Naiman proposes handing over millions of dollars in cash and assets held through a family trust to rescue ailing company.

Former Pioneer Mortgage President Gary Naiman is willing to turn over cash, notes and other assets to his former company as part of a multimillion-dollar agreement that could help Pioneer investors recoup some of their money, Pioneer President Dennis Schmucker said Tuesday.

Naiman holds the cash and other assets through a family trust and several companies that did not enter Chapter 11 bankruptcy proceedings in January along with Pioneer Mortgage. The La Mesa-based mortgage broker arranged $200 million in loans for 2,000 investors before running into severe financial trouble. Pioneer stopped making payments to investors in November.

Naiman has not yet signed the proposed agreement, but Schmucker said “there is a very good chance that (it) could be signed within the week.” However, the agreement will not become effective until it is approved by U.S. Bankruptcy Court Judge James W. Meyers.

Schmucker said an agreement with Naiman would be an important step because cash-strapped Pioneer is running short on funds needed to pay employees who are untangling the financial records that Naiman left behind. Pioneer might also use the funds to help pay the hundreds of Pioneer investors who stand to lose millions of dollars, Schmucker said.

Naiman and his attorneys were not available to comment.

However, Edward Melillo, a senior bankruptcy analyst with the U.S. trustee’s office, described the proposed agreement as “the most exciting piece of news” in many months for Pioneer investors. Melillo’s office was host to a creditors’ meeting Tuesday at Golden Hall, at which Schmucker announced the planned agreement.

Schmucker speculated that Naiman is willing to turn over personal cash and assets “because he wants to do what he can to help the investors. . . . He might also be trying to find some peace of mind.” Schmucker based his belief on recent conversations with Naiman, whose family had operated Pioneer for decades before the January bankruptcy filing. “If the settlement agreement is what we think it is, it will be quite an achievement,” said Ali Mojdehi, an attorney who represents the Pioneer creditors’ committee. However, Mojdehi, who has not yet seen the proposed agreement, said the creditors’ committee “would be looking at it very closely . . . before taking a position on it.”

According to the proposed agreement, Naiman would turn over to Pioneer an as-yet unstated amount of cash, notes and assets. He also would “forgive millions of dollars in claims” that he holds against the Pioneer businesses that entered bankruptcy proceedings, Schmucker said.

Schmucker described the proposed agreement as the result of “many, many, many months” of negotiations by attorneys representing the ill-fated mortgage investment company, the creditors’ committee and Naiman.

Schmucker said the proposed agreement is preferable to a lengthy court battle, because it will “save investors hundreds of thousands of dollars” in attorney’s fees. Schmucker described the agreement as better for investors than any judgment they might receive by suing Naiman.