Somewhere over the rainbow…

“Somewhere over the rainbow, bluebirds fly, birds fly over the rainbow, why, then, oh why can’t I?”

You cannot fly over the rainbow for the same reason that bluebirds cannot read, I guess you might say. You don’t have wings and bluebirds’ brains are about the size of a pencil eraser. I think you should be happy with the trade. And things really are not so bad here on earth under the rainbow.

But, nevertheless, we persist. We wistfully long for powers beyond our reach, for dreams we can never realize.

This is often how it feels when you have won a judgment against an insolvent entity. You have something in hand, like a judgment for over $1 million. Why, then, oh why, can’t you convert that hard-won judgment into cold hard cash?

For nearly five years, LNV Corporation, a Nevada corporation, has been trying to get money related to a failed construction loan from a penniless entity, OSM. LNV won a judgment against OSM, defended an appeal of the judgment, and now seeks to enforce the judgment against third-parties, other lenders who were “participants” in the underlying failed loan.

The lender participants all reject the effort, arguing, in effect, “too little, too late.” (No legal right of indemnification or, alternately, if there ever had been, the lender participants argue, time’s up.)

How does LNV rationalize bankrolling this quixotic  venture for a pot of gold at the end of the rainbow? We note that LNV claims that it is entitled to its legal fees related to the collection. Presumably its lawyers have taken this on, at least in part, “on spec” or, at least, at a sharply discounted rate in the hope and expectation that the lawyers will get a share of the pot of gold.

For LNV’s sake, we can only hope so because, at this point, there can be little doubt that cost of collection efforts rival or exceed the “principal amount” of the judgment…

 

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