Problems are piling up for Ezri Namvar and his L.A. investment company, Namco Capital Group. He faces at least 17 Superior Court lawsuits involving non-payments to his investors. There's also Security Pacific Bank, which Namvar bought in 1997 and failed last month, and his huge stake in the downtown Park Fifth condo development, which he's trying to unload. Anyway, the Business Journal's Daniel Miller recaps Namvar's troubles.
While many business chiefs are in trouble in this recession, Namvar, who’s been bedeviled by the downturn in the real estate market, stands out. That’s partly because his holdings are sizable and numerous but mainly because of the way he raised money. Namvar, 57, an immigrant from Iran, got a good deal of his money from fellow Persian Jews who live in and around Beverly Hills.
The lawsuits allege that Namco has been unable to pay back investors who gave him anywhere from $200,000 up to nearly $18 million each. The losses, according to attorneys representing the plaintiffs, have caused many to lose their life savings. Investors typically got a two-page promissory note that essentially said Namco would pay them back with interest up to 8 percent. Some were personally guaranteed by Namvar. Investors have no collateral or recourse, except to sue.
Namvar is not a large public figure in L.A.’s wider business community, but he and his investment company had amassed an impressive portfolio over the last several decades, holding many properties secretly through multiple limited liability corporations, according to A. David Youssefyeh, an attorney with Los Angeles firm ADY Law Group who is advising 10 clients who claim they are owed money by Namvar but have not sued.
One of the interesting sidelights is his involvement in Park Fifth, the $1.3 billion Pershing Square project that has been on hold because of financial problems. You might recall the lead developer is a guy named David Houk, who has spent the last 30 years trying to get this thing off the ground. A couple of years back Houk brought on Namco Capital as an equity partner. Namvar then sold half of his company’s interest to an entity of Africa Israel Investments.
“Their obligation in the joint venture is to supply capital and financing for the project,” Houk said. “Ezri stopped being able to do that some time ago, starting about a year ago.” Houk said he is in “serious discussions” to replace both partners. However, it’s unclear in the current real estate market what Namco’s stake would fetch or whether it can be sold for an attractive price.