The Lennar San Francisco Shipyard development was once home to a secret nuclear radiation test site
LandSource And Five Point Holdings
LandSource LLC was a Lennar-created and controlled entity. According to a complaint filed in connection with the Lennar CalPERS swindle – “LandSource was the primary vehicle used by the Lennar defendants to orchestrate the massive fraud on CalPERS and the State of California”.
The complaint goes on to say “The fraud included the use of inflated appraisals, false cash flow projections, and material misrepresentations and misstatements”. Lennar was a fiduciary and the responsible manager of LandSource. The Lennar executives fraudulently induced CalPERS to contribute nearly a billion dollars in assets to CalPERS.
The Lennar executives then borrowed over a billion dollars from a Barclays Bank loan syndicate using CalPERS assets as collateral. The elaborate loan presentations and cash flow projections prepared and given by Lennar to CalPERS and Barclays Bank were a tour-de-force in real estate loan fraud. Upon receipt of over a billion dollars in fraudulently-obtained cash, the Lennar executives promptly stripped LandSource of every dollar on the balance sheet and transferred it to the Lennar bank account.
This cash heist by Lennar virtually guaranteed insolvency and bankruptcy for LandSource. And that is exactly what happened just 14 months later. Lennar then manipulated the bankruptcy process to end up in control of all of the assets in LandSource – including the assets contributed by CalPERS. CalPERS lost every single dollar contributed to LandSource.
Astonishingly, the Lennar executives then re-packaged the assets hijacked from CalPERS in the bankruptcy process, changed the name of the company to Five Point Holdings, and then took Five Point public – using the same style of fraudulent valuations and cash flow projections utilized in the LandSource swindle.
The Lennar executives pocketed hundreds of millions of dollars from the Five Point Holdings stock sale to the public. That is why they are smiling in the photo below.
But the investors aren’t smiling. Why is that? Because they have lost over 90% of their money – so far.
Five Point Holdings
History Repeats: Same Lennar Executives, Same Properties, Same M.O., Same Result.
The Lennar Executives Standing in the Middle Are Jonathan Jaffe, Stuart Miller, and Emile Haddad.
Five Point Holdings is actually a holding company for the remnants of the old LandSource company used by Lennar to defraud CalPERS. In keeping with Lennar’s usual business practices, Lennar seized an opportunity to issue shares to the public in Five Point Holdings. Pricing on the shares was entirely dependent on asset valuations and future earnings projections – all prepared and certified by the Lennar executives – just like the LandSource CalPERS swindle. And the ultimate result of this scheme was also the same – In the LandSource swindle, CalPERS lost a billion dollars. In the Five Point Holdings swindle, investors have lost over 90% of their money.
On May 10, 2017, Five Point Holdings went public, trading under the symbol FPH. Twenty one million shares were offered to the public at $14.00 per share. The offering sold out. The share price even rose briefly to over $15.00. Lennar executives pocketed much of this money. Gullible investors accepted Lennar’s representations of asset valuations and future earnings potential. This was a bad idea. Ask CalPERS.
Five Point Holdings’ prospects diminished as soon as investors noticed that quarterly earnings reports came nowhere near the cooked-up projections used to support both the stock sale and share pricing. Investors have been fleeced to the tune of hundreds of millions of dollars.
Shares in FPH today trade for between $2.00 and $2.40, a loss of over 90% to investors. In August 2021, Mr. Haddad’s services as President and CEO of Five Point Holdings were terminated and replaced with a lucrative termination agreement. Included in the terms of the Haddad termination agreement, Mr. Haddad is entitled to receive over $5,000,000 annually for “consulting” services. Given that Five Point Holdings lost money every year – with Mr. Haddad in charge – since the public offering, and the stock price has declined over 90% – one might wonder: what was the real basis for this lavish termination package?
Not coincidentally, Stuart Miller was named executive chairman of Five Point Holdings at the same time Mr. Haddad’s services were was “terminated”, thereby removing all doubt as to who was actually pulling the strings from the beginning at Five Point Holdings.
In May of 2022, Five Point Holdings reduced its workforce by a third and posted a $37,000,000 loss.