Judge Ervin told everyone in attendance he had no court reporter, due to the flu, but would review the status. He stated the court received timely items and went down the list of claims, which totaled over $1,000,000. There was no claim from Sierra County for 10 years of back taxes. County Counsel stated the county knows the money available isn’t sufficient, as the property didn’t bring in enough to pay all claimants.
Judge Ervin said the court’s interest is in trying to get in a posture of agreement, adding there were multiple claims against a limited amount. He couldn’t say what the distribution would be and if there was no agreement, claimants could file an appeal.
Doug Lawler wanted to make sure they were free and clear debtwise and asked about getting a warranty deed, as it was nearly impossible to get financing without an insurable deed. Judge Ervin said the previous court order stated the deed would be clear of all encumbrances. He added that the funds were tenured at the last possible day, but the deed had numerous discrepancies that needed to get straightened out. One was the LLC didn’t come into existence until February 12, 2020 when Doug was added and a comma on the deed was a problem, so Judge Ervin wasn’t signing until it was fixed, adding it needed to be precise.
Judge Ervin asked the super lienholder, Carl Tolbert, how flexible he was on his claim. Tolbert stated the sale needed to happen, as it had already taken way longer than it should have. His biggest concern was about setting precedence. Tolbert stated they paid everyone $3,000 to leave their homes, adding “it was the wild west out there and it was a gamble.” He said there’s no market for land in Loyalton, so they took a risk. Judge Ervin stated this was “off the rails” from the beginning and asked Tolbert again if there was some flexibility to come to an agreement, adding it could go on for another couple years if they couldn’t. Tolbert stated money and time were just a number and there was some room to discount something so it didn’t go to an appeal. Yatteau said the Receiver put in over $100,000 of his personal funds, but was open to discussing to come to an agreement. From the audience, Paul Roen stated his money was used the same way. He wanted to make sure his claim was considered as a portion, adding he didn’t place interest on it.
From the City of Loyalton, Joy Markum stated the City would be as flexible as it could be, but hoped to receive a little money owed them.
Tolbert wanted an agreement to happen that day and County Counsel offered to sit down and negotiate with claimants present.
Judge Ervin set aside $34,000 for individual claimants and the rest was to be negotiated behind closed doors with the Receiver’s office by phone, super lien holder Tolbert, Roen, and Loyalton City Council member Joy Markum.
Markum emerged soon after, stating she felt it was unfortunate no party was willing to have Loyalton compensated for its loss.
Judge Ervin gave 30 days for remaining claimants to come forward for determination of funds on March 27th at 11 a.m.