Tuesday, August 07, 2012

Man, that $100 million just blew through my fingers

Russell Wasendorf, Sr. is just one of many in a parade of executives – financial firm and other – who’ve stuck their hands up to their shoulders into their firm’s till.

Wasendorf, St. – for those for whom the name is not Madoff-ian household familiar – was the founder and CEO of the Peregrine Financial Group, a Cedar Falls, Iowa futures broker that recently filed for bankruptcy in the wake of Wasendorf, Sr.’s confession that he’d stolen $100 million from his customers over the past 20 years.

Of course, $100 million ain’t what it used to be. Still, even by relatively chump change standards, the bankruptcy receiver poking around trying to see if there’s anything they can sell off so that they can start making good with the bilked customers is finding precious little to dispense with.

So far, the most indulgent goodie they’ve come up with is a backyard pool with retractable glass roof. Now, in Cedar Falls, Iowa, a retractable pool roof can only be a good thing. But it’s one of those good things that pretty much has to stay in place. Unlike, say, his and her Bernie and Ruthie Rolexes, no one is going to wake up one morning and say, ‘Hey, I’ve always wanted a pool with a retractable roof, and it looks like I can get this one for a song.’ No, this would only do someone good who wanted to live in Cedar Falls, Iowa. (Not that there’s anything wrong with living in Cedar Falls, Iowa, mind you, or neighboring Waterloo, Iowa, either. It’s just that there probably aren’t a lot of folks who would up and re-lo there just to take advantage of a good deal on a swimming pool with a retractable roof. Even if you throw in the nifty backyard tree house I forgot to mention.)

The “2,000 bottles of wine, pickup trucks and some high-end photography equipment” should be easier to move. But even if the wine cellar is long on Chateau Laffite Rothschild and short on two-buck Chuck. Even if those pickup trucks are all Escalades, and the photography equipment more Leica than Kodak, the proceeds of the fire sale aren’t going to make the bilkees $100 million worth of satisfied.

Also on the list of sellable items: “a large amount of home-canning equipment.”

Now if that isn’t a nice American Gothic touch, I don’t know what is. (‘Well, Ma, may have lost our shirts investing with Russell Wasendorf,*Sr. – it’s a pity, the fellow seemed so derned nice – but maybe we can head on over to Cedar Falls and pick up some Mason jars and a pressure cooker for our troubles.’)

All in all, the take so far is disappointing:

"At this point we are not talking about Ferraris or Lamborghinis," said [Michael] Eidelman, whose court-appointed job is tracking down and selling Wasendorf's assets at the highest price. "We do expect and we hope that we are going to find more assets as the investigation goes on."

While the receiver has noted that the hunt for the Wasendorf assets is still in its early stages, Wasendorf’s confessional note, written before his botched suicide attempt, suggests that most of the $100 million was poured back into keeping the business going. (Maybe these job-creators really are noble souls…)

Wasendorf did build a brand-new, state-of-the-art $20-million office building and owned a downtown Cedar Falls restaurant named myVerona.

(MyVerona was opened as a pot-sweetener for Peregrine employees who followed Wasendorf, Sr. to Cedar Falls when he moved the company there from Chicago. He wanted to make sure that those giving up the glories of Chicago would at least have one decent place to eat.  Wasendorf, Sr. also started an organic farm to supply MyVerona and, I guess, provide produce for the home canning enterprise. Source: WCF Courier.com)

Wasendorf, Sr., didn’t completely shake Chicago off his shoes. He maintained a high-rise condo  - owned free and clear - overlooking Lake Michigan. (The private jet that trundled Wasendorf, Sr. back and forth between Chicago and Cedar Falls was heavily mortgaged, so no there-there for the claimants.)

Other assets of interest (to me, anyway) included Wasendorf, Sr., holdings in Romanian real estate. Which makes me wonder whether Wasendorf, Sr., was, like my mother, from a  Volksdeutsche family. (Sometime in the late 1700’s, my mother’s family had emigrated from the Stuttgart area to the frontier of the Austro-Hungarian empire. O, pioneers! After the first world war, the area where they settled became part of Romania, where my mother was born. Maybe Wasendorf and I are  even – yuck – related.)

But my personal favorite seized asset was found in a vault at Peregrine HQ:

Silver SpongeBob SquarePants coins minted by a private company in New Zealand.

Among other Peregrine units, all – sniff, sniff – started to try (according to Wasendorf, Sr.) to make good on the “borrowed” $100 million, was a precious metals company whose wares included “novelty items.”

A four-coin set of SpongeBob Squarepants, housed in a "distinctive" treasure chest, went for $259, according to a Website that displays both the PFGBest logo and that of the New Zealand Mint.

Each coin in the set shows a character from the Nickelodeon animated series and bears the inscription "IN SPONGEBOB WE TRUST."

Well, I guess if I had to trust either Russell Wasendorf, Sr., or SpongeBob, my vote would be SpongeBob. And that goes for Squidward and Patrick, too.


Source (other than otherwise noted): Huff Po August 6 and HuffPo July 18.

*And, why oh why oh why oh, why do I want to write “Wagendorf” instead of “Wasendorf”. I must somehow be channeling Groucho Marx.

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