Another OneCap Company Filing Chapter 7 Bankruptcy Protection

Another entity of hard-money lender OneCap is filing for Chapter 7 bankruptcy protection in Las Vegas.

The OneCap businesses, run by businessman Vince Hesser, pools investors’ money together and loans it out to real estate developers. Now the investors with holdings controlled by OneCap will have to endure delays while they pursue fraud claims against OneCap, according to the Las Vegas Sun.

The hard-money lending industry was a boom business in Las Vegas in the early part of the decade. High interest rates attracted developers who couldn’t or might not have been able to get traditional financing from the bank. When the housing market crashed, a lot of the high risk projects financed by these hard money loans went into default.

Investors have sued several hard money lenders in the time since then, saying that they were misled about the nature of the projects that they were investing in. They also claim, according to the Las Vegas Sun, that their investments were not handled fairly by the lenders.

For its part, the mortgage broker’s license of Hesser’s OneCap Mortgage Corp. was revoked by the state of Las Vegas Division of Mortgage Lending, following enforcement action by the agency that started in 2007.

OneCap Holding Corp., which is a company associated with OneCap Mortgage, filed for Chapter 7 liquidation in June. OneCap Mortgage itself is the entity that just recently filed for Chapter 7 bankruptcy.

OneCap Mortgage listed its assets as between zero and $50,000 in the filing, and $100,000 to $500,000 in liabilities.

As a part of the filing, a lawyer for OneCap transferred a pending lawsuit to the bankruptcy court, that had been in Clark County District Court. In the lawsuit, investors are up against businessman Hesser and OneCap, as well as a few other entities. The case dates back to 2007.

The plaintiffs in the case are Jacques Massa, Philip Hight, Emilie Lieuwen-Hight and Harvey Selcer, and the defendants are OneCap Mortgage, Ascendant Universal Fund I LLC, OneCap Partners MM Inc., OneCap Mortgage II, Hesser and Heidi Williams, according to the Las Vegas Sun.

The suit claims that OneCap engaged in fraud, negligence, breach of contract and additional claims. The investors are seeking money, which is now part of the bankruptcy estate, according to the Chapter 7 bankruptcy filing.

In a contentious claim, the suit also claims that the defendants who aren’t bankrupt are “alter egos” of the OneCap entity, or that they acted as one entity. The suit also asks that the bankruptcy court determine the nature of the interrelated entities, both bankrupt and not bankrupt. The suit also says that OneCap gave out loans in a variety of states, including Arizona, California, Colorado and Nevada.

In the suit, investors claim that Hesser and Williams misrepresented the value of the real estate that they were putting investor money towards. They failed to disclose, according to the suit, the extent to which they were already involved in the projects.

The claims against OneCap in the case continue. OneCap’s attorneys have denied the allegations.