-7-
4/1/90 3,156.26
5/1/90 3,156.26
6/1/90 3,156.26
6/30/90 3,156.26
8/1/90 3,156.26
9/1/90 3,156.26
10/1/90 3,156.26
11/1/90 3,156.26
Total 31,562.60
The monthly payment statements with respect to these investments
indicate that the majority of the payments included an "L"
notation.
The Demise of Pioneer Mortgage
In late 1990, Pioneer Mortgage acknowledged certain financial
difficulties. In December 1990, Pioneer Mortgage stopped advancing
funds to the borrowers, and failed to make interest payments for
the first time. On January 9, 1991, Pioneer Mortgage and its
interrelated companies filed for Chapter 11 bankruptcy protection.3
Shortly after Pioneer Mortgage’s bankruptcy filing, the facts
surrounding the company’s downfall became public. Apparently
Pioneer Mortgage’s financial difficulties began as a result of the
rapid expansion of the company into new types of products. Before
the mid-1980's, Pioneer Mortgage primarily arranged short-term
loans that were secured by first- or second-trust deeds on single-
3 The bankruptcy court concluded that, contrary to
petitioners' belief, they did not own a direct interest in
borrower notes secured by trust deeds, but rather, petitioners
were unsecured creditors of Pioneer Mortgage. In 1991, all of
the Pioneer Mortgage investors (including petitioners) were
required to relinquish their investments to a new entity called
Pioneer Liquidating Corporation.
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Last modified: May 25, 2011