Tim Kiladze of the Globe & Mail has been writing about League. Earlier this year he stopped short of calling them a Ponzi while stating that LISI staff told him they could only fund investor redemptions by finding new investors to invest. It takes a brave journalist to continue reporting when the defamation suits start to fly. His new article is fantastic (mostly because I’m in it and I’m so humble)
Emmanuel Arruda considers me to be part of the “insane clown posse of internet detractors” He’s also quoted as saying the “numbers side of business is not his thing.” The insane clown posse of internet detractors is given equal importance as the 2008 financial crisis in League’s downfall. Both reasons are completely ridiculous and underscore Emmanuel’s complete lack of understanding of the REIT business model and how it works.
Frankly it doesn’t matter a whit about internet posses. I was sued by League for defamation and every single one of my tenants paid me rent and I turned it over to the owners and no one lost income. Is Emmanuel Arruda claiming that tenants wouldn’t rent space in his 25% vacant cash bleeding malls because of the League Reviewed site? In fact I’m pretty sure there are a lot of people who think I’m crazy and an asshole and even more who actively dislike me, and a few landlords I fired and hundreds of tenants evicted who are not my fans. I still collect rent and provide housing and my business goes on. There is no such thing as a popular landlord.
The credit crisis was in 2008… over 5 years ago, what does that have to do with anything relevant? No one is forcing you to over leverage yourself, or to continue to do deals when it’s unprofitable.
If you’re a landlord it doesn’t matter one single bit what people think, tenants still have to pay you rent or move. So your income should still be secure.
The only thing I did was warn new investors away from his and Gant’s scheme. I couldn’t do one single thing to save the existing investors from them or minimize the impact. Frankly I feel guilty I did too little too late. I mostly only took interest in exposing their own financial statements after they sued me. The only way I could be hurtful to them is if their stated business of real estate was a sham and the majority of their income came from raising funds from new investors. Naive new investors. Fodder for the League grist mill.
Emmanuel claimed I told people to call BCSC about their going public and this ruined their chances. What. A. Steaming. Pile. The whole idea of “going public” is that you actually have a business that generates a return for investors and that it’s so good you need/want to share it with a greater market. In League’s case, they were already broke and many of their investors wanted out because they ceased distributions on their common shares. The whole idea of a public market is that there is someone on the other side that wants to buy. Nothing could be further from the truth and as any REIT that ceased distributions on the public market can tell you… no one wants your crappy non distributing REIT and investors will sell those shares for pennies on the dollar. That is what would have happened with League had it been approved for listing. Penny stock. Arruda and Gant published an article implying that investors would gain 17% on the public market when League went public. What a complete crock of lies and misdirection.
Finally, to any CEO of any company that “doesn’t get the numbers”. What do you think your job is? Maybe wig holder-upper? Toilet holder-downer? Office spacer? Most people would think that a CEO’s job would be interpreting the numbers and providing guidance and direction to the company and employees and investors and shareholders. In your case, obviously that would be wrong, because numbers are not your thing. Maybe you could let a little reality penetrate your woo bullshit and really accept what you’ve done. You and Adam Gant are solely responsible for separating 4200 investors from $370, 000, 000.00.
I may be insane but you’re the clown.