Mariposa Losses

[Retired CPA]

Based on the summary of “at the meeting” it appears the entrenched board will be digging in its heel, and not making any changes. This is disappointing. What I find most disingenuous is trying to say the 4.5 1994 land purchase is a positive thing because it is now worth around 9 million dollars.

The Mariposa losses can be reconstructed from the tax returns, but it will require a lot of work. I haven’t decided if I will undertake this or not. I believe people have a right to full transparency and that includes a detail of the Mariposa Losses.

If I had to guess at the total losses incurred on this 4.5 million dollar investment I would estimate somewhere between 20 million on the low end and 40 million at the high end.
That certainly puts a different perspective of how this investment performed over the last 25 years.

In the summary it was said that they spent a lot of money because they thought they had an investment worth over 100 millions dollars. If this is in fact the case, would’nt it be the boards fiduciary duty to proceed with litigation against the appraisal co. who did this evaluation. I am not an attorney so I don’t know, but appraising something at 100 million when it is only worth 9 million doesn’t seem right.
The case-Shiller home price index showed a 34% peak correction in 2009. Not sure if this correlates to land, but it’s the only benchmark I have.
So even if you say they had a 50% decline due to the real estate crash that would still leave a value over 50 million.

How can you make spending decisions based on an illiquid asset that you have no idea when you will realize this money. I am not going to spend money based on my expectation of a possible return on an investment sometime in the future that may or may not pan out.

[Retired CPA]

Please note the above post should read….it appears the board will not be making any changes to management. They are going to make some changes to spending, and will put more efforts into fundraising. This may well include pay cuts for executives, but I don’t know.

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