Professional Profile: Peter A. Davidson – Mr. “Ask the Receiver"
As interviewed by Kathy Bazoian Phelps, Editor, Receivership News
The subject of this month’s profile needs no introduction to Receivership News (RN) readers. Peter Davidson not only has had “Ask the Receiver” column appear in every issue of RN since its reformatting in 2002, answering 79 receivership questions so far, but Peter was also the original editor and has authored many articles for Receivership News, serving in that capacity from 1996 to 2002. He also designed our “In Custodia Legis” logo and came up with the idea for our “Ask the Receiver” and “Heard in the Halls” columns. In addition to his literary achievements, including packaging some of his columns and blogs into a book: “Ask the Receiver” (still available on Amazon), he has served as Co-President of the Los Angeles/Orange Chapter of the Receivers Forum; President of the Los Angeles Bankruptcy Forum; and Chair of the Los Angeles County Bar Remedies Section. Peter’s contribution to the receivership community has been extraordinary, and I was honored to interview him on behalf of RN for this issue.
Peter, how did you get involved in receiverships?
I was a first year associate at Jones Day in Los Angeles, having graduated from UCLA Law School, when the best friend of the managing partner was appointed as receiver in a case brought by the California Department of Corporations to enforce the then new Knox – Keene healthcare law. I was assigned to the case and started reading everything I could find on receiverships. The case lasted five years. I was given a lot of responsibility and learned a lot. The receiver told me early on that my primary job as the receiver’s attorney was to: “protect the receiver,” and I have always taken that to heart in representing receivers. That client went on to be appointed in a number of other enforcement cases brought by the Department of Corporations and then the Federal Trade Commission, where I represented him. Another friend of the managing partner, who was wrapping up the Equity Funding case, one of the major fraud cases in the 1970’s, was appointed in an SEC enforcement case, and I started representing him in SEC and FTC receiverships. After nine years I left Jones Day and joined David Ray’s firm, representing him in all types of receivership cases and then bankruptcy cases. There I met Byron Moldo, and he and I have been partners for over 30 years at a number of firms, including our own, handling receivership and bankruptcy matters. We both joined Ervin Cohen & Jessup, LLP in Beverly Hills nine years ago and continue that practice.
What types of receivership cases have you handled?
I have handled all types of cases, both as receiver’s counsel and as a receiver, a conservator, and a court appointed monitor. My experience has included law firm liquidations which are always interesting and a little unsettling, especially when you have 30 or 40 attorneys looking over your shoulder. I have also handled other types of partnership and shareholders disputes, cases involving a gold mine, cellular telephone licenses, a cattle ranch, ancient roman coins, mortgage and finance companies, and a money order company. The fun part of acting as a receiver, or receiver’s counsel, is the diversity of businesses and issues you get to deal with. My favorite type of cases, however, are fraud cases, which are usually government enforcement cases, involving securities or consumer fraud, and, of course, Ponzi schemes. I have also developed an expertise in liquidating escrow companies. Over the years I have handled 21 escrow company cases, either as a conservator or receiver.
Are there any particular cases that were your favorites?
SEC vs. J.T. Wallenbrock was a SEC Ponzi scheme case where Byron Moldo and I represented the receiver, James Donell. Like in most Ponzi cases, we eventually sued what we call the “winners,” to recover the false profits they received. One of the cases I tried was appealed to the Ninth Circuit, where I successfully argued that the receiver had the ability to recover the false profits as fraudulent transfers. The decision, Donnell vs. Kowell, 533 F.3d 762 (9th Cir. 2008), is now the seminal case in the Ninth Circuit and has been cited 290 times so far.
Another interesting case, brought by the Department of Corporations, involved a number of real estate limited partnerships. The interesting part was that all of the defrauded investors were Orange County sheriffs. Opposing counsel was Raymond Ikola, who eventually became a judge in Orange County and now sits on the Court of Appeal. The judge, it turns out, was Bob Mosier’s father-in-law. The case was also interesting because some of the property was in Colorado and we had to establish an ancillary receivership there. When we went to sell a huge parcel of property in Colorado Springs, we had to have both courts approve the sale. At each motion to obtain approval we had overbids, so that we then had to go back to the other court to get approval again. This happened two or three times before we eventually sold the property for much more than was initially sought.
Another fun case was called California Flowerland, an SEC securities fraud case, involving limited partnerships that were investing in the growing and selling of ornamental plants for offices, which was the rage at the time. The interesting part was that there were a number of huge farms in Florida that were growing the plants that the partnerships owned. When the auditors would come to examine the inventory, the fraudsters merely changed the signs in front of the acres of plants designating which partnerships owned the plants. The auditors did not catch on. Later it was revealed that if one added up all the plants described in the various prospectuses, they totaled more than all the plants that existed in the world.
My most successful bankruptcy case was In Re George’s Marciano, 446 B. R. 407 (C.D. Cal. 2010) aff’d 708 F.3d 1123 (9th Cir. 2013), where I represented the creditors committee. Marciano is one of the Marciano brothers who established Guess Jeans. Not only was the case the largest individual involuntary bankruptcy case, but was also a cross border case involving assets in the United States and Canada, including mansions, office buildings, an art collection and the Choie diamond, an 84.37 carat diamond purchased by Marciano for just over $16 million dollars. While the case was long and hard fought, creditors ended up getting paid in full, plus interest. Other fun cases, in hindsight, have included representing the trustee in the bankruptcy cases of Michael Jackson’s parents and the bankruptcy cases of his brothers, Tito and Jermaine. Other than the celebrity aspect, there were interesting issues related to the ownership of a warehouse of Michael Jackson memorabilia and documents, which was leased in Tito’s name.
What are your interests outside of the law?
First and foremost I like spending time with my family. My lovely wife, Idelle, and I have been married for 43 years. We met as juniors at UCLA, both working our way through college in the medical records department of the UCLA hospital. We were married the week before law school started. Idelle was getting her master’s degree while I was getting my law degree and neither of us worked, so dinner was often soup heated in the microwave at the law school. Looking back, we did o.k. as starving students. Idelle eventually changed careers to become a journalist. Her worked has appeared in the Washington Post, the Los Angeles Times, and in numerous magazines. She also published a book: “Your Brain After Chemo.” We have two sons who are also accomplished. One has his MBA and is the Senior Director of Finance for Swedish Medical Group in Seattle, an affiliate of Providence. Our other son has his PhD in immunology and is the president of a pharmaceutical startup, which is starting its phase three study of a drug to eliminate molluscum, a skin disease affecting children. He is also the founder of Think Gum, a chewing gum company (check it out at thinkgum.com). We also have five wonderful grandchildren who we thoroughly enjoy.
Besides family, when I was 41, going through a midlife crisis, I decided to become a runner; something I hated in high school. Idelle and I trained for and ran the LA Marathon. Since then I have run nine marathons, although in the past few years I have given up marathons in favor of shorter distances. I also enjoy painting and gardening.
You are one of the original members of the Receivers Forum. Do you think the Forum has accomplished its purpose in the intervening 20 plus years?
I think the Receivers Forum has done a great job. The purpose originally was to educate the court, attorneys and receivers about receiverships and to increase standards. Over the years the Receivers Forum has put on many great conferences and individual programs, which I have been pleased to have participated in. I am proud to say Receivership News has gone a long way in educating the bar and bench regarding receivership issues, receivership law, and the use of receiverships to resolve disputes, as well as protecting the public and collecting judgments. The members of the Forum have devoted hundreds, if not thousands, of hours on these topics and they should all be congratulated.
This professional profile first appeared in Receivership News, Winter 2018, Issue 62.
Peter A. Davidson is a Partner of Ervin Cohen & Jessup LLP a Beverly Hills Law Firm. His practice includes representing Receivers and acting as a Receiver in State and Federal Court.