LAS VEGAS, April 24, 2006 (PRIMEZONE) -- Vestin Mortgage, Inc. responded today to the State of Hawaii's statement to the media that it plans to file suit against the company in the RightStar Management Company matter.
Vestin said, "We first brought to the public and to the State of Hawaii the looting of the RightStar trusts by its trustees 18 months ago. The fact of the matter is that the State was remiss in both its regulatory responsibilities and its legal responsibilities to the RightStar contract holders and to the taxpayers of Hawaii.
"It is our belief," Vestin continued, "that this proposed lawsuit by the State of Hawaii is simply in retaliation to the litigation we filed on Friday. We filed that litigation, which accused the State of negligence and malfeasance, as a last resort, because the State has been dragging its heels on the RightStar matter for 18 months. If the State Attorney General had thought there was some wrongdoing on the part of Vestin, he surely would have taken action earlier."
The company said, "The State's early lack of oversight and dilatory performance in the RightStar matter has cost the taxpayers dearly. We've tried to settle this matter repeatedly and we are fast reaching the point where we may, because of the State's irresponsible position, have to close the RightStar properties at a severe cost to its contract holders."
Vestin said, "We're simply an investor that arranged for a group of lenders to make a $35 million loan. Because of the State of Hawaii's intransigence and lack of oversight we have now had to assume the role of 'White Knight' at RightStar and are assiduously trying to protect our investment, our shareholders and RightStar contract holders."
With regard to a public comment by a State employee that "Vestin was responsible for inducing the improper diversion of more than $20 million" in funeral plan trust funds owed to RightStar customers, Vestin stated, "The RightStar trusts considered its $20 million in Vestin Fund II, LLC (now Vestin Mortgage Realty II, a Real Estate Investment Trust that will trade on Nasdaq under the symbol VRTB) a solid investment. Additionally, neither Vestin, nor RightStar is responsible for investment decisions made by the Trust's independent Trustees. Those decisions are solely restricted to the independent Trustees. If the State of Hawaii believes the independent trustees acted improperly, it should have long ago pursued recovery actions against those trustees. Arguably, it was one of, if not the best investment the RightStar Trusts made: Since its initial investment on December 10, 2001, the Trusts received income of $7,644,668.