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Ron Greenspan, court-appointed receiver now in charge of Aequitas Capital Management, and a vastly downsized Aequitas workforce, now work on the third floor of this Kruse Way office building. Their mission: Sell off the company's remaining assets and generate some sort of recovery for investors.

(Jeff Manning/The Oregonian)

Ron Greenspan has a $710 million problem.

As the court-appointed receiver in charge of Aequitas Capital Management,

his job is to liquidate the Lake Oswego company's assets and return to investors and lenders the massive sum of money they poured into the operation.

A challenging task in normal times, it becomes more difficult in the

face of Aequitas' collapse into scandal and disgrace. The U.S. Securities and Exchange Commission sued the company and three former top executives last month claiming they concealed the company's insolvency for two years in order to continue raising money from investors.

"Ron has a Herculean task," said Chris Bean, head of Private Advisory Group, a Redmond, Wash.-based investment adviser who claims he was among those misled by Aequitas. "It took over a month just to understand the web of companies Aequitas had built. Determining how to maximize investor recovery at the asset-specific level is going to be extremely difficult."

Greenspan declined to be interviewed. Multiple sources inside and outside

Aequitas say the receiver has been taken aback by the chaotic and complex nature of the company's financials. The Aequitas machine consists of more than 60 companies, including debt-buying operations, investment funds, publisher of an online college directory, even a horticultural nursery in Mt. Vernon, Wash., and a boutique winery in Carlton. Few appear to be overwhelmingly successful, and many are laden with debt or political baggage that complicates efforts to sell them.

Aequitas and its affiliates owe about $110 million to a variety of lenders and another $600 million to investors. In the pecking order of bankruptcy-style liquidations, lenders generally get paid before investors. "Based on our investigation, we believe that most, if not all, of the assets having any meaningful value are locked up in special purpose entities for the purposes of securing loans by banks and other institutional lenders," said Keith Ketterling, a Portland attorney representing Aequitas investors.

Selling off Aequitas assets isn't the only source of potential recovery

for investors. Many have already lawyered up and filed suit against Aequitas' accounting and law firms. More lawsuits are certain to follow.

Still, coming up with a 100 percent recovery for investors will be difficult.

In a similarly high-profile financial scandal from 2000-2001, investors in failed money manager Capital Consultants extracted hefty settlements from a number of parties. Even so, they managed to recover only $259.5 million out of $470 million in total losses -- 55 cents on the dollar.

"Receiverships present significant challenges," said Bob Miller, a Portland

attorney who played a prominent role in the Capital Consultants case. The receiver has to identify and sell off assets, pay for the legal work and transactions costs while dealing with impatient and unhappy investors.

"While better results can and have been achieved, recovery in the 30-50 percent range is considered good," Miller said of receivership cases in general. He added that he's unfamiliar with the specifics of the Aequitas case.

Ketterling, Bean and others said they've been impressed with Greenspan

and the crew he brought with him from FTI Consulting, which specializes in crisis management. Investors can only hope they are good at what they do, since Greenspan and his team will get paid out of the Aequitas estate, also. Greenspan successfully asked the court that he be paid $825 an hour and that at least six other FTI co-workers get paid between $250 and $660 an hour.

The court also OK'ed at least 12 attorneys, paralegals and assistants to represent the receiver and what's left of Aequitas, the most senior of them charging $500 to $850 an hour.

One of Aequitas' largest assets may be impossible to sell at any price:

More than $200 million worth of student debt issued by Corinthian Colleges, a defunct chain of for-profit colleges.

The U.S. Consumer Financial Protection Bureau sued Corinthian last year

claiming the loans were predatory and in violation of consumer protection laws. Aequitas bought more than half-a-billion-dollar's worth of Corinthian loans between 2011 and 2014, which proved highly profitable for the company. But it also drew the attention of the Consumer Financial Protection Bureau, which pressed Aequitas to forgive 40 percent of the debt.

Before they could reach a settlement, Aequitas collapsed and the Securities and Exchange Commission filed its own complaint alleging widespread fraud.

The issue to some degree pits federal agency against federal agency. Allowing Greenspan to sell the loans would be good for investors, the key constituency of the Securities and Exchange Commission. But selling the loans to another debt collector would be bad for student borrowers that the Consumer Financial Protection Bureau has tried to protect.

"It's just a horrible dilemma," said Mike Esler, a Portland attorney representing Aequitas investors. "My heart goes out to the young people who have mortgaged their future for a worthless degree and to the retired investors who put their nest egg in a corrupt company."

The bureau, which declined to comment, has not intervened in the Securities and Exchange Commission's lawsuit against Aequitas. But in past statements, it said it "remains concerned about efforts to collect on loans made in association with Corinthian's illegal conduct."

There are other debt-buying businesses within the Aequitas umbrella.

The company purchased consumer installment loans from Freedom Financial

Asset Management, a Bay Area lender. But the receiver's efforts to sell the approximately $80 million portfolio has been complicated by Comvest Capital.

Aequitas borrowed $65 million from Comvest early last year and put up

the Freedom Financial portfolio as collateral. Comvest claims Aequitas has defaulted on the loan and is seeking to repossess the Freedom loan portfolio.

Aequitas' CarePayment subsidiary holds about $50 million in debt owed

by consumers to hospitals and other health care providers. CarePayment continues to operate and is widely regarded as the most promising and potentially most valuable business within Aequitas.

Greenspan "has spent of lot of time working with the CarePayment management

team to help them stand independent from Aequitas," Bean said. "Their success thus far is related to the talent and efforts of both the Receiver and the CarePayment management team."

Bean said the receivership could be a long drawn-out affair. To attract

top-dollar, CarePayment needs time to prove it can operate successfully without Aequitas. "This is going to be a long process. We expect it will take a couple of years," he said.

-- Jeff Manning

503-294-7606, jmanning@oregonian.com