The CEO of a troubled Southern Nevada real estate investment trust has resigned and a Chicago company has been hired to manage the firm.
Desert Capital REIT Inc. of Henderson on Monday disclosed the resignation of CEO Todd Parriott and the hiring of MorrisAnderson & Associates Ltd. to manage the company and assist it in preparing a reorganization plan.
Desert Capital, a hard money lender and investor in real estate and mortgages, was hit with an involuntary bankruptcy petition on April 29 by lenders owed $43.7 million.
Under the deal with MorrisAnderson, a managing director there, David Bagley, was appointed president and chairman of the board of Desert Capital.
MorrisAnderson is a consulting firm for distressed and underperforming companies and Bagley is a turnaround specialist there.
Desert Capital, which has seen its fortunes decline amid the worst economic downturn in memory in Southern Nevada, with many of its borrowers defaulting on loans, lost $1.947 million in the first quarter.
At the end of the first quarter, it reported liabilities of $55.7 million vs. assets of $25.1 million.
Parriott, in the meantime, also ran CM Capital Services, formerly known as Consolidated Mortgage Co. LLC. In March it agreed to pay a $200,000 fine for lending violations under a settlement with the state.
CM Capital Services, which originated loans and serviced them for Desert Capital, in March also was not able to comply with the solvency requirements of that settlement agreement and forfeited its mortgage license to the state.
That forced it to cease its loan origination business.
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