Pacific Private Money’s mortgage fund seeks bankruptcy protection

Pacific Private Money Fund 1 LLC, an affiliate of the Novato real-estate lender run by Tiburon resident Mark Hanf, filed for Chapter 11 bankruptcy protection June 16 in U.S. Bankruptcy Court for the Northern District of California.

The petition estimates the fund’s assets and liabilities each at $10 million to $50 million and lists 100 to 199 creditors. It indicates some money will be available for unsecured creditors after administrative costs, though it does not estimate how much.

The largest unsecured claim is a $6.19 million note payable to Saluda Grade Alternative Lending & Fintech Growth Fund I LP of New York. The next two are funds: WE Alliance Secured Income Fund LLC of Roseville, at $3.7 million, and Versailles Inc. of Mill Valley, at $3.63 million. The rest of the 30 largest claims are owed to investors, many of them individuals in Marin County and elsewhere in the Bay Area.

Hanf signed the petition as president of Private Money Management Group LLC, the fund’s manager. The case number is 26-30534.

The bankruptcy follows months of regulatory and legal action against Hanf and his companies. The California Department of Financial Protection and Innovation revoked an affiliate’s lending license in April and issued a desist-and-refrain order in May, finding the firm had omitted material information while it raised more than $100 million from hundreds of investors. Some investors say they have been unable to access their money since December. A federal lawsuit filed in April alleges Hanf-controlled entities funneled $75.8 million in investor money to insiders.

The Marin County District Attorney’s Office is also investigating.