A simple gaffe cost one back millions of dollars.
In 1969, a vast tract of land in Sacramento County, CA was acquired by the Operating Engineers Pension Trust Fund. A portion of the land, 57 acres to be exact, was transferred to a local home building firm in the area. However, the builder was way behind its payments so the trust fund’s union filed a foreclosure lawsuit. It won and soon the land was auctioned off in 2004.
During the auction, Bruce Palmbaum won and paid for the entire 57 acres for a measly $2,000. Surprisingly, someone was supposed to offer a higher amount but the union’s lawyer and its asset manager was stuck in traffic so they failed to arrive on time. Apparently, the union is still trying to recover their loss and have the auction sale changed. And yes, they changed their lawyer a long time ago.
Recently, the Sacramento Bee (the site has the full story) reported that the land, now known as Rancho Murieta, is valued at $27 million. That’s what gives the union another cause of headache.
On the other hand, we suspect that Palmbaum is still deciding how to develop the land.
Here are three lessons that everyone should learn.
First, allow plenty of time for traffic and please, find a shortcut when you’re heading to the auction. Incompetence on the part of the union’s lawyer is apparently the cause of their loss. Anyone who’s professional sure knows what time management is – even if you’re stuck in traffic.
Second, remember that foreclosures are always published in advance and notices are sent to the parties involved. If you were the union’s president, you should have been aware of this.
Finally, always expect that unions have to make money. They went after and won a case against the home builder for more than $17 million and not surprisingly, they won’t let Palmbuam’s deal just pass.