On Monday 6/15, the receiver will appear in court and present the next receiver's report. We do not know what the report will contain or what will be discussed. We are hoping that there will be some answers to the following questions.
Judge Garcia had indicated a strong preference to have the election completed in the month of May. Due to extreme difficulties in sorting through the HOC's records, the audit has taken considerably longer than expected. We will remain in receivership (which is very costly) until the audit and election are complete.
We can only hope that the receiver's report and court hearing on 6/15 will provide some definitive answers.
(See also blog entry from 5/15)
On 4/22, the receiver presented his last report to the court. This report included the (now infamous) Sher/Shaw 'Invoice' for $17.6K plus ongoing payments of $5.9K per month. The invoice also referred to a contract that allegedly spelled out the terms of payment.
You can view that report by clicking HERE.
To view the just the invoice, click HERE.
To view the contract, click HERE.
After reviewing the invoice and hearing arguments from the Shaw sisters, Judge Garcia scheduled a special hearing on 5/5/15, specifically to address the Sher/Shaw invoice. At this hearing, the contract was presented as evidence, and Jack Shaw took the stand to make his argument about why he & Robert should be paid.
To view the transcript of the 5/5 hearing (including Jack Shaw's testimony), click HERE.
Jack Shaw tried to explain what he did for Cedar Run and how he is entitled to payment for all the money he has 'saved' for the association and for the homeowners. To add insult to injury, he also claimed that he was giving us a discounted rate from what he would normally charge a business or association to consult for them and 'revive' them from financial ruin.
Despite the contract and Jack Shaw's long speech about everything from goose droppings to financial audits, the judge was not convinced, and Sher's/Shaw's payment request was denied.
Also notable was the discussion between Judge Garcia and Anne Shaw about certain invoices that she sent to the receiver, requesting payment. To Anne's own admission, she had double-billed for $1860. But from there, it gets even more interesting.....
Judge Garcia had actually gone line-by-line through another Shaw Legal Services invoice (totaling about $12,000) and spotted charges that he felt were redundant and unnecessary. An example of this would be when two attorneys from Anne's firm had both billed time for what appeared to be the same task. Another would be when an outside attorney was brought into the case, and Shaw Legal Services billed Cedar Run for the time it took to brief this attorney on the case.
After all was said and done, Judge Garcia rejected $7,560 in charges from Shaw Legal Services.
The former HOC board had filed a claim with Chubb Insurance to cover their legal costs in the bank litigation. When this happens, normally the attorney would submit their bills directly to the insurance company for payment. However, Anne Shaw has opted to do it a bit differently.
She has been submitting her bills directly to the association (Cedar Run HOC), collecting payment for those bills, and then leaving it up to the board to request reimbursement from Chubb. Why is this a concern? Because, as Anne Shaw admitted herself, legal bills submitted to Chubb are "strictly scrutinized", and Chubb will deny portions if they don't agree with them.
Why is this a big deal?
Because Shaw Legal Services is being paid UP-FRONT with Cedar Run homeowner funds before the bills are submitted to and "strictly scrutinized" by Chubb. If certain portions are denied, it makes no difference to Anne Shaw.......She's already been paid in full!! The Cedar Run homeowners are on the hook for any portion that Chubb denies....unless Anne Shaw credits this money back to the HOC. Has she ever done this?? Doubtful, but we will have to wait for the audit to find out.
We have reason to believe that there may be a considerable amount that Chubb would deny. Much of Anne's efforts in the bank litigation have been outside the realm of defending the HOC board and much more in the realm of offensively attacking the banks and phase associations. Chubb will only cover legal costs that they believes are necessary to defend the board.
There may not be anything illegal about this billing practice. It is just irregular, unorthodox, unethical, and very unfair to the Cedar Run homeowners.
- When will the audit be complete?
- When and how will the audit results be disseminated to the homeowners?
- What is the time-frame of the upcoming election?
Judge Garcia had indicated a strong preference to have the election completed in the month of May. Due to extreme difficulties in sorting through the HOC's records, the audit has taken considerably longer than expected. We will remain in receivership (which is very costly) until the audit and election are complete.
We can only hope that the receiver's report and court hearing on 6/15 will provide some definitive answers.
Recap of previous court hearings
(See also blog entry from 5/15)
On 4/22, the receiver presented his last report to the court. This report included the (now infamous) Sher/Shaw 'Invoice' for $17.6K plus ongoing payments of $5.9K per month. The invoice also referred to a contract that allegedly spelled out the terms of payment.
You can view that report by clicking HERE.
To view the just the invoice, click HERE.
To view the contract, click HERE.
After reviewing the invoice and hearing arguments from the Shaw sisters, Judge Garcia scheduled a special hearing on 5/5/15, specifically to address the Sher/Shaw invoice. At this hearing, the contract was presented as evidence, and Jack Shaw took the stand to make his argument about why he & Robert should be paid.
To view the transcript of the 5/5 hearing (including Jack Shaw's testimony), click HERE.
Jack Shaw tried to explain what he did for Cedar Run and how he is entitled to payment for all the money he has 'saved' for the association and for the homeowners. To add insult to injury, he also claimed that he was giving us a discounted rate from what he would normally charge a business or association to consult for them and 'revive' them from financial ruin.
Despite the contract and Jack Shaw's long speech about everything from goose droppings to financial audits, the judge was not convinced, and Sher's/Shaw's payment request was denied.
Shaw Legal Services Billing Discrepancies
Also notable was the discussion between Judge Garcia and Anne Shaw about certain invoices that she sent to the receiver, requesting payment. To Anne's own admission, she had double-billed for $1860. But from there, it gets even more interesting.....
Judge Garcia had actually gone line-by-line through another Shaw Legal Services invoice (totaling about $12,000) and spotted charges that he felt were redundant and unnecessary. An example of this would be when two attorneys from Anne's firm had both billed time for what appeared to be the same task. Another would be when an outside attorney was brought into the case, and Shaw Legal Services billed Cedar Run for the time it took to brief this attorney on the case.
After all was said and done, Judge Garcia rejected $7,560 in charges from Shaw Legal Services.
Another Raw Deal for Cedar Run Homeowners
What was also uncovered in the review and questioning of Anne Shaw's invoices was the issue of how her fees were being paid for the bank litigation.
The former HOC board had filed a claim with Chubb Insurance to cover their legal costs in the bank litigation. When this happens, normally the attorney would submit their bills directly to the insurance company for payment. However, Anne Shaw has opted to do it a bit differently.
She has been submitting her bills directly to the association (Cedar Run HOC), collecting payment for those bills, and then leaving it up to the board to request reimbursement from Chubb. Why is this a concern? Because, as Anne Shaw admitted herself, legal bills submitted to Chubb are "strictly scrutinized", and Chubb will deny portions if they don't agree with them.
Why is this a big deal?
Because Shaw Legal Services is being paid UP-FRONT with Cedar Run homeowner funds before the bills are submitted to and "strictly scrutinized" by Chubb. If certain portions are denied, it makes no difference to Anne Shaw.......She's already been paid in full!! The Cedar Run homeowners are on the hook for any portion that Chubb denies....unless Anne Shaw credits this money back to the HOC. Has she ever done this?? Doubtful, but we will have to wait for the audit to find out.
******UPDATE******
We have learned that to date, NONE of Shaw Legal Services' bills have been submitted to Chubb. This is on a lawsuit that has been going on since December of 2012!! We don't know if any of it will be reimbursed. We will have to wait for the audit results to determine how much we have paid to Anne Shaw's firm for this litigation.
******UPDATE******
We have reason to believe that there may be a considerable amount that Chubb would deny. Much of Anne's efforts in the bank litigation have been outside the realm of defending the HOC board and much more in the realm of offensively attacking the banks and phase associations. Chubb will only cover legal costs that they believes are necessary to defend the board.
There may not be anything illegal about this billing practice. It is just irregular, unorthodox, unethical, and very unfair to the Cedar Run homeowners.
We'd love to hear from you!
(224) 544-9058
I understand that court is for the receiver to give the judge a update on the audit....it would be nice if we could find out why calls are not being returned and why the lack of maintenance to Cedar Run....
ReplyDeleteAgreed. It's doubtful that they will mention anything about calls not being returned, but there might be some info in the report about maintenance and possibly why they have held off on much of it. We expect to see something about the pool/lifeguard issues.
Deleteagain I will say it to every home owner from the sher/shaw take over is and was illegal sher is fully responsible to repay all the legal fee's from all the contracts he cancelled or didn't pay companies, then hires non- licensed or no insurance help this should not continue in civil court .this is criminal activity that all the evidence leads to the sher/shaw scandal ,fraud,corruption theft, dishonesty from shaw legal system we all had enough of this!!! again THIS NEEDS TO BE IN CRIMINAL COURT ,EVERY PENNY NEEDS TO BE RETURNED ,REVOKED LISENCES ,FINED,JAIL TIME THATS THE LAW ALLSO BE FORCED TO SELL UNIT OR UNITS THEY BOUGHT WITH ASSESMENT MONIES AND REMOVED FROM LIVING IN OUR COMPLEX WHATS GOOD FOR THE GOOSE IS GOOD FOR THE GANDER.
ReplyDeleteNo one sad to say has the money to pursue a lawsuit in criminal court against Sher/ Shaw....And if the New Master Board or any of The Phases were to....it would cause a extreme increase in assessments to cover the costs..I hear your frustration and wish more could be done also, but again the money it would cost is not feasible.
DeleteIf the audits are bad enough it could go to criminal court
DeleteAnything is possible. We don't know exactly what the audit will show, but we expect it to be a very long report with countless examples of things that were done inproperly and that put the association at great risk of liability and/or legal problems. Whether any of their findings will show evidence of criminal fraud is another story. If something does come up, it will certainly be reported to the appropriate authorities.
Deletethe pool is a joke ,when I was in the deep end coudnt see the ''life guard nor was he paying attention to view the whole pool ,'' he was busy looking at his cell phone he puts your pool pass on table not a list of those who didn't pay ,no rules posted no adult swim was called the water was very oily do to people not properly showering I give it an'' F '' FAIL I recommend&suggest for your health&safety go to the aqua center on Dundee rd ENJOY THE SUMMER GO HAWLKS !
ReplyDeleteNot much they can do about people not showering. That's more of a criticism of the people using the pool and not the staff. People using the pool need to be more considerate. This is a general problem in all the common areas of Cedar Run and not just the pool.
DeleteYou're the second person to comment about the guards not being able to see the entire pool, which is definitely a valid concern.....Hopefully you'll be the second person to call management and report it (hint, hint).
They have been called...they are aware of the pool situation... Also...bushes are being trimmed as I type this....street signs should be replaced with in the next few weeks..... Just need to be patient.... It is hard, I understand....
ReplyDeleteThanks for being a good neighbor and calling it in. Yes, we all wish they were done more promptly, but at least they are getting done.
DeleteDo remember how things like this were handled last summer.....
regarding the life guards NOT wanting to sign a contract at cedar run because SHER violated the previous life guards and causing a threat with the company now that the word is out NOT to work for cedar run should be liable for damaging our reputation as a great complex we are now with no company if we continue to allow this conduct cedar run will loose ! ''GO HAWKS ''
ReplyDeleteIt really is sad. If we weren't all living through it, it would all seem like a 'bad comedy', as one concerned owner recently wrote in.
DeleteThe good thing is that once we get through this summer and word gets out that there has been a changing of the guard (pun intended), vendors may be a little less apprehensive about doing business in Cedar Run.
Anything on what happened in court today?
ReplyDeleteStill waiting for confirmation on what happened in court. We do know did NOT happen......They did NOT give an estimate on the completion of the audit and election. Case is continued to July 13th.
DeleteThe receiver's third report was presented in court. We will post it as soon as it is available. Still need to confirm, but it does address some maintenance items and some facts about the pool.
It also allegedly elaborates more on the billing issues with Anne Shaw and Chubb Insurance (for the bank litigation). While it may seem confusing to many (and it is!), this is actually a very important issue.
Please stay tuned.
Little more information trickling in....
DeleteThe auditors are waiting on MB Financial to provide some specific documents from the 2015 Financial records. Once they have this, they will have everything needed to complete the audit. Still no time-frame announced, but it sounds like we're getting close.
The receiver's attorney, Mark Roth, will now work to negotiate a settlement in the bank lawsuit (replacing Anne Shaw). Anne Shaw has been instructed to submit her bills to Chubb Insurance and to cooperate with them.
Receiver's report to follow soon.
Why should Chubb pay Ann Shaw? She was on acting on the behalf of Cedar Run! She was for her sister and brother - in-law
ReplyDeleteThis is a difficult thing to fully explain. Perhaps a future blog post is needed on this topic alone.
DeleteRemember almost three years ago when the HOC board, under the leadership of Sher/Shaw, collected assessment moneys that should have gone to the phase associations. This (along with the ridiculous propaganda letters) caused the banks to sue the HOC. Guess who defended them? Of course, Anne Shaw!
The HOC took out a claim from its Directors & Officers (D & O) Liability insurance carrier (Chubb). From this point, all of Anne's legal bills should have gone to Chubb to cover the HOC's legal defense. Chubb would have reviewed her bills and rejected anything they felt was incorrect, unnecessary or unrelated to the DEFENSE of the HOC board.
Instead, Anne billed the HOC board (under control of Robert, Jack & Barbara) who PAID Anne's bills with homeowner funds, having NEVER submitting them to Chubb.
Fast Forward to today......the receiver must now submit Anne Shaw's bills to Chubb, in hopes of getting these homeowner funds REIMBURSED. If Chubb denies any or all of the claim, we will NEVER get this money back. So the issue is not about Chubb paying Anne; it's about Chubb paying the homeowners back for the money that we've already paid out to her.
If she would have done this the proper way, the HOC would not have paid ONE DIME of her fees for the bank lawsuit (which has carried on for nearly 3 years). Chubb would not have allowed any of her stall tactics, attacks on the other parties in the case, bogus deposition and discovery requests......etc etc etc. They would have forced her to settle the case quickly & inexpensively or risk being paid ZERO for not acting in the best interest of the HOC. They may have even forced her off the case and brought in another (more competent) attorney.
BUT, by having her fees paid by HOC funds, under the pretense that the HOC will eventually be reimbursed by Chubb, she took all the risk out if for herself and DUMPED IT ONTO THE CEDAR RUN HOMEOWNERS!!
To top it off, she withheld information about the case from Chubb (including a SETTLEMENT OFFER from the banks!!), which could lead to the entire claim being denied.
Any more news on what was said and presented in court Monday?
ReplyDeleteStill working on the next blog update. Thanks for your patience.
DeleteNothing super game-changing in court other than what was mentioned in a previous comment. We hope to get hold of a transcript with more details.
Stay tuned for the receiver's report. (or email if you'd like to see it before the blog is updated)
Do we have the receiver's report yet?
ReplyDeleteWe do. Copy & paste this into your browser:
Deletehttps://drive.google.com/file/d/0B3NPdPdJDlG7RDM3M0RkUTVlV00/view?usp=sharing
I was under the impression that homeowner condo fee
ReplyDeleteAccts would be accurate by the 7/1 billing. My bill is
Incorrect for the 2nd consecutive mo. now.
The 1st billing from HHSG was mailed out so late
That many homeowners had already mailed their
Pymt to Chgo. per Robert Shers instruction.
Apparently it was these pymts that went to Chgo
That we keep getting erroneously billed for.
What was the disposition of these pymts that they
Appear to have been lost? I would think that a good
Auditor would have located them by now. But then
Again as long as he is getting premium pay,
Whats the hurry ?
We were actually in the process of writing something to post on the blog for this very issue. The main thing to understand is that there is no need to panic. Nobody will be penalized for the incorrect balances shown on HHSG's statements. No payments have been lost.
DeleteAt the last court appearance, it was noted that the last of the 2015 records from MB Financial have been turned over to the auditor. Those should have all the payment records for anything that went to Chicago or Wheeling.
A second issue is that payments sent to the CA address sometimes take over week to be cashed and posted. When HHSG sends out the monthly statement, it may not yet include the most recent payment. No idea why it is taking that long, but it could explain why the statement shows an incorrect balance.
Nobody, including the judge and receiver had ever expected the audit to take this long. The intention was to have the audit and election completed in May.
But the records for the HOC accounts over the past 2 years have been kept by ameteurs with no training. Who was supervising them to ensure things were done properly? Another ameteur with no experience in accounting or managing the funds of a non-profit. That would be Robert Sher.
There was never a budget at the beginning of a fiscal year. There never was a system to ensure that all collected moneys were A) spent or B) saved for a future spending on a budgeted item. Those are the two main requirements in maintaining a non-profit status. They also did not keep any kind of consistent accounting method (the two main categories are accrual or cash basis accounting).
There are also countless red flags for fraud, which all must be fully investigated. Collecting and handling assessment payments at the clubhouse (often in cash) itself is a red flag for fraud.
So the bottom line is that the audit was/is the most difficult and cumbersome task of all, but it is necessary for Cedar Run to start anew. Nobody is happy about how long it has taken and the associated costs. Nobody is happy about the incorrect balance statements and most homeowners are getting them (including those of us that contribute to and administer this very blog).
We do believe the audit will be done sometime in July, and a fair number of these issues will be cleared up by then. Have your proof of payment available by then, just in case.
Yes...where are those payments? Why are homeowners needing to repay those payments? That all should of been turned over to The Receiver by now, you would think a good auditor would of found out where it all went by now. Sorry, but I have friends that are CPA'S and this audit is taking too long. If the auditors do not have the paperwork they need by now it should of been subpoena by the court
ReplyDeleteSee reply above. As of the last court date, the remaining 2015 MB Financial records had just been turned over.
DeleteNobody is being double charged or hit with late fees.
do we have any up date on court ?
ReplyDeleteYes. Stay tuned for a more thorough update.
DeleteMost notably, it was revealed by the receiver that Sher/Shaw's accountant (the one who did the tax returns for the HOC for 2 years) has refused to turn over documents. These are the only remaining documents needed to complete the audit.
The judge signed an order, requiring the accountant to turn over the documents in 14 days or appear in court for contempt.
Maybe this accountant is not a accountant. Any Certified Accountant would of turned them over by now.In the mean time, my feelings are that the Judge should shut them down if they are a Certified Firm.
ReplyDeleteThank you for bringing up the issue of credentials. After an extensive search, it appears that he is not a CPA (Certified Public Accountant).
DeleteHe does claim to have the following credentials:
EA (Enrolled Agent)
ATA (Accredited Tax Adviser)
ATP (Accredited Tax Preparer)
ABA (Accredited Business Accountant)
None of these could be verified, but he is shown as being a member of the Independent Accountants Association of Illinois (IAAI) with those credentials listed next to his name.
http://www.illinoisaccountants.com/users/MembersView.asp?member=30942
Anyhow......
The reasons he won't hand over the information are unknown. We don't know if he has been instructed by Sher/Shaw to withhold it, or if he has made this choice himself.
Incidentally, the accountant's business address is about one block away from one of Jack Shaw's businesses, Superior Eyecare. He probably has a long-standing relationship with Jack, and he'll do what he can to stall things if it helps Jack.
He has been served with the court order, requiring him to comply. If he doesn't, he must appear in court and face contempt.
the accountant is in civil court so contemt of court means having drinks with the judge this is nothing but a joke on the cedar run homeowners and with all the violations ,the judge still is costing us money$$$$$$$$ all the evidence this should of been a slam dunk and gone to criminal court for conviction on fraud ,again home owners now is the time to SELL remember get out while the cost is clear cause this isent getting any better any time soon
ReplyDeleteYou make a good point about civil contempt..... But this situation is a bit different.
DeleteIn the case of Robert Sher's letter, he was found in Civil Contempt. The Contempt was undone by the receiver's letter that counteracted Sher's letter. No other purpose punishment or penalty for his ACTIONS.
But in the case of the accountant, the threat of contempt is for his INACTION and failure to do something that the judge directly ordered him to do (which he is ABLE to do). If he fails to comply, the judge could issue an order that actually has some teeth......up to and including jailing him until he has complied.
When is the next court date? Or any updates?
ReplyDeleteNext court date is early August. Stay tuned for an update that includes the latest receiver's report.
DeleteI case you haven't read all the previous comments....Sher's accountant has not provided documents needed by the auditors. That is supposedly the last item needed to complete the audit.
TODAY IS FRIDAY THE END OF THE WORK WEEK SO MONDAY BEING JULY 27th that's the 2 weeks FOR CONTEMT OF COURT . all this is giving them more time to create a take over so far what evidence leads to jail time or re paying the money back to cedar run account ?they paid them selves not to mention the money they got that the masterboard paid, this receiver needs to communicate with us home owners as for that yoyo working beside him the word on the street is he is going to take this place over and screw us since he has all the info great job keeping those that were the problem in the club house office and master board nothing but a disaster HOME OWNER MOVE OUT WHILE YOU HAVE SOMETHING TO SELL HURRY TIME IS RUNNING OUT BEFORE THAT CRAZY MONSTER RETURNS !
ReplyDeleteYou are correct that 2 weeks has passed. We have no way of knowing if the accountant has complied yet. We will find out on August 6th which is the next court date.
DeleteIf he has complied fully, chances are the audit will be done before August 6th. If that is the case, then Judge Garcia may give the receiver a green light to call the election.
So before you tell all your neighbors that "the sky is falling" and that they need to sell now before a certain somebody re-attains power......do understand that we are very close to the end of this crisis.
If we all vote for the New Master Board, we should be able to avoid any take over. But, there still will be slot of work ahead of us and each of us needs to be involved, which sad to say will not happen, unless we educate our neighbors with the truth of all that has happened. So..to all that want change....Educate, get your neighbors involved! Run for the board...we need bilinguals
ReplyDeleteThanks for a great comment! You summed up exactly what we need to move forward in a positive direction. It all centers around have INFORMED owners.
DeleteLet's hope that the audit information will be disseminated in a way that will kickstart this effort.
whats going on with the judge ? we the home owners deserve an up date on what happen with the accountant ?also why is the door on the club house open its on second floor on the balcony ? I hope the air conditioning isent on or we are going to have a huge electric billl
ReplyDeleteThe Judge can't really do anything until the next hearing on 8/6.
DeleteAs for the accountant, we have learned that he has provided SOME documentation. We don't know if he provided what the auditors wanted. We are hoping to learn more about this before 8/6.
As for the door on the clubhouse, this should be reported to HHSG. You may even want to send them a picture. Is it open all the time? or just certain times during the day?