Big Trouble iN LITTLE HAITi

In regards to who is calling the shots in Little Haiti:

Herretes - And so what happens really honestly, is whatever Jim wants we need to do, because he is trying to organize us so we can go get the money and he's paying for the ride. Cause he says, I'm going to get the fucking money. I'll get the money, but I'll pay for the ride. But, so, so, all right. So, so even though um, he is not an owner of Mallory's companies and he's not right now an owner of the portfolio, he does have security on the portfolio. He has a say in everything, right. Um, you know, if Jim says we do not do this, we can't do it. And similarly, if he says, yeah, this is what we're going to do - this is the plan. And that's what we do. And, and from a certain point, you know, we're going to start transitioning our operation. Hopefully when we get a deal one, we'll start transitioning a lot of our operation over there. Because once it goes into that new company, that new company is starting from scratch with, uh, with an opportunity zone project that has to be audited. So it has to be audited every year. It's an expensive process, but it's also a very careful process. And in your experience, you know, that, you know, if, if Mallory's ever audited like that and we, you know, we DIE...like, so, so I mean, we’d get slaughtered. So, so this is not, this cannot be that type of operation.

In regards to how Kauderer, Leavitt do business and treated tenants:

Herretes - The way we've been doing with you and the way we, you know, the advice we've been giving or not giving or pushing or not pushing or whatever it is, you know, we've been doing with all of our tenants, and it doesn't work, right. It doesn't work. It just leads to animosity and it doesn't really have any results.

In regards to the investments made/credits earned by DLA:

Herretes - Midgard acknowledge all of that. So that's what we need to do is kind of account for, you know, what that investment has been and make the allowances and the leases and, and get you credited and get you up to date. And, and obviously set a plan going forward, some abatement going forward because of the emergency and to get you guys opening.

In regards to Kauderer taking SBA EIDL $150,000 through/from the business:

Herretes - So they went ahead and they use the operation. That’s a fact that was done, they use the operation and they got the PPP loan, which you used for rent and for other things, and it was used fine. And you don't have to repay. And you got an SBA loan, you know that is right now in their account, but they got that SBA loan. I mean, they don't need, they don't need your company to get that SBA loan they got that SBA loan. Thing is you know, what the fuck are you doing? Because if you, if I take away the opportunity, your opportunity to use your operations, to get a loan, to get your SBA right then, um, and I'm basically competing with my tenants.

In regards to Kauderer retaining possession of the SBA funds:

Herretes - I know why we are in the position that we are. I know that this is not your fault. I know. Okay. I'm looking at this and it is tangled right now. And I'm just being very clear with you on where you are, right. You signed a lease. 

Dale - Well, we'll hold on a second. I, and I appreciate your telling me where I'm at. I just want to really focus on where Mall's at in this situation. 

Herretes - But I need that, but I need you, I need you to understand about these loans so I can, so I'm trying to explain why, even though the SBA loan, even though the SBA loan doesn't have a requirement by law, that it must be used in Churchill's operation. It doesn't have that requirement whatever we want to say about it. It doesn't have that, but like the PPP does. SBA does not. But, But what did happen was like you mentioned, they did use accounts payable and financials and your income and your, and your payroll and your, and everything regarding the Churchills operation, they do that and they did use Mallory's personal guarantee. And they got a loan by doing that, you know, by doing that, they took your opportunity from doing exactly the same thing. 

Dale - I understand. 

Francisco - Because now you can't come in with District Live and do it appropriately. On your own  for your own as you should have done as, as, as they should have done when. They didn't do it that way. So what I'm saying is you know Mallory has a problem right now. He looked at it, I guess he looked at it, I guess when he did it and he thought, okay, I'm being cute and I'm taking the money here. And so FD's not controlling it, but he knows there’s it's an emergency so he doesn't want to get, you know get caught with his pants down.