Debts hamper son of Molasky

Steven Molasky, the son of prominent real estate developer Irwin Molasky, has filed for Chapter 11 bankruptcy, reporting debts totaling between $50 million and $100 million.

Under Chapter 11, a debtor is given time to reorganize his debts while continuing operations.

The filing lists Molasky's 20 largest unsecured creditors. Kenneth Wynn, brother of Wynn Resorts Ltd. CEO Steve Wynn, is one. Others include Bank of Nevada, Irwin Union Bank, Sun West Bank, his father and several entities associated with OneCap Mortgage.

Molasky owes OneCap affiliates $16.9 million in four unsecured loans, according to the bankruptcy petition.

Molasky checked a box showing he owes between 200 and 999 creditors. His assets total between $50 million and $100 million, according to bankruptcy papers.

The exact amounts of Molasky's assets and liabilities weren't disclosed in the initial bankruptcy filing.

Molasky, who has offices at One Hughes Center Drive, Suite 1404, and his attorney didn't return calls for comment Wednesday.

Molasky's bankruptcy petition, which was filed Saturday, adds a new twist to efforts to recover money for people who invested with troubled hard money lender OneCap Mortgage.

Steven Molasky, a former owner of OneCap, borrowed from OneCap.

Like other hard money lenders, OneCap solicited investor money and used the proceeds to make development loans that were secured by real estate. It has about $400 million in loans funded by 2,000 investors.

The continued operation of the company became an issue in October when two state agencies ordered OneCap to stop violating state financial laws.

The Nevada Financial Institutions Division and Nevada Mortgage Lending Division in October filed cease-and-desist orders against OneCap for alleged violations of state law in originating loans.

Mortgage Commissioner Joseph Waltuch fined OneCap $250,000 and could revoke or suspend the hard money lender's license for making loans backed by real estate.

The financial division in April agreed to accept a $180,000 fine from OneCap to settle allegations that OneCap made loans unsecured by real estate without a license. OneCap is paying the fine in monthly installments and is current with those payments, according to the financial division.

OneCap attorney Harold Gewerter said bankruptcy filings "have a way of settling things down, and we expect things will turn out (well) in the end."

Gewerter said he didn't know how much Molasky owes OneCap investors for outstanding loans or the number of outstanding loans in which Molasky is the borrower or guarantor of the loan.

Molasky owned the Bullhead Entities, which obtained one of the biggest loans from OneCap. OneCap made a $19.4 million loan to the Bullhead Entities in 2005, based on a reported property value of $44.7 million.

The loan was backed by 1,117 acres of land near Bullhead City, Ariz., according to a lawsuit filed by Albright, Stoddard, Warnick & Albright on Friday. OneCap and Molasky were among the defendants.

The lawsuit contends that OneCap released the Bullhead collateral without compensating investors in the loan.

Then, Bullhead 640, another Molasky entity, took title to the collateral and obtained a loan from OneCap with one of three parcels that secured the original loan, according to the lawsuit.

In addition, Molasky guaranteed one of the unsecured loans that OneCap made without a license, according to a complaint filed by the state financial division. The $5.5 million loan was made to Chateau Properties, which had Molasky as its secretary and treasurer.

Molasky himself encountered regulatory problems in December when the Nevada State Contractors Board took Molasky's general building license for his company, Pacific Contractors.

Molasky owed $1.2 million to contractors, according to complaints filed with the board.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.