Three Sonoma sites were included in the first round of bankruptcy sales. Eventually, more than 200 properties owned by Ken Mattson and Tim LeFever might be unloaded.
The first six LeFever Mattson properties have been sold out of bankruptcy, including three in Sonoma. They represent the leading edge of a wave that could eventually include dozens of holdings across California — perhaps half of them in Sonoma Valley, where now-indicted investment adviser Ken Mattson concentrated his acquisitions in recent years.
The sales begin the unraveling of a portfolio once valued at roughly $400 million, and a potential reset of the real estate landscape in Sonoma, where Mattson, his former partner Tim LeFever and the many business entities they established snapped up at least 120 properties between 2015 and 2023.
Mattson and LeFever have lost control of those companies, which are now under federal bankruptcy oversight. Mattson was indicted by a federal grand jury in May on nine counts of wire fraud, money laundering and obstruction of justice. He is free on $4 million bail.
The property shedding began in late June, when Kenneth and Jolinda Gladstein purchased a 2,100-square-foot home on Cordilleras Drive for $1.8 million, and Mario Kovatchev bought a slightly larger house on Third Street West for $1.3 million.
Both were sold by Black Walnut LP, a subsidiary of LeFever Mattson Inc.
Four additional properties have sold since then, with more expected in the coming weeks.
The unsecured creditors committee in the LeFever Mattson bankruptcy — made up of investors who say they were bilked by Mattson, or the relatives of those affected — has hosted five virtual town halls to update investors. At the most recent town hall, on July 16, an attorney for the group presented a slide outlining the real estate liquidation process.
According to Debra Grassgreen of the San Francisco-based firm Pachulski Stang Ziehl & Jones, the LeFever Mattson portfolio included 175 properties when the company entered bankruptcy. More than 65 were in Sonoma.
The creditors committee hired FTI Consulting, which describes itself as a “firm for organizations facing crisis and transformation,” to assess the portfolio and identify properties to sell. FTI then brought on several real estate brokers to list and market the holdings.
As of July 16, according to Grassgreen:
- 2 sales had closed
- 70 properties had signed purchase and sale agreements
- 13 had recommended offers
- 5 had open calls for offers
- 26 had been approved for sale and were being actively marketed
- 14 had been approved but were drawing limited market interest
- 27 were approved but not yet marketed
- 18 were on hold
Since that update, four more properties are believed to have closed: a group of courtyard apartments on Studley Street in Sonoma (sold by Sienna Pointe LLC to the Grasso Herrick Family Trust for $1.5 million), and one property each in Vacaville, Citrus Heights and Sacramento.
Three additional Sonoma-area parcels have had notices of sale filed in the LeFever Mattson bankruptcy case — a three-bedroom house on Third Street East; a three-unit property on Manzanita Road in the Boyes Hot Springs neighborhood; and a three-bedroom home on Larkin Drive.
Those sales had not officially closed as of Wednesday. It took roughly a month for the Cordilleras Drive and Third Street West properties to close after their notices of sale were filed in court.
All of these deals pertain to LeFever Mattson portfolio. They don’t include properties held by KS Mattson Partners, the company Ken Mattson operated with his wife, Stacy.
When The Press Democrat profiled Mattson and LeFever in March 2023, KS Mattson had purchased at least 88 parcels in and around Sonoma. The Mattsons’ company sold many of those sites to various LeFever Mattson entities over time — some of which now factor into the government’s fraud allegations — and offloaded another dozen properties to tech financier Chris Fanini in spring 2024.
KS Mattson Partners is believed to own around 20 Sonoma properties today. Those, too, could eventually hit the market.
Mattson’s former company is now under the control of a U.S. court trustee, following a monthslong legal fight in which LeFever Mattson’s bankruptcy attorneys attempted to force Mattson and KS Mattson Partners into involuntary bankruptcy. Mattson relented on behalf of his company in June, and on behalf of himself in July. It’s too early in those cases to know whether assets such as real estate will be liquidated.
After breaking down the real estate sales in the July 16 town hall, Grassgreen and Kevin Katari, chair of the LeFever Mattson creditors committee, updated investors on other aspects of the case.
Pachulski Stang is working on a claims settlement and term sheet for all parties.
“Our goal is to get the most money in hands of investors, as quickly as we can,” Grassgreen said. “I promise you litigation will be expensive and slow. That’s why the term sheet talks about one big settlement.”
