BEIJING BRUSSELS CENTURY CITY HONG KONG LONDON LOS ANGELES NEWPORT BEACH | Two Embarcadero Center, 28th Floor San Francisco, California 94111-3823 TELEPHONE (415) 984-8700 FACSIMILE (415) 984-8701 www.omm.com | NEW YORK SHANGHAI SILICON VALLEY SINGAPORE TOKYO WASHINGTON, D.C. |
May 13, 2010
VIA EDGAR AND FEDERAL EXPRESS
Ms. Kathryn McHale
Attorney Advisor
Division of Corporation Finance
United States Securities and Exchange Commission
100 F Street NE
Mail Stop 4561
Washington, D.C. 20549
Re: | IMH Financial Corporation IMH Secured Loan Fund, LLC Amendment No. 9 to Registration Statement on Form S-4 Filed May 10, 2010 File Nos. 333-164087 and 333-164087-01 |
Dear Ms. McHale:
On behalf of IMH Financial Corporation (“IMH”) and IMH Secured Loan Fund, LLC (the “Fund” and, together with IMH, the “Company”), this letter provides the Company’s responses to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) set forth in your letter dated May 12, 2010 (the “Comment Letter”), regarding the above-referenced Registration Statement on Form S-4 (the “S-4”). For the convenience of the Staff, each comment from the Comment Letter is restated in italics prior to the response to such comment.
Amendment No. 9 to Registration Statement on Form S-4
General
1. | Please tell us if you have paid for or authorized the preparation or distribution of any reports or recommendations, including any reports or recommendations by MICK & Associates, regarding the Conversion Transactions, otherwise than as described in the consent solicitation/prospectus. |
Response:
Investors Mortgage Holdings Inc. (the “Manager”) was contacted on an unsolicited basis by a representative of MICK & Associates, PC (“MICK & Associates”), a law firm that specializes in broker-dealer representation and real estate finance, in early February 2010, reportedly at the request of broker-dealers that MICK & Associates had formerly represented in connection with historical due diligence assessments of the Fund, in order to provide to its broker-dealer clients an updated due diligence review respecting the Fund and the Form S-4. As background, MICK & Associates has provided due diligence reports to its broker-dealer clients with respect to the Fund from time to time in the past. As the Manager believes is customary in the retail broker-dealer industry and as the Manager, on behalf of the Fund, has done from time to time in the past, the Manager, on behalf of the Fund, agreed to pay for reasonable expenses associated with the due diligence review by MICK & Associates, and the Manager, on behalf of the Fund, executed a payment arrangement with MICK & Associates pursuant to which the Manager agreed to pay for reasonable expenses. The payment arrangement is terminable if the fees are anticipated to exceed $20,000. A copy of the payment arrangement is attached hereto as Exhibit A.
The payment arrangement indicates that MICK & Associates solely represents its broker-dealer clients, a group comprised solely of firms to whom MICK & Associates has previously issued due diligence reports pertaining to the Fund, and who are currently parties to selling agreements with the Manager. The payment arrangement indicates that MICK & Associates will advise its broker-dealer clients as to the advisability of (a) their retail customers voting in favor of the proposed merger of the Fund into IMH Financial Corporation relative to other alternative courses of action, and (b) the transactions contemplated by the S-4. Neither the Manager nor the Fund has sought, and there is no agreement, arrangement or understanding pursuant to which the Manager or the Fund would utilize, employ, compensate or retain MICK & Associates to solicit votes from members of the Fund or for any other purpose. Except as set forth in the consent solicitation/prospectus, neither the Fund nor the Manager has otherwise paid for or authorized the preparation or distribution of any reports or recommendations regarding the Conversion Transactions.
The Manager does not know how many reports, letters or recommendations that MICK & Associates has prepared or the list of broker-dealers to which any such reports, letters of recommendations have been distributed, but (i) a representative of one broker-dealer forwarded to the Manager one MICK & Associates letter dated March 4, 2010 (attached hereto as Exhibit B), and (ii) a representative of MICK & Associates sent one letter dated March 24, 2010 (attached hereto as Exhibit C) directly to a representative of the Manager. Moreover, the Manager had no control over MICK & Associates’ activities whatsoever. Except for these two letters, the Manager is not aware of any other letters, reports or recommendations prepared by MICK & Associates for distribution to its broker-dealers. Representatives of the Manager have periodically responded to inquiries from MICK & Associates regarding the S-4, but at no time has the Manager or its representatives authorized the preparation or distribution of any reports, letters or recommendations, or distributed any report, letter or recommendation by MICK & Associates (or any other person), or been informed of the list of broker-dealers that have received any such report, letter or recommendation. The Manager does note that in reviewing the MICK & Associates letters in connection with the Staff’s comment that the MICK & Associates letters expressly indicate that the letters are intended for the internal diligence staff and compliance personnel of MICK & Associates broker-dealer clients only and state that such letters may not be distributed or otherwise shared with any broker-dealer representatives, clients or prospective clients.
Ms. Kathryn McHale, May 13, 2010 - Page 3
The Company supplementally informs the Staff that it does not believe that its arrangement to pay for the reasonable expense of a law firm (MICK & Associates) representing such law firm’s broker-dealer clients for the purpose of providing an updated due diligence review of the Fund to such broker-dealer clients (who are also pre-existing clients of Mick & Associates and pre-existing members of the Manager’s broker-dealer network) makes Mick & Associates a participant in a solicitation under Item 4 of Schedule 14A as incorporated by Item 18 of Form S-4. The Company also does not believe that the provision by MICK & Associates of an updated report which is intended for the internal diligence staff and compliance personnel of the broker-dealer client only and which by its terms may not be distributed or otherwise shared with any broker-dealer representatives, clients or prospective clients, constitutes a written solicitation by that firm (or by or on behalf of the Company). The Company also supplementally informs the Staff that it has not included the disclosure under Item 1015(b) of Regulation M-A as incorporated by Item 4 of Form S-4, because the unsolicited letters are not referred to in the S-4.
* * *
The Company has authorized us to advise the Staff that it hereby acknowledges that:
· | the Company is responsible for the adequacy and accuracy of the disclosure in the filing; |
· | the Staff comments or changes to disclosure in response to the Staff’s comments do not foreclose the Commission from taking any action with respect to the filing; and |
· | the Company may not assert the Staff’s comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
The Company appreciates the Staff’s comments and requests that the Staff contact the undersigned via telephone at (415) 984-8833, or via facsimile at (415) 984-8701, or via e-mail at phealy@omm.com with any questions or comments regarding this letter.
Thank you.
Ms. Kathryn McHale, May 13, 2010 - Page 4
Sincerely,
/s/ Peter T. Healy
Peter T. Healy
of O’MELVENY & MYERS LLP
cc: | Brittany Ebbertt Kevin Vaughn Justin Dobbie |
Exhibit A
Payment Arrangement
Exhibit B
Letter Dated March 4, 2010
Exhibit C
Letter Dated March 24, 2010