Urban Commons founder Taylor Woods, who is the subject of multiple fraud lawsuits over his financial transactions, swallowed tears on the witness stand as he explained that he was forced to sell his family home in Laguna Beach and now owed millions of dollars to old friends, investors, former employees and business partners.
âFor three decades I ran a successful business and never had any financial problems (before the pandemic),â said Woods. âI wouldn’t sleep at night feeling like there was someone I had a responsibility to without committing to take care of it. I hope to rebuild my good reputation and my good reputation as before.
Woods and his business partner Howard Wu both appeared in court on Friday after U.S. bankruptcy court judge Christopher Sontchi found them in contempt this week for violating a preliminary injunction to freeze their assets and showed how they had spent $ 2.4 million on Paycheck Protection Program (P3) loans. which aimed to help Queen Mary employees during the pandemic.
Sontchi in a dazzling decision called Woods and Wu ‘scammers’ for get a PPP loan in the name of their old company, Urban Commons Queensway, without consent, then run away with the proceeds.
In his previous ruling, the judge threatened to order detention for contempt of the couple, but on Friday he appeared to relax somewhat after the testimony and said he would consider what penalties to impose. He is expected to make a decision next week.
“We are not here to put people in jail because they cannot pay their bills, it is not a good use of the justice system,” he said.
Woods in court said he made a clerical error due to the confusion on two different payslips and didn’t realize he was asking for the loan money under the Urban Commons Queensway name.
âAs soon as we identified that it was a mistake, we wanted to make sure it was corrected,â he said.
Whether or not the move was a mistake, Nicholas Bassett, an attorney representing Urban Commons Queensway, said Woods and Wu have yet to reimburse the company.
âAs of July 2020, they are asking for the funds to be returned and not a penny has returned,â he said. “It is just words and no action, and none of it can be believed.”
Woods and Wu said about $ 1 million of the funds went to the City of Long Beach for rent and tax arrears, while the rest went to Urban Commons to reimburse the company for expenses. by Queen Mary.
The couple said they plan to use equity from the Wagner Hotel in New York City, which they partly own, to repay the loan money.
Wu said on Friday that his net worth was negative at $ 39 million.
âI had to borrow from family members to survive during this difficult time,â he said.
While Urban Commons attributed their problems to the pandemic, lawsuits and public records show their financial troubles had started at least one year before pandemic closures devastated the hospitality and tourism industries.
Urban Commons took over the lease of the Queen Mary in 2015 with a grand vision to develop the land surrounding the ship into an entertainment destination.
In 2016, the city issued $ 23 million in Tidelands bonds and funds to Urban Commons for urgent repairs to the ship, but the money was spent before most projects were completed and the auditor of the city, Laura Doud, in a report released on Monday, said she could not verify how the funds were spent.
Urban Commons declared bankruptcy in January and then relinquished its lease, returning control of the Queen Mary to the city of Long Beach.