ORIX Capital Markets, LLC recently settled its business defamation case against the owners of predatorix.com. As a result of this settlement, ORIX now owns the predatorix.com website, and Cyrus Rafizadeh has provided a statement and apology regarding his postings on the site. You can view Cyrus’s statement by clicking here.

The following summarizes the events that led to the settlement.

In 1999, Cyrus II Partnership (“Cyrus II”), an entity owned by Mondona Rafizadeh and controlled by Schumann Rafizadeh, borrowed $6.4 million, evidenced by a promissory note. This note was secured by a mortgage that encumbered the Arlington Apartments in Harvey, Louisiana.

On November 4, 1999, the Arlington note, mortgage, and related documents were assigned to the Merrill Lynch Mortgage Investors Inc. Commercial Mortgage Pass-through Certificates Series 1999-C1 trust (the “MLMI Trust”). ORIX at that time acted as both master and special servicer of the MLMI Trust.

Following numerous defaults by the borrower, ORIX, on behalf of the MLMI Trust, brought suit in Jefferson Parish, Louisiana, to foreclose upon the Arlington Apartments due to payment default, waste and fraud. The Louisiana court heard testimony and evidence over four days in July 2004.

In a December 23, 2004 opinion, the Louisiana Court awarded the MLMI Trust a $10.8 million judgment. You can view the Louisiana Judgment by clicking here.

After the Louisiana trial, and approximately twenty-two days before the Louisiana state court judgment, Schumann Rafizadeh created a company called Super Future Equities, Inc. (“SFE”), naming himself President and the sole member of its Board of Directors. Schumann Rafizadeh’s then minor child, Cyrus Rafizadeh, was SFE’s Secretary and Treasurer, and his two young nephews, Thomas Arjmandi and Keon Michael Arjmandi, were SFE’s President and Director, respectively.

On June 27, 2005, two days before the MLMI Trust was to hold a hearing related to its efforts to collect upon the Louisiana judgment, the judgment debtors filed bankruptcy petitions in the Southern District of Texas. ORIX’s efforts to collect upon the Louisiana fraud judgment continued in the bankruptcy court, including adversary proceedings brought by the bankruptcy trustee and ORIX against Schumann Rafizadeh, SFE and various related entities.

In February 2006, SFE filed suit against ORIX, ORIX USA and certain of ORIX’s employees in the Northern District of Texas, Dallas Division, alleging claims for breach of fiduciary duty, breach of contract, RICO violations, negligence and gross negligence. The Court dismissed SFE’s claims in full in an Order dated December 14, 2007.

On the same day that SFE sued ORIX, Cyrus Rafizadeh launched this website, www.predatorix.com.

On April 4, 2006, ORIX filed a counterclaim against Schumann Rafizadeh, Cyrus Rafizadeh, SFE, SFE’s president and Cyrus Rafizadeh’s cousin,Thomas Arjmandi, and Thomas Arjmandi’s brother,Michael Arjmandi, alleging that statements on predatorix.com constituted defamation, that the counter-defendants conspired to make the defamatory statements, and that those statements were harmful to ORIX’s business reputation.

Trial on ORIX’s defamation claims commenced on January 26, 2009, and the jury returned its verdict in favor or ORIX on February 6, 2009. You can view the jury’s verdict in its entirety by clicking here.

At the same time the jury was returning its verdict, ORIX reached its settlement with Schumann Rafizadeh, Cyrus Rafizadeh, SFE, Thomas Arjmandi and Michael Arjmandi.

We are pleased to have this matter behind us. We invite you to visit our website, www.orix.com to learn more about ORIX and its services, employees, and community partners.