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Full title: Objection (Limited) to Joint Motion for Conditional Approval of Disclosure Statement for Joint Ch. 11 Plan of Prof. Financial Investors, Inc. and its Affiliated Debtors Proposed by the Debtors and the Official Committee of Unsecured Creditors (RE: related document(s)513 Motion to Approve Document, Motion to Set Hearing, Motion Miscellaneous Relief). Filed by Creditor Pacific Western Bank (Hennesay, A.) (Entered: 04/14/2021)

Document posted on Apr 13, 2021 in the bankruptcy, 9 pages and 0 tables.

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tgriffin@hsmlaw.com, tmitchell@hsmlaw.com: yan A. Henderson on behalf of Creditor Jon Carroll: Ryan@weltyweaver.com obbin L. Itkin on behalf of Creditor Ad Hoc Committee: ritkin@sklarkirsh.com, cbullock@sklarkirsh.com an L. Kallick on behalf of Attorney Ivan L Kallick: ikallick@manatt.com o Keller on behalf of Creditor Scott Kerns: ivo@ssllawfirm.com n S. Landsberg on behalf of Creditor Ad Hoc Committee: ian@landsberg-law.com dam A. Lewis on behalf of Creditor JP Morgan Chase, N.A.: alewis@mofo.com, adam-lewis-3473@ecf.pacerpro.com ark A. Lightner on behalf of Creditor JP Morgan Chase, N.A.:mbl@kpclegal.com atricia H. Lyon on behalf of Creditor Carl F. Belline: phlyon@frenchandlyon.com, mwoodward@frenchandlyon.com hristopher M. McDermott on behalf of Creditor OneUnited Bank: ecfcanb@aldridgepite.com, CMM@ecf.inforuptcy.com ennis D. Miller on behalf of Creditor Heritage Bank of Commerce: dmiller@lubinolson.comtmouzes@boutininc.com, cdomingo@boutininc.com ron M. Oliner on behalf of Creditor Situs AMC: roliner@duanemorris.com, dmicros@duanemorris.com oshua K. Partington on behalf of Creditor Banner Bank:jpartington@swlaw.com, idelgado@swlaw.com ric S. Pezold on behalf of Creditor Banner Bank: epezold@swlaw.com, knestuk@swlaw.com ouglas B. Provencher on behalf of Interested Party Douglas B. Provencher: dbp@provlaw.com regory A. Rougeau on behalf of Creditor Steven Stenberg: ichael A. Sweet on behalf of Creditor Daniel Martin: msweet@foxrothschild.com, michael-sweet-337@ecf.pacerpro.com ohn A. Vos on behalf of Interested Party John Vos: InvalidEMailECFonly@gmail.com, PrivateECFNotice@gmail.com avid R. Zaro on behalf of Creditor HomeStreet Bank: dzaro@allenmatkins.com, mdiaz@allenmatkins.com Service information continued on attached pag

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Document Contents

1 A. KENNETH HENNESAY, JR. (BAR NO. 187531) ALLEN MATKINS LECK GAMBLE 2 MALLORY & NATSIS LLP 1900 Main Street, Fifth Floor 3 Irvine, California 92614-7321 Phone: (949) 553-1313 4 Fax: (949) 553-8354 E-Mail: khennesay@allenmatkins.com 5 Attorneys for Creditor 6 PACIFIC WESTERN BANK 7 8 UNITED STATES BANKRUPTCY COURT 9 NORTHERN DISTRICT OF CALIFORNIA - SAN FRANCISCO 10 In re Case No. 20-30604 11 PROFESSIONAL FINANCIAL Chapter 11 INVESTORS, INC., et al., 12 PACIFIC WESTERN BANK'S LIMITED Debtor. OBJECTION TO JOINT MOTION FOR 13 CONDITIONAL APPROVAL OF DISCLOSURE STATEMENT FOR JOINT 14 CHAPTER 11 PLAN OF PROFESSIONAL FINANCIAL INVESTORS, INC. AND ITS 15 AFFILIATED DEBTORS PROPOSED BY THE DEBTORS AND THE OFFICIAL 16 COMMITTEE OF UNSECURED CREDITORS. 17 Date: April 15, 2021 18 Time: 11:00 a.m. Ctrm: Telephonic/Video Appearance 19 20 21 22 23 24 25 26 27 28

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1 Secured creditor Pacific Western Bank, a California state-chartered bank ("Pacific 2 Western") hereby objects to Court approval of the Disclosure Statement for the Amended Joint 3 Chapter 11 Plan of Professional Financial Investors, Inc. and its Affiliated Debtors Proposed by 4 the Debtors and Official Committee of Unsecured Creditors and Supported by the Ad Hoc LLC 5 Members Committee and the Ad Hoc DOT Noteholders Committee (Dkt. 556, the "Disclosure 6 Statement"). Pacific Western's objections are limited to the Disclosure Statement's lack of 7 adequate information with respect to (i) claims reserved against Pacific Western (along with all of8 the other financial institutions that have serviced accounts of or made loans to any of the Debtors)9 which is particularly important given the waiver of certain rights of the institutional lenders in the10 treatment of Class 1 Non-Investor First-Priority Lender Claims under the Plan; and (ii) the effect 11 of the TIC Investor Treatment Election on any Class 1 Non-Investor First-Priority Lender Claims 12 where the relevant borrowers include Holders of TIC Claims along with one of the Debtors. 13 Debtors' counsel has been in active communication with the counsel for the institutional 14 lenders, including Pacific Western. This open communication has resulted in the consensually 15 resolution of a number of issues raised with respect to the Disclosure Statement and Plan (and 16 Pacific Western expects that communication and cooperation to continue). Nevertheless, the 17 issues raised in this limited objection remain unresolved, at present. Accordingly, Pacific Wester18 seeks clarification of the Plan and the Disclosure Statement so that Holders of Class 1 claims may19 understand their treatment under the Plan, make an informed decision on how to vote on the Plan,20 and make any necessary objections to confirmation of the Plan. 21 // 22 // 23 // 24 // 25 // 26 27 28

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1 PACIFIC WESTERN'S CLAIMS 2 Pacific Western is lender to eight of the Debtors and, according to the Plan's terminology, 3 Non-Investor First Priority Lender with respect to the following Debtors and real property 4 collateral:1 5 Balance as of Debtor Property Address 7/26/20 6 Professional Investors 48, LLC (et al) 1441 Casa Buena Dr., Corte $12,300,000.00 7 Madera 8 Professional Investors 44, LLC 100 Sycamore Avenue, San $4,200,000.00 Anselmo 9 Professional Investors Security Fund 1825 Lincoln Avenue, San Rafael $13,205,000.00 10 XIII, LP 11 Professional Investors Security Fund 1000 Ignacio Blvd, Novato $12,000,000.00 XIV, LP 12 Professional Investors, Inc. 885 Broadway, Sonoma $3,055,550.00 13 Professional Investors Security Fund I, 475 Ignacio Hills Blvd., Novato $4,175,000.00 14 LP 15 Professional Investors 21, LLC 401 Ignacio, Novato AND $5,923,652.47 521 Alameda del Prado, Novato 16 Professional Investors 20, LLC 511 & 531 Alameda del Prado, $3,991,631.06 17 Novato 18 Total $58,850,833.53 19 20 Each of the above-referenced loans would give rise to a Class 1 Non-Investor First Priorit21 Claim under the Plan. 22 TREATMENT OF CLASS 1 NON-INVESTOR FIRST PRIORITY CLAIM 23 The baseline treatment for Class 1 is that "the legal, equitable, contractual, Lien and 24 priority rights of the Holders of Class 1 Claims are unaltered by the Plan." Plan, Section 2.2.1. 25 Section 2.2.3 of the Plan, however, provides for an irrevocable waiver by Holders of Class 1 26 Claims of any and all "non-monetary" defaults and breaches of contract that may have occurred o27 28 1 Loan balances are listed as of July 26, 2020, the petition date for Professional Financial

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1 arose prior to the Effective Date, whether discovered or undiscovered, including those arising 2 from the Debtors’ granting of junior liens without lender consent (i.e., to DOT Investors) 3 (Section 2.2.3(a)(iii); arising from any misrepresentations or omissions made by any Debtor or 4 representative of any Debtor ((Section 2.2.3(a)(iv); related to the Debtors' participation in the 5 Ponzi scheme (Section 2.2.3(a)(v); related to a Debtor's misuse or diversion of funds 6 (Section 2.2.3(a)(vi); related to any default or breach by Lewis Wallach or any Debtor or any othe7 Person under any guaranty, including a breach of a representation or warranty. 8 Section 2.2.3(c) now clarifies that such waivers will not affect any defense that the Holder9 of a Class 1 Claim may have to any claims asserted against such Holder. The Plan is silent, 10 however, on the effect (if any) that these waivers may have on the indemnity rights of Holders of 11 Class 1 Claims in the event that claims are asserted against them based on circumstances that may12 be the subject of the foregoing waivers. 13 THE TIC INVESTOR TREATMENT ELECTION 14 Two of Pacific Western's loans affected by these chapter 11 cases involve non-debtor 15 tenant in common borrowers – the loans to Professional Investors 44, LLC and Professional 16 Investors 48, LLC. Section 2.7(b) of the Plan provides that the Holder of a TIC Claim may make 17 an election to transfer its TIC Interest to the Debtors or PFI Trust, as applicable, in exchange for 18 alternative treatment as an Investor under the Plan. 19 LIMITED OBJECTION TO DISCLOSURE STATEMENT 20 Pursuant to section 1125 of the Bankruptcy Code, the proponent of a proposed chapter 11 21 plan must provide holders of impaired claims and interests entitled to vote on the plan with 22 "adequate information" regarding that plan. Section 1125(a) of the Bankruptcy Code states, in 23 relevant part, that "adequate information" means: 24 [I]nformation of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the 25 debtor and the condition of the debtor's books and records, including a discussion of the potential material Federal tax 26 consequences of the plan to the debtor, any successor to the 27 debtor, and a hypothetical investor typical of the holders of claims or interests in the case, that would enable such a 28

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1 hypothetical investor of the relevant class to make an informed judgment about the plan . . . . 2 3 11 U.S.C. § 1125(a)(1). 4 Thus, a disclosure statement must, as a whole, provide information that is reasonably 5 calculated to permit an informed judgment by creditors and interest holders, if applicable, to vote 6 on a plan. See In re California Fidelity, Inc., 198 B.R. 567, 571 (B.A.P. 9th Cir. 1996) ("The 7 purpose of a disclosure statement is to give all creditors a source of information which allows 8 them to make an informed choice regarding the approval or rejection of a plan") (citing Century 9 Glove, Inc. v. First American Bank of N. Y., 860 F.2d 94, 100 (3d Cir. 1988) ("the general 10 purpose of the disclosure statement is to provide 'adequate information' to enable . . . creditors an11 interest holders to make an informed judgment about the proposed plan and determine whether to 12 vote in favor of or against that plan"). Adequate information necessarily includes identification o13 a debtor's prospective claims or counterclaims against secured creditors asked to vote on a plan. 14 In re Kelley, 199 B.R. 698, 703 (9th Cir. BAP 1996). 15 The Disclosure Statement does not contain adequate information for two reasons. First, it 16 neglects to adequately identify the claims that the Debtors purport to reserve against Pacific 17 Western and the other financial institutions which are listed as "Potential Targets" in Exhibit D to 18 the Disclosure Statement. Identification of potential targets is not the same as identifying potenti19 claims. A vague reference to claims against creditors is insufficient. Kelley, 199 B.R. at 704 20 (holding that reservation of possible claims against a particular secured creditor, without mention 21 of the grounds for such claims, was inadequate). 22 Second, although the Plan provides for transfers of TIC Interests to the Debtors or the PFI 23 Trust under the TIC Investor Treatment Election, nothing in the Plan addresses the status of these 24 TIC Interest holders as co-borrowers under secured loans. Simply transferring the TIC Interest is 25 not a full resolution of the TIC Holder's position. Section 2.7 of the Plan provides for the transfer26 of the TIC Interests must be done "in a manner satisfactory to the Debtors or PFI Trustee, as 27 applicable." Pacific Western suggests that the manner of transfer should also involve the 28 commercially reasonable approval of any applicable secured lender for which such TIC Interest

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1 Holder is a borrower. 2 CONCLUSION 3 Pacific Western respectfully requests that the Court, as a condition of approval of 4 the Disclosure Statement, require the Debtors to state with clarity the purported claims tha5 the Debtors' intend to reserve against Pacific Western (and the other financial institutions)6 Pacific Western does not believe that the Debtors actually have any such claims against it,7 but adequate disclosure of any reserved claims would allow Pacific Western to knowingly8 consider the waivers of its rights that the Plan would impose under Section 2.2.3 and mak9 a fully informed decision about the same. The Court should also require the Debtors to 10 clarify the effect of the exercise of a TIC Investor Treatment Election by the Holder of a 11 TIC Interest who is a co-borrower of one of the Debtors. 12 13 Dated: April 14, 2021 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 14 A. KENNETH HENNESAY, JR. 15 By: /s/ A. Kenneth Hennesay, Jr. 16 A. KENNETH HENNESAY, JR. Attorneys for Creditor 17 Pacific Western Bank 18 19 20 21 22 23 24 25 26 27 28

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PROOF OF SERVICE OF DOCUMENT am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 900 Main Street, Fifth Floor, Irvine, CA 92614-7321 true and correct copy of the foregoing document entitled (specify): PACIFIC WESTER BANK'S LIMITED OBJECTION O JOINT MOTION FOR CONDITIONAL APPROVAL OF DISCLOSURE STATEMENT FOR JOINT CHAPTER 11 PLAF PROFESSIONAL FINANCIAL INVESTORS, INC. AND ITS AFFILIATED DEBTORS PROPOSED BY THE DEBTORND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS ill be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in e manner stated below: . TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General rders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On (date)pril 14, 2021 , I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined the following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated elow: ared A. Day on behalf of U.S. Trustee Office of the U.S. Trustee / SF: jared.a.day@usdoj.gov, ankey.to@usdoj.gov erri H. Didion on behalf of U.S. Trustee Office of the U.S. Trustee / SF: terri.didion@usdoj.gov, patti.vargas@usdoj.gov ffice of the U.S. Trustee / SF: USTPRegion17.SF.ECF@usdoj.gov ameron Gulden on behalf of U.S. Trustee Office of the U.S. Trustee / SF: cameron.m.gulden@usdoj.gov eannie Kim on behalf of Professional Financial Investors, Inc.: jekim@sheppardmullin.com, gatmen@sheppardmullin.com atthew Ryan Klinger on behalf of Professional Financial Investors, Inc.: mklinger@sheppardmullin.com, Gatmen@sheppardmullin.com ri Katz on behalf of Professional Financial Investors, Inc.: okatz@sheppardmullin.com, LSegura@sheppardmullin.com ichard A. Lapping on behalf of Professional Financial Investors, Inc.:rich@trodellalapping.com . Barrett Marum on behalf of Professional Financial Investors, Inc.: bmarum@sheppardmullin.com, garcia@sheppardmullin.com ohn D. Fiero on behalf of Creditor Committee Official Committee of Unsecured Creditors: jfiero@pszjlaw.com, carpio@pszjlaw.com ebra I. Grassgreen on behalf of Creditor Petitioning Creditors Jacques Achsen, Samuel Goldberger, Elizabeth A. oldblatt, Arthur Indenbaum, Andrew Roy Michaels, Mary Michaels, and Joel Rubenzah: dgrassgreen@pszjlaw.com, phan@pszjlaw.com avid W. Baddley on behalf of Creditor U.S. Securities and Exchange Commission: baddleyd@sec.gov arya Sara Druch on behalf of Creditor John A. Mangini & Co. LLP Profit Sharing Plan: ecf@daryalaw.com ecily Ann Dumas on behalf of Creditor Ad Hoc Committee of Deed of Trust Holders: cdumas@bakerlaw.com, hammonturano@bakerlaw.com ark A. Gorton on behalf of Creditor Tri Counties Bank: mgorton@boutininc.com, cdomingo@boutinjones.com This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

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itchell B. Greenberg on behalf of Creditor Poppy Bank, fka First Community Bank: mgreenberg@abbeylaw.com, meroney@abbeylaw.com homas P. Griffin, Jr. on behalf of Creditor Five Star Bank: tgriffin@hsmlaw.com, tmitchell@hsmlaw.com: yan A. Henderson on behalf of Creditor Jon Carroll: Ryan@weltyweaver.com obbin L. Itkin on behalf of Creditor Ad Hoc Committee: ritkin@sklarkirsh.com, cbullock@sklarkirsh.com an L. Kallick on behalf of Attorney Ivan L Kallick: ikallick@manatt.com o Keller on behalf of Creditor Scott Kerns: ivo@ssllawfirm.com n S. Landsberg on behalf of Creditor Ad Hoc Committee: ian@landsberg-law.com dam A. Lewis on behalf of Creditor JP Morgan Chase, N.A.: alewis@mofo.com, adam-lewis-3473@ecf.pacerpro.com ark A. Lightner on behalf of Creditor JP Morgan Chase, N.A.: MLightner@mofo.com itchell B Ludwig on behalf of Creditor Pacific Premier Bank: mbl@kpclegal.com atricia H. Lyon on behalf of Creditor Carl F. Belline: phlyon@frenchandlyon.com, mwoodward@frenchandlyon.com hristopher M. McDermott on behalf of Creditor OneUnited Bank: ecfcanb@aldridgepite.com, CMM@ecf.inforuptcy.com ennis D. Miller on behalf of Creditor Heritage Bank of Commerce: dmiller@lubinolson.com evin Harvey Morse on behalf of Creditor Maria Aida Galen: kmorse@clarkhill.com homas G. Mouzes on behalf of Creditor Tri Counties Bank: tmouzes@boutininc.com, cdomingo@boutininc.com ron M. Oliner on behalf of Creditor Situs AMC: roliner@duanemorris.com, dmicros@duanemorris.com oshua K. Partington on behalf of Creditor Banner Bank: jpartington@swlaw.com, idelgado@swlaw.com ric S. Pezold on behalf of Creditor Banner Bank: epezold@swlaw.com, knestuk@swlaw.com ouglas B. Provencher on behalf of Interested Party Douglas B. Provencher: dbp@provlaw.com regory A. Rougeau on behalf of Creditor Steven Stenberg: grougeau@brlawsf.com pencer P. Scheer on behalf of Creditor SEAMUS EGAN, his successors and/or assignees scheer@scheerlawgroup.com ichael A. Sweet on behalf of Creditor Daniel Martin: msweet@foxrothschild.com, michael-sweet-337@ecf.pacerpro.com ohn A. Vos on behalf of Interested Party John Vos: InvalidEMailECFonly@gmail.com, PrivateECFNotice@gmail.com avid R. Zaro on behalf of Creditor HomeStreet Bank: dzaro@allenmatkins.com, mdiaz@allenmatkins.com Service information continued on attached pag This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

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. SERVED BY UNITED STATES MAIL: n (date) April 14, 2020 , I served the following persons and/or entities at the last known addresses in this bankruptcase or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, rst class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the dge will be completed no later than 24 hours after the document is filed. rofessional Financial Investors, Inc. 50 Ignacio Blvd., Ste. 300 ovato CA 94949 ounsel for Debtors: ri Katz, Esq. eannie Kim, Esq. atthew Ryan Klinger, Esq. heppard Mullin Richter & Hampton Embarcadero Center, 17th Floor an Francisco, CA 94111 . Barrett Marum heppard Mullin Richter & Hampton 01 West Broadway, 19th Floor an Diego, CA 92101 ichard A. Lapping rodella & Lapping LLP 40 Pacific Avenue an Francisco, CA 94133 Service information continued on attached pag . SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state methodr each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) , I servede following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing tuch service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration at personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is led. udge Blumenstiel Chambers Courtesy Copies Procedure: Judge Blumenstiel does not want copies of any filings. Service information continued on attached pag declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. pril 14, 2021 Naomi Campos /s/ Naomi Campos Date Printed Name Signature This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

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