In late 2012, Kim Peterson, a San Diego real estate developer and lawyer, got a call from a friend and colleague named Gina Champion-Cain. Peterson was in his 60s; in 1982 he left behind a high-profile criminal defense practice in Chicago to build shopping centers, pharmacies, and luxury homes. With his wife, Laurie, he lived in a stylish Mediterranean villa with views of the Pacific and traveled on his own plane. In business circles, Peterson was known for probity and sound judgment. Through mutual acquaintances, he’d met Champion-Cain, roughly 15 years his junior, around 2005. They became close, playing golf at the exclusive Rancho Santa Fe country club where they were members and dining together with their spouses. Now she had an investment opportunity to tell him about.
Champion-Cain owned a real estate company, American National Investments Inc., and had recently bought her first restaurant. She was learning about liquor license regulations. When a license is transferred from one owner to another, she told Peterson, California law requires that the buyer and seller apply for approval to the California Department of Alcoholic Beverage Control. Within 30 days of applying, the parties are obliged to open an escrow account, into which the buyer must deposit the purchase price of the license. California liquor licenses can be more than $100,000. Many buyers, Champion-Cain said, are caught off guard by quickly having to come up with so much cash. She told Peterson that she’d recently met with a liquor license attorney who wished that his clients could get financing to cover their deposits while they waited for approval.