CFO: Valley owners eschewed advice
The chief financial officer for Valley Investments suggested several approaches to save the company but was frustrated by the owner’s lack of interest, he testified Friday.
Richard Langley suggested several scenarios, including getting into the business of providing housing for energy industry workers and reducing interest payments to investors.
Valley owner Philip Rand Lochmiller and his son, also Philip Rand Lochmiller, “didn’t appear to take it too seriously,” Langley testified about his conversations with them.
He said he drew up a brochure for presentation to energy companies, offering to help them meet low-income housing needs.
“Mr. Lochmiller did not pursue the leads” needed to get that arm of the business going, he said.
Langley, who was recruited from California to help the business grow from a company with sales of $20 million to one with $60 million, left Valley Investments after four months, soon after he discovered it had
$22 million in net accrued operating losses.
Those losses would be in addition to the $30 million in investments believed lost in what the Valley Investments receiver, Kirk Rider, said appeared to “have been operated as a Ponzi scheme.”
Langley took copies of records to the FBI in January. State and federal investigators closed the business in May.
Lochmiller and members of his family are trying in Denver District Court to fend off an effort by the receiver to take control of assets that are owned by Lochmiller family members personally, but are alleged to have been bought with company funds.
In one case, Rebekah Lochmiller, wife of Philip Lochmiller Jr., read from financial reports showing that mortgage payments to a house on Shelley Drive, owned by her husband, had been paid by Valley Investments.
No report of those payments was made to the Internal Revenue Service as income, and there was no adjustment to reflect tax advantages to the company for paying the mortgage, Rebekah Lochmiller said.
The younger Lochmillers moved to Kansas as a result of her getting a job there. They are asking the court to lift the restriction that prevents them from selling their Grand Junction house.
Testimony in the case is scheduled to continue Friday.