Some breaking ranks with Valley’s receiver
Several investors are trying to break a receivership’s control of collapsed Valley Investments in a growing dispute that now involves a public agency, the Mesa County Public Trustee’s Office.
Two new actions have been filed in Denver District Court in connection with Valley Investments, both by investors seeking to assert individual claims against the company.
Valley Investments’ receivership, the Grand Junction law firm of Rider & Quesenberry, is awaiting an answer to its request that the court give it more control of the assets of Valley Investments and of its owner, Philip Rand Lochmiller, and his family.
The receivership also hopes to gain the court’s approval to divide the assets of the company as equally as possible among more than 300 investors who plowed more than $30 million into the company.
That, according to the new filings, is the wrong way to proceed.
Seven investors, all represented by a Grand Junction law firm that advertised for plaintiffs seeking to obtain judgments against Valley Investments, filed papers opposing the receivership’s claims-administration plans.
Another investor, represented by Grand Junction attorney Joseph Coleman, has filed to intervene in the case, saying that an investor with a first trust deed should be allowed to foreclose on the property that was used to secure his investment.
The receivership will “oppose it strenuously,” Rider said of the efforts to override the plans for a distribution of assets among all the investors.
Both sides said the other was needlessly increasing the expense of the dealing with Valley Investments’ assets.
“That’s what’s galling about it,” Rider said.
“Their theory of fairness is going to give everybody less,” said Coleman, who represents the Eli and Dora Fresquez trust, which holds first deeds of trust on 14 properties in Mesa County through Valley Investments.
First trust deeds must have meaning for commerce to work, Coleman said.
“You have to have predictability” in financial arrangements, he said. “There are probably hundreds of cases where innocent people lost money, but people have to rely on a first lien being a first lien.”
Among the allegations are that Valley Investments represented several deeds to the same property as first trust deeds.
Mesa County Public Trustee Paul Brown declined the Fresquezes’ request to foreclose on their liens and he, too, is named as a defendant in the fast-growing case.
He was advised by an attorney to decline to foreclose because of the appointment of the receivership, Brown said.
“If you foreclose, you run the very real possibility of being held in contempt of court,” Brown said he was told. “What a mess.”
In a separate case, six plaintiffs are asking to intervene so they also can pursue claims independently of the receivership.
Gary L.. Mansfield, Phyllis Bowers, Frank A. Fritts, Deborah A. Arcieri, Gayleen Smyth and Elvert Oest, who looks to intervene on his own behalf and as a trustee of the Oest Living Trust, all claim in court papers the receivership is depriving them of their rights by requiring they surrender all other claims against Valley.
The attorney who filed that case, Douglas Briggs of Castor & Associates, did not respond Thursday to requests for comment.
Cliff Stricklin, the attorney for Valley Investments owner Lochmiller, has maintained Valley Investments failed as a result of the economic upheaval of the last year.