A major Utah investment fund has collapsed, leaving more than 268 creditors owed $168 million.Of that total, investors in the Waterford Loan Fund from Utah and 19 other states are owed $100 million, according to preliminary figures compiled by a contract manager for the company and attorneys. Assets were listed at $40 million.
Unsecured creditors, who met Wednesday to form a committee to represent their interests in U.S. Bankruptcy Court for Utah, had taken the unusual step of gaining control of the 8-year-old company and filing for protection March 20 in an effort to salvage what was left of it.
Until recently, former owner Travis Wright had been living on exclusive Walker Lane in Holladay in a home he bought in 2003 from former Utah Jazz player Jeff Hornacek, according to county property records. Wright, who has had no contact with personal attorneys or bankruptcy attorneys in recent weeks, turned the home over to the Waterford Loan Fund after the company was taken over.
The house is valued in court records at $5 million, but property records show Washington Mutual holds a $1.6 million mortgage against the property and that it is encumbered by numerous other trust deeds apparently given to company creditors.
A financial report filed this week in bankruptcy court lists the house and other personal property that Wright had given back. Among the items are artwork worth $12,500 and stuffed trophy animal mounts, including a wildebeest,gazelles, cape buffaloes, numerous antlers, ivory tusks and two bear skin rugs. Also listed are about 40 guns and numerous pieces of jewelry, as well as several vehicles and motorcycles, including a Mercedes SL55 valued at nearly $130,000.
Asked why Wright turned over personal property, attorney Blake Miller, who represents the company in court, "We asked for [all the assets] of the company."He and others said their review of company records was preliminary and they did not know if Wright had used investors' funds to buy those personal items.
Wright could not be reached for comment, and attorneys said they did not now where he was living.
Several investors contacted declined to comment on the matter. Court documents showed that when Wright operated the Waterford Loan Fund, he had promised to pay some investors up to 24 percent annual interest on their investments.Regulators say such an extremely high interest rate usually signals there is significant risk with an investment. Utah Division of Securities Director Keith Woodwell said the regulatory agency had received no inquiries about the company or Wright. The Securities and Exchange Commission office in Salt Lake City declined comment.
Dan Scarlet, who has taken over management of Waterford on behalf of the investors, said the company holds several properties that might increase in value if they can be developed.Earlier this year, Scarlet said investor Robert Irvine approached him about examining company books after Wright fell behind on obligations.
"It became fairly obvious the company was extremely distressed," Scarlet said.
That led to the investor group takeover and its effort to preserve assets so all investors, not just individuals, could try to get at least some of their money back.
The largest asset listed is an $18.9 million loan to the Lehi law firm Gregory, Barton & Swapp, which fell apart in 2005 after amassing millions of dollars in debts.
Source: http://www.sltrib.com/business