PROVO A long list of businesses say they have been jilted by a well-known Utah County developer who already is the target of a $47 million fraud lawsuit by one of Utah's largest financial institutions.
Gary Brinton who is accused by Wells Fargo in a 4th District Court lawsuit of setting up and executing a complex straw-buyers scheme also is being sued by dozens of firms that claim he owes them hundreds of thousands of dollars.
- Cooper Tire & Rubber Co., which claims Brinton owes $326,997 for tires supplied to Randy's Discount Tire & Auto, a company controlled by Brinton.
- Burton Lumber says Brinton owes $82,416 for construction materials used at Brinton's Timpanogos Gateway condominiums in Payson.
- Geneva Rock claims $19,893 is due for service in the same project.
- Eclipse Stucco and Plastering says $20,466 is owed for work done in Brinton's Foxmoor Flats subdivision in Lehi.
- Park Concrete claims $34,944 is owed for work done in Foxmoor Flats, as well as the Hunters Valley subdivision in Springville.
- Plumbers Supply Co. claims $33,608 for service.
- SES Fabricators claims $46,152 in service to Brinton's properties in Orem.
- Granite Construction Inc. claims $31,741 for concrete products supplied for the Timpanogos Gateway condos as well as Vintage on the River in Provo.
A group of contractors have taken their debt collection crusade one step further: Six companies have filed a petition in federal bankruptcy court to force Brinton and his Northstar Cos. into "involuntary bankruptcy."
If the petition is granted, the contractors can sell Brinton's properties and assets and collect what money they can to pay their $245,000 claim.
Last week, Bank One joined the bankruptcy legal maneuvering, asserting that Brinton and his wife, Monica, are responsible for $1.8 million in default loans.
According to a motion filed in U.S. Bankruptcy Court in Salt Lake City, the six contracting companies say that Brinton tried to settle his debts with them by offering to pay a fraction of what was owed plus "passes" to Brinton's Trafalga Family Fun Center, Extreme Competition game complex or Seven Peaks water park in exchange for payment in full.
Such debts are small change compared to ones Brinton may face with Wells Fargo Bank. Wells Fargo claims Brinton used the good credit of 30 friends and family members to secure some $47 million to pay off his construction debts.
In exchange for using their credit, Brinton promised to pay them $30 a month for each loan he secured under their names. Brinton then agreed to make the monthly loan payments using rental income from condominium complexes he was building.
Brinton says in a U.S. District Court suit he filed against Wells Fargo Bank that three bank employees helped him secure the 499 loans averaging $110,000 each when the bank was known as First Security Bank. Wells Fargo bought First Security in October 2000. Brinton, an attorney and licensed real-estate broker, says in the suit that bank employees told him the scheme was legal.
Brinton's attorney, Charles Hanna, said his client hopes to use Trafalga and Seven Peaks water park as collateral to refinance the $47 million debt to Wells Fargo.
Brinton had been in negotiations with Wells Fargo about the loans but the bank severed all discussions with Brinton when a Deseret News story about the alleged fraud was published earlier this month.
"Wells Fargo has ended the negotiations with him," Hanna said. He maintains Brinton will pull through using Seven Peaks and Trafalga.
Several former employees of Brinton question that plan, saying Brinton's debts go very deep. Stephanie Petersen, who worked for Brinton as director of revenues for Seven Peaks and Trafalga before being laid off in October, said it was common knowledge among employees that Seven Peaks was in serious financial trouble even after ending one of its most profitable summers ever.
Petersen said the park turned $20,000 to $40,000 in profits each day. Despite the prosperity, Petersen said Brinton slowly began to take more and more money from Seven Peaks' coffers to help pay for debts related to construction projects.
"He would take large sums of money for no reason and not tell the manager," Petersen said in an interview with the Deseret News. "Which is fine, it's his company. He's allowed to do that. But it's just odd that he would take, like, $700,000 out one day, $300,000 another day and $100,000. Once we began to notice the money was disappearing, our manager was like, 'What's going on?' "
In July, Petersen said Brinton ordered that all payment of bills for Seven Peaks be pre-approved by Northstar officials. Soon, Seven Peaks managers began receiving calls daily from suppliers demanding payment.
"We started getting stacks and stacks of bills," she said.
For example, according to lawsuits filed against Seven Peaks Water Park, Meier's Catering claims it has not been paid for nearly $19,000 in food services.
Clear Channel Broadcasting also claims it is owed $59,823 for unpaid television ads that aired this year. Petersen said utilities were not being paid.
Another Seven Peaks employee, who feared he would be fired if his name was used, said the water and electricity was shut off at the water park last week.
Hanna confirmed that Seven Peaks and Trafalga are both in foreclosure and that Seven Peaks may be put up for auction in late December.
"Mr. Brinton has properties that have some substantial equities in them. He plans to sell those properties this week" and use the proceeds to save Seven Peaks before it is auctioned, Hanna said.Comment on this story
Brinton has refused to talk directly to the Deseret News about his financial woes. Hanna said although Brinton has a financial bailout plan that keeps changing, he could not disclose any specifics.
Petersen frets that if Brinton does not pull through, people who purchased season passes will not get their money back."It's not really Seven Peaks and Trafalga's fault. We had one of the best seasons ever. We made tons and tons of money," she said. "But where it went, nobody knows."