PROVO — After recently settling his debts with two major lending institutions, it appears Utah County developer Gary Brinton is making some progress against a mountain of debt.
Attorneys for America First Credit Union and Far West Bank announced last week that Brinton had settled millions of dollars in default loans with them.
America First Credit Union has settled two loans it gave Brinton in 1999, totaling more than $2 million. Credit union attorney Timothy Blackburn said the credit union was forced to place one of Brinton's developments, Temple View Terrace, in foreclosure after Brinton stopped making payments to them.
Brinton has also settled more than $2.9 million in default loans with Far West Bank. "Far West has resolved all its issues with Mr. Brinton," said Far West Bank attorney Mark Robinson.
Brinton has also paid off a $300,000 lien on one of his properties, according to his attorney, Charles Hanna.
"He's been making substantial headway with his debts," said Hanna, who said Brinton recently received permission from U.S. Bankruptcy Judge Glen Clark to sell $1.9 million worth of property to help pay off his debts with Wells Fargo Bank.
But with tens of millions in default loan claims and a long list of creditors trying to force Brinton into bankruptcy, not even the federal bankruptcy judge knows how Brinton is going to dig himself out. Brinton faces the daunting task of resolving a $47 million claim by Wells Fargo Bank plus millions more by Bank One and Key Bank.
With two voluntary bankruptcy petitions on the Seven Peaks Water Park and numerous real estate developments, Brinton also faces involuntary bankruptcy action filed by several companies that have not been paid for services, as well as Wells Fargo, Key Bank and Bank One. The actions have set the stage in bankruptcy court for a frantic race for Brinton's remaining assets.
Also pending are several lawsuits involving Wells Fargo, Brinton and some 29 friends and family members of Brinton's.
Brinton is being sued in 4th District Court by Wells Fargo Bank, which claims Brinton conspired with three bank insiders to bilk the bank out of $47 million in fraudulent loans. The bank claims Brinton recruited 29 friends to use their names and credit to secure 499 residential loans to help support a real estate empire, which includes almost half of the student housing market for Utah Valley State College and a lesser portion for Brigham Young University.
State officials have called it one of the biggest financial scandals to hit the state. Brinton and the 29 Utah County residents have filed their own suits against Wells Fargo Bank in federal court, alleging they were misled by bank officials into thinking the loans were legal.
Most actions in the suits have been put on hold while Brinton sorts things out in bankruptcy court.
Hanna said Brinton has petitioned Clark, the bankruptcy judge, to sell an additional $1.4 million in property to pay Wells Fargo. A decision could come early in April.
In past hearings, Clark has expressed concern that Brinton would be able to resolve the enormous claims of debt against him but has so far allowed Brinton to maintain control over his properties — much to the frustration of bank attorneys.
As part of the bankruptcy actions, Brinton has been asked to submit a financial reorganization plan, which will outline specifics in how he plans to settled his debts. To date he has not filed a plan, leaving it open for banks to make their own proposals to the bankruptcy court on how to deal with his property.
Brinton, who owns the popular Seven Peaks and Trafalga amusement parks, plans to keep them running, despite both of them being in foreclosure, Hanna said, adding the water park will be open for business on Memorial Day.
What waits on the horizon for Brinton remains uncertain. Hanna said Brinton remains committed to paying back every loan "100 cents on the dollar."
Yet Brinton's case has caught the eye of federal authorities. Several top former officials of Brinton's Northstar Development, Construction & Real Estate L.L.C. have told the Deseret News they have been questioned by agents with the Federal Bureau of Investigation regarding Brinton's financial affairs.
E-MAIL: gfattah@desnews.com