Developer faces $2M judgment | AspenTimes.com

Developer faces $2M judgment

Rick CarrollAspen, CO Colorado

ASPEN A Basalt-based spec-home developer is on the hook for nearly $2 million in the wake of a breach-of-contract lawsuit that a Nevada lender filed.Aspen Devco LLC manager Randy Egan recently signed a “confession of judgment,” effectively conceding his company and a host of its alter-ego corporations owe $1.98 million to JSS Property Investment LLC.The judgment comes after JSS Property sued Aspen Devco in August in Pitkin County District Court, alleging that Aspen Devco reneged on at least four six-figure loans it received to make land acquisitions. Additionally, the suit claims that in April, Aspen Devco bounced a $30,000 check to JSS Property. Egan declined to comment Friday, referring questions to his Denver attorney, Phillip Theune. Theune was not available for comment.”They admitted they are liable for what we alleged, and we’re very happy they consented to the judgment,” said Snowmass lawyer John Rediker, who filed the suit on behalf of JSS Property.The judgment, which includes an annual interest rate of 18 percent on the first $1 million owed, has yet to be paid, Rediker said. Aspen Devco, which formed in 2005, bills itself as a builder of “green homes.” While Egan is its manager, Basalt resident Ronald Wallace also has connections to it, and JSS Property’s suit maintains Wallace and Egan directed the affairs of Aspen Devco and two of its LLCs – West Hopkins LLC and Silver King LLC. Even so, Wallace is not a defendant in the lawsuit. Wallace made headlines in February when a federal judge sentenced him to house arrest for five years on a conviction for money laundering, wire fraud and mail fraud. The charges were connected to a Ponzi scheme in which he sold French wines never delivered to customers who bought them. He has been given five years to pay $11 million in restitution to the victims.Earlier this year, Wallace handed out business cards for Aspen Devco with his name on them.Meanwhile, the lawsuit says there was “no meaningful distinction” among the three LLCs, and they all commingled and their funds “have been misused for the personal benefit of Defendant Egan and others.”One of Aspen Devco’s first real-estate deals came in June 2006, when it paid $7.7 million for a split lot across the street from the former Boomerang Lodge, on the 500 block of West Hopkins Avenue.The suit claims that JSS Property loaned $200,000 to Aspen Devco to help fund the purchase of the Hopkins land. Aspen Devco, the suit alleges, agreed to pay an “investor distribution” of $166,667 to JSS Property after the sale of the first duplex on the property, which remains undeveloped and has changed hands since the loan was made.A similar situation happened with Aspen Devco’s June 2006 purchase of land at 1590 Silver King Drive for $3.6 million, the suit alleges. Likewise, Aspen Devco agreed to pay $66,667 to JSS Property after the first duplex on the property sold, along with other bonuses and finder’s fees, the lawsuit claims. But Aspen Devco’s recent sale of the Silver King property “has triggered a number of financial obligations which are now owed JSS by Aspen Devco,” the suit says. Records from the Pitkin County Assessor’s Office show that Aspen Devco flipped the property in August for $4.8 million to Silver King Realty Partners LLC.The suit also claims that last year JSS Property loaned $300,000 to Aspen Devco for earmarking as earnest money for the purchase of land on McSkimming Road. But while property was never purchased, Aspen Devco did not reimburse JSS Property, the lawsuit alleges.Around the same time – in December 2006 – JSS Property loaned another $300,000 to Aspen Devco for its acquisition of land on Lupine Drive. Again the deal fell through, and again the money was not refunded, the lawsuit says. Rick Carroll’s e-mail address is rcarroll@aspentimes.com