Change in Focus Pushes CPE Engineers Into Black

Times Staff Writer

CPE Engineers of Irvine, which has lost money for seven consecutive quarters and has not had a profitable year since 1980, said Monday it earned $7,599 for its fiscal 1985 third quarter, which ended March 1.

Tim Rellaford, newly appointed president of the company, which formerly was called VTN Corp., said the slight profit resulted from the company shedding itself of unprofitable overseas operations and changing its focus to local construction projects.

Rellaford said the quarter’s profit compares to a loss of $444,981 for the third quarter of fiscal 1984. He said the company’s revenues totaled $6.3 million for the period, nearly double the $3.9 million in sales reported a year ago.

CPE has been under new management since August, 1984, when Anaheim builder and entrepreneur Al Rattan acquired a controlling interest for $3.4 million in the financially troubled company, one of the nation’s largest engineering and land-planning firms.


Rattan, sole owner of Continental Pacific Enterprises of Anaheim, a health care facilities builder, became president and chairman of VTN and immediately changed its name to CPE Engineers. He sold off the company’s environmental planning group and ended its involvement in overseas construction planning and project management.

Rattan also laid off about 20% of the work force and acquired a construction division to enable CPE to build projects as well as design them.

Earlier this month, Rattan relinquished the CPE presidency--as he earlier had said he would--to Rellaford, who joined CPE in August as part of Rattan’s management team.

Rellaford said Monday that CPE plans to increase its construction backlog, which has already doubled since the August takeover.

He also said that CPE is actively pursuing an appeal in a San Diego lawsuit which resulted in a $3.5 million negligence verdict against the company, stemming from land planning work done in 1980 under the company’s former ownership.

The San Diego jury found that VTN Consolidated, a subsidiary of the former VTN Corp., was responsible for losses sustained by a San Diego real estate investment group when the newly incorporated City of Poway reduced the number of units permitted on property that had been engineered by VTN.

The landowner, Executive Investment Group Inc., decided the project would be unprofitable with fewer units, dropped the project and sued VTN, claiming the company should have been aware of changes in the formula for determining the unit density for the site.

VTN claims it used the formula in existance at the time and says performed its engineering work on the property before Poway’s incorporation and the city’s subsequent adoption of new land-use laws.