Former Executive’s Complaint : Silvercrest Accused of Misuse of Investments
A former Silvercrest Corp. executive says he has complained to the federal Securities and Exchange Commission that Silvercrest took investors’ money but never built the mobile home parks it had promised them.
Richard Allen, a former vice president at the Santa Ana company, said Thursday that SEC officials questioned him at length Tuesday about the company.
Allen, who was fired and then rehired in a stormy relationship with Silvercrest President Richard Simonian, said he and other investors want an accounting of their money.
A Silvercrest lawyer said Thursday that the company and Simonian had been advised by outside counsel not to comment.
SEC Declines Comment
The company says it has not been contacted by the SEC, and “does not expect to be.”
The SEC also declined to comment.
Allen’s complaints are only the latest troubles to hit the mobile-home manufacturing company.
Silvercrest said earlier this week it was negotiating to sell its manufacturing unit, which accounts for most of the company’s revenues.
Earlier this year a real estate project in the San Fernando Valley went sour, plunging a Silvercrest subsidiary into bankruptcy and a court fight with giant Los Angeles home builder Kaufman & Broad, a former partner in the project.
The dispute with Allen and other investors involves six limited partnerships put together between 1982 and 1987, involving $2.7 million and about 100 investors.
The partnerships were formed by a Silvercrest subsidiary to build mobile home parks, a park for recreation vehicles, an equestrian club and a custom-home subdivision.
A lawyer for Allen, Robert Schacter, says most of the six partnerships have lost money and some of the limited partners want their money back.
Simonian, say Schacter and Allen, has instead offered some investors stock in the company and an interest in other limited partnerships.
Schacter represents 13 of the 60 partners who invested $525,000 in 1983 in an Irwindale park for recreational vehicles and who are now suing in Orange County Superior Court.
Schacter said the subsidiary spent $290,000 on what it says were engineering and development costs, but has yet to build anything.
“We want to know what they did with that money,” Schacter said.
Meanwhile Allen, who left the company last year, has also sued. He is alleging Silvercrest still owes him $20,000 for his work, which included bringing investors into the limited partnerships.