Investors Looking for Ways to Save Bus Shelter Firm : Bankruptcy: They are trying to reorganize Metro Display Advertising in Tustin, which is under SEC investigation.

Investors in Southern California’s largest bus shelter company met Saturday to discuss ways to salvage their investment in the wake of a bankruptcy filing and were told by organizers that federal investigators have been probing the company for nearly a year.

Scott Kraft, a shelter owner who is involved in trying to reorganize Metro Display Advertising, told the group that he has met with Securities and Exchange Commission agents.

Allan Ross, a stockholder and shelter owner who said he has been meeting with company President Jean Claude LeRoyer, said he believes the SEC is investigating the company to see if a pyramid scheme exists in the selling of shelters.

LeRoyer did not attend the meeting, and neither he nor Metro Display’s bankruptcy lawyer could be reached for comment Saturday.

About 200 investors who met at Metro Display’s Tustin headquarters applauded efforts to try to convert their individual ownership of shelters into stock in a reorganized company. They were urged to send letters asking the SEC allow the company to keep operating.

Metro Display, which was doing business as Bustop Shelters of California, filed Wednesday for a Chapter 11 bankruptcy reorganization. It is the largest of three companies that install and sell advertising space on transit bus shelters. Altogether, Metro Display has 2,553 shelters in more than 60 cities and counties in the Southland and southern Nevada.

Unlike its two major competitors, Metro Display has financed its growth by selling shelters to investors in a lease-back arrangement. An investor would pay $9,500 for a shelter, and Metro Display would lease it back for $170 a month for five years. Then, Metro Display was to buy the shelter for $9,500, and give investors a 20% share of advertising revenue for the next five years.

But starting late last month, investors stopped receiving their monthly checks, leading to the bankruptcy filing.

The meeting Saturday was called by a group of shelter owners who want to devise a plan to reorganize the company. The group’s leader said they have reviewed the company’s accounting records and have spoken extensively to LeRoyer.

Ross, who reportedly has invested more than $1 million in Metro Display, told the overflow crowd that the SEC initiated its investigation last February. Earlier this month, he said, the SEC confiscated about 60,000 company documents and has talked with several shelter owners.

Kraft, an owner of four shelters who led a team that has examined Metro Display’s business records, said that investors would receive little more than 2% of their initial outlay if the company were to liquidate at present. Selling shelters to competing companies would bring in no more than 15%, he added.

Ross and Kraft received general support for their plan to create a new organization in which the present shelters owners would control 90% of the company. They said projections show that the investors would have to stop receiving monthly payments, but could start receiving dividends from their shares within six months.

Without the burden of having to pay investors monthly and by doubling the company’s under-performing advertising sales, it could be profitable and continue to grow, Kraft said. “We need to give time to the company,” he said.