FLDS-linked company fails in bid to scuttle suit

High-tech business: Judge rules fiduciary can pursue his challenge of a land, building sale

A 3rd District Court judge refused Monday to dismiss a lawsuit that has pitted a high-tech machine shop based in a polygamous community against a court-appointed caretaker for the sect’s property trust.

Judge Denise Lindberg denied three motions brought by Western Precision Inc., including one that argued special fiduciary Bruce R. Wisan lacked standing to sue the company.

Filed last May, Wisan’s lawsuit alleges that former trustees for the United Effort Plan Trust wrongfully sold Western Precision its land and building, for a pittance of its real value and without accounting for donations made by trust beneficiaries in the building’s construction.

The property trust holds virtually all land and buildings in the adjoining towns of Hildale, Utah, and Colorado City, Ariz. The twin cities are home to the Fundamentalist Church of Jesus Christ of Latter Day Saints.

FLDS church members founded Western Precision, which makes components for such products as aircraft, bicycles and blood pumps, in 1981. Company officials say the move from West Jordan to Hildale in early 2002 was a business decision, although it occurred at the same time hundreds of FLDS members moved to the twin towns. Church leaders had warned the Salt Lake Valley faced imminent destruction related to the 2002 Winter Olympics.

Wisan has managed the UEP trust since last May in a court-approved takeover designed to protect its assets from two civil lawsuits filed against the trust, then-trustees and FLDS leaders.

Western Precision bought its property in the fall of 2004, several months after the suits were filed.

“The trustees got sued and they immediately began unloading property,” said Zachary Shields, one of Wisan’s attorneys.

Wisan contends the UEP’s sale of the land and building for $25,000 was fraudulent. According to tax records, the property is worth $1.8 million. Wisan is seeking return of the property to the trust or fair payment for the land and building.

The company said its purchase occurred because vendors had expressed concern that the UEP held the land; it also wanted to be able to use the property as collateral for a loan.

Its lawyers had asked Lindberg to add GE Capital, which lent the firm $1 million, to the lawsuit as an interested party. The judge refused, saying the lender’s interest in the property would not be impaired whatever the outcome of the litigation.

Lindberg also refused to dismiss the case on grounds that Wisan had failed to be specific in his allegations the property was transferred fraudulently, saying his lawyers had made a case so far based on “actual intent.”

The judge also found that Wisan has standing as a “creditor” of the trust based on new case law as well as her previous instructions to him to manage and safeguard its assets.

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(Listed if other than Religion News Blog, or if not shown above)
The Salt Lake Tribune, USA
May 2, 2006
Brooke Adams

Religion News Blog posted this on Tuesday May 2, 2006.
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