Harmon investors will get their say, judge rules

Investors attempting to recover funds lost through the defunct Harley L. Harmon Mortgage Co. of Las Vegas gained permission to form panels to advise the court-appointed receiver.

At a status hearing Monday, Clark County District Judge Stephen Huffaker told investors they could form panels of between five and seven members per investment to assist receiver Bernie Chippoletti of Las Vegas. The state stripped the company of its business license after alleging that Harmon mishandled mortgage loan investments.

Chippoletti was appointed by the court to liquidate real estate assets tied to the Harmon loans in an attempt to recover as much money as possible. Of the estimated $23 million in loans handled by the company at the time it closed in December 1997, the receiver has recovered assets of about $17 million of the investments.

Tisha Black, an attorney for Chippoletti, said after Monday's hearing that "the investor panels are an all-around good thing" that could help the receiver do his job. Chippoletti complained in the past that he was so deluged with telephone calls from investors that it took time away from his duties.

The panels would allow investors to form small groups of representatives to share information and concerns with Chippoletti. The panels would then report back to all other investors in their particular loan. Some loans involved only a few investors, but other loans had dozens of investors.

Investor Louise Ellsworth, a retired banker who also was an aide to then-U.S. Sen. Paul Laxalt, said she believed Chippoletti was doing a good job even though she hasn't always agreed with him.

"I definitely think the judge gave the investors the option of having a greater role," Ellsworth said. "I don't know what that will lead to but it opened the door."

Attorney John Netzorg, who represents some investors, also agreed with the decision by Huffaker that will make it easier to liquidate properties that have tax liens.

"As far as having more investor participation, that's good," Netzorg said.

Black said that of the 42 loans that remained active when Harmon closed, the receiver has settled or is in the process of squaring 25 of those loans. In nine of those cases the investors recovered all of their investments. In one case, they recovered about 65 percent. In 15 other cases, the assets are in the process of being sold to help recover investor money.

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