On April 19, 2010, Valley Mortgage, Inc. filed for protection as a "Debtor in Possession" under the U. S. Bankruptcy Code. The
bulk of the Receiver's former activities, including the marshaling and sale of assets, the possible pursuit of legal claims against
third parties, and the administration of all creditors' claims will now be administered through the bankruptcy process. The
State court receivership action will continue in certain limited respects, chiefly involving the injunctive relief requested by the
Colorado Commissioner of Securities against certain Lochmiller family individuals.
The primary reason for seeking bankruptcy
administration was the ability of the Bankruptcy Court to promptly sell the assets of the estate, and then resolve disputes over how
these proceeds should be allocated among creditors. The Bankruptcy Code provides an efficient procedure for selling these assets
free and clear of liens. This is a faster process for selling the assets than would have been available in the State court receivership,
which in turn should reduce the administrative costs of the estate.
The Denver District Court initially had exclusive
jurisdiction over the Receivership, as required by the Colorado Securities Act. Now that Valley Mortgage Inc. has filed for
bankruptcy, administration of the estate will be supervised by the United States Bankruptcy Court for the District of Colorado.
first meeting of creditors, at which all creditors or their counsel may appear and question the debtor, was held at the Grand Junction
City Hall Auditorium on May 26, 2010, at 9:00 a.m. At this first meeting of creditors, a representative of Rider & Quesenberry,
LLP was present with the debtor's counsel, Linquist & Vennum PLLP of Denver.
Notices and communications previously
issued by Rider & Quesenberry, LLP as Receiver for Valley Mortgage, Inc., will cease. Going forward, the matter will be
captioned as "Valley Mortgage, Inc., Debtor in Possession." However, throughout this process Rider & Quesenberry, LLP will
remain in control of Valley Mortgage Inc., Debtor in Possession; the prior owners and operators of Valley Mortgage will not be involved
with the company in any way.
Creditors and investors of Valley Mortgage Inc., have been accustomed to reviewing quarterly reports
from the Receiver on this website. Those quarterly reports will no longer be posted on the website. The Debtor in Possession
will continue to post to this website the initial report of the Debtor in Possession and quarterly reports of the Debtor in Possession,
in a format prescribed by the U. S. Trustee's Guidelines for Chapter 11 Administration.
On 11/01/2011, the Bankruptcy Court entered
the Order Confirming Debtor's Chapter 11 Plan of Liquidation Dated June 17, 2011.
Creditors should refer to the FAQ section for
more questions and answers.