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North Haverhill company accused of illegal banking
State officials are concerned that the company has little cash on hand to pay those debts, since the $12 million in assets cited in the bankruptcy documents consists mostly of anticipated payments on outstanding loans.
Tamposi acknowledged that the $12 million in assets is almost entirely in accounts receivable. "The company has enjoyed a very low default rate on loans," he said. "So we have no reason to believe that most of that won't be collectible."
Two of the largest investors are David E. Patten of North Haverhill, UVCC president; and Alvin S. Fadden, also of North Haverhill, vice president. Both are referred to as "insiders" in the bankruptcy filing.
The bankruptcy was not the result of any insolvency or complaints by creditors, he said, but came about in negotiations with state officials who initially wanted to seek court-ordered receivership, which would put control of the company in the hands of a court-appointed third party.
Officials in both the securities and banking departments confirmed that no formal complaints by investors have been filed against UVCC. "We are not aware of any complaints," said White. "We searched the records that we have available here, and we had not heard of them before."
The company was never licensed or chartered as a bank. It may have been licensed to sell securities at one point, but that license lapsed after the passage of the Uniform Securities Act in 1982, according to Jeff Spill, deputy director at the securities division.
According to the bankruptcy filing, David E. Patten has invested nearly $3 million in the company. His father, Edward C. Patten, died in May, and was recognized in his obituary as an "entrepreneur, financial consultant and propane distributor."
His widow, Alfa M. Patten, has nearly $300,000 invested.
The action taken against UVCC comes as state lawmakers prepare to reconsider a bill that would establish a special state fund to compensate fraud victims of Financial Resources Mortgage, the Lakes Region investment firm that collapsed in 2009.
Spill said regulators are keeping all options open.
"We intend to continue to investigate this matter and we may bring further actions in the future," he said.
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