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The ballroom of the Westin Tabor Center was filled with hundreds of couples one Saturday night this past March. Supporters of the Colorado Easter Seal Society had gathered to fete the winners of the society's most prestigious honor, the Edgar F. "Daddy" Allen Award, given annually to the group's biggest boosters.
The winners were Walt and Georgia Imhoff, a Denver couple well-known in charity circles and in Denver's 17th Street financial district. Imhoff is the chairman and founder of Hanifen Imhoff Inc., one of Denver's most prestigious financial firms. Imhoff has made millions through his downtown brokerage, and he and his wife are regularly honored for their support of several local charities.
Today Hanifen Imhoff occupies three and a half floors in the Bank One building on 17th Street and has 280 employees. In 1996 the firm underwrote $2.1 billion in municipal bonds and generated $58 million in revenues.
But for many people in Denver, Walt Imhoff has always been more than just a highly successful businessman. The son of a construction worker, he grew up during the Great Depression and attended local Catholic schools. His conquest of 17th Street has long been celebrated as one of Denver's best examples of a poor boy who made good.
"To Walt and Georgia...With Love" was the theme of the Easter Seal tribute, and Denver's high and mighty gathered to toast the couple. The glittering crowd included such Denver power brokers as US West CEO Richard McCormick, developer Jordan Perlmutter and former Channel 7 general manager John Proffitt.
However, at the same time Imhoff was being feted at the Westin, a very different portrait of the financier was being painted in the local courts. Imhoff and the company he founded are being sued by seven former employees in four separate lawsuits, three of which were filed within days of the Easter Seal gala. All four lawsuits make similar allegations, accusing Imhoff of conspiring to defraud loyal employees of several million dollars.
The first of the quartet of lawsuits was filed last September by Steven Leatherman, the 51-year-old former president of Hanifen Imhoff's investment division and a member of the company's board of directors. That lawsuit stunned many people on 17th Street, since Leatherman is a widely respected investment banker and well-known Democratic activist who has earned his own reputation as a self-made man.
The seven employees together owned about 15 percent of the company's private stock, and they allege that Imhoff and other top executives fired them in the spring of 1996 so they could force them to sell their stock back to the firm for roughly $21 a share. Imhoff was secretly negotiating the sale of the company at the same time he got rid of the employees, the suits allege, and was able to defraud them of as much as $7 million when he sold the company for $97.2 million--about $70 a share--sixteen months later.
Imhoff declined to be interviewed for this story. "I've been advised by legal counsel we should make our comments to the courts, not the newspapers," says Imhoff. "I'm bound by counsel not to comment."
But for those who are now suing their former boss, Walt Imhoff has fallen from the lofty regard in which they once held him.
"For twenty years, I put him on a pedestal," says Bruce Brauer, a former Hanifen Imhoff bond salesman who had worked at the firm for nearly two decades when he was fired. "I admired him a great deal until this happened. I never in my wildest dreams thought he would do this to people who had worked there for so long and been so faithful to him."
Brauer had no experience in the bond business before signing on with Hanifen Imhoff, and he felt enormously loyal to the company for giving him the chance to break into the industry. "I really liked working at Hanifen," he says. "I had no reason to suspect Hanifen wasn't the best company on 17th Street to work for."
Brauer was paid entirely on commission and drew no salary, and he says that made it even harder for him to understand why the company was laying him off. "That's why it made no sense," he says. "It was so phony. They said they were downsizing. They called us in on Tuesday and said, 'We'd like you out by today or the next day at the latest.' They acted like I'd stolen something."
For years, Brauer had been acquiring shares in Hanifen Imhoff as part of the company's profit-sharing plan. By the time he left the firm, he says he owned 13,812 shares. At the book value set by the company, he was paid about $290,000 for his stock. If he'd been on board when the company was sold to Fiserv sixteen months later, he would have earned $953,000 for those same shares.
At first "surprised and confused" by his abrupt dismissal, Brauer says he began to question the company's motive for firing him after talking with other colleagues who had been let go. "I don't think they thought the seven of us would ever get together and talk to each other," he says. But when the ex-employees heard about Leatherman's lawsuit last fall, he says, the pieces began to come together.