The Trouble With Harry

Big dreams, big houses -- and a trail of lawsuits from here to Troublesome Gulch.

News of Harry Elder's inheritance raised hopes among his creditors that their claims might finally be addressed. But Elder had other plans for the insurance money, including rescuing his dream homes from foreclosure.

"People are so angry that he got away with this, and then he absolutely thumbed his nose at us," says one lien-holder. "When he had money to pay back these little people, he bought back property instead."

Elder points out that the mountain of debts incurred in the course of building the four homes, disputed or not, weren't his personal liability; they were debts of his father's estate. The insurance money, on the other hand, belonged to him; it wasn't an asset of the estate. Still, he says, he tried to do the right thing for everybody involved, despite a difficult market and once-friendly lenders who'd been taken over by strangers.

caricature by Matt Collins
Persistence: Troublesome Gulch builder Harry Elder.
Persistence: Troublesome Gulch builder Harry Elder.

"Never did I think that the banks that were funding these things would basically evaporate on me," he says. "The banks stopped funding the loans, and the project came to a halt. I got no correspondence for over a year from the people who bought the construction loans. They hadn't sent any billing statements. When my father passed way, there weren't any funds in the estate to make any payments."

The failure to keep current on the loans opened the door to foreclosure actions. While Elder was fighting desperately to close that door, he was also stringing along subcontractors and others, according to Janel Wiese, a nanny who worked in Elder's home for several months last year.

Wiese says the job of looking after Elder's children soon evolved into acting as a personal assistant as well, helping to direct workers on the big houses and arranging for payment. "He was never on time with payment," she says now. "I had worker after worker coming to me, saying, 'Harry didn't pay me' or 'His check bounced.' He had collection people calling constantly, calling for him and his father. They didn't know his father was deceased. There was mail he wouldn't open for months. Harry didn't seem to be bothered by it."

Elder was frequently absent. "He told me he wasn't paying certain workers because he didn't feel they did the job he wanted, even though he was never there to make decisions," she says. "These workers did what they thought he wanted, but he'd get another week of work from them and then not pay them. He was very blatant in letting me know he was going to do that."

Wiese testified on Elder's behalf in his divorce trial. Later, however, she wrote a letter to the opposing counsel claiming that she'd been manipulated and deceived by Elder. "When I made clear my intentions to leave his employ for breaching all agreements, I saw a side of Harry Elder I had not seen until that time," she wrote. "Harry Elder accused me of being an extortionist, a danger to his family and children, and threatened to press charges against me for sexual danger to his children. These things were said because I was asking him to live up to our agreements and compensate my salary loss with severance pay.

"Harry did not want me to quit, did not want to pay, and did not want to lose control. He blatantly told me he had only to make accusations to ruin my reputation."

Elder denies Wiese's allegations. He says she was fired because "she had done some things that were against the law," but he declines to elaborate. "We no longer felt she was safe with the children," he says. "I don't want to go into detail."

Wiese, who describes herself as a "high-end nanny" who's worked all over the world, says she never did anything improper, much less illegal, while in Elder's employment. "I was a very good nanny for him," she says. "I took over the whole house. That was part of the problem. He was never there. He didn't hold up any of his end. I had to bring the police when I went to get my things because I was afraid he would say things that weren't true."

Thanks to some canny negotiations, the Elder brothers were successful in prying two of the four new homes from the predations of foreclosure. With the cash infusion provided by Harry's insurance money, they were able to pick up the notes on the properties at a discount and refinance. Both homes are now titled in the name of John Elder; the sale price of one is recorded as $1.5 million, the other as $1.3 million. But that doesn't mean John Elder actually brought $2.8 million in cash into the deal; both homes now carry new, hefty mortgages, one for a million dollars, the other for $585,000.

Harry Elder says he paid off tens of thousands of dollars in mechanics' liens on each property to obtain the new loans. (Not every subcontractor who claims to be owed money bothers to file a lien or to pursue the matter through the foreclosure process.) He says he had every intention of doing the same for the other two homes his company built.

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