Taking Care of Business:
The Randy Previs Files
A four-part Island Times investigative series
By LIAM MORIARTY
Part One: Overview
The man who would be king of Orcas Island's largest marina has a long and well-documented history of financial failures and questionable business dealings.
Developer Randy Previs, conducting business under at least 22 separate corporate and partnership names since 1979, has left behind him a twenty-year-long trail of bankruptcies, foreclosures, defaulted loans, broken promises, unpaid bills, unfinished projects and abandoned obligations. More than one Previs project has collapsed into a rubble of insolvency and acrimonious litigation, leaving hapless investors holding the bag.
The Island Times has taken a detailed look at Previs' track record over the past two decades. What we found raises a disturbing question: Will Orcas Island be the site of Previs' next spectacular failure?
"A project for the future"
The plan is ambitious; a $20 million-dollar, 94-slip marina, the largest on Orcas Island and by far the most expensive development of any kind ever undertaken on the island. Randy Previs acknowledges that he's never built a marina, or anything else as elaborate as the Orcas Bay proposal, but he says Bill Anderson -- his business partner in Seavestco Inc. -- has.
Previs says he and Anderson have hired the best engineers, designers and researchers in the business to advise them on the project, and he promises to build a beautiful marina that the island will take pride in.
"This is a project for the future," he proudly told The Island Times in a recent interview at his Dolphin Bay home. "This facility will be second to none."
But considering how he's performed in other places around the state, Previs' assurances may not be enough to calm the fears of local residents who are nervously eyeing his plans to radically change the look of Orcas Island's front door.
The paper trail starts with Previs' first bankruptcy, filed on Feb. 25, 1980. Faced with a mountain of debt, including court judgements and unpaid bank loans, Previs claimed $1.16 million in assets against $731,000 in liabilities. He sought Chapter 11 protection, he said in an April 18 court affidavit, to reorganize and pay off his creditors.
"I believe … that my assets are substantially greater than my liabilities and that all my creditors will be paid 100 cents on the dollar with accrued interest."
But Previs apparently got off on the wrong foot early in the proceedings. Just a few days before filing for Chapter 11, Previs transferred ownership of some waterfront real estate on Hood Canal to his father. The court later ruled the transfer -- which listed the price of the transaction as "love and affection" -- a fraudulent attempt by Previs to put assets out of the reach of his creditors.
About this time, Previs also sold a 53-foot Hatteras yacht named "The Brute" for $273,000. He spent most of the money before it could be applied to his bankruptcy. Some went to pay off debts; some went toward living expenses. A $13,000 chunk was given to his girlfriend, Katie Propst, whom he described as a "caretaker." Katie later became Randy's wife and business partner.
These incidents, along with his finding that Previs initially filed papers that valued his assets at $335,000 less than they were actually worth, alarmed Judge Samuel J. Steiner, who presided over the bankruptcy case.
"In my opinion, both the transactions, that is, the land and the boat, are highly suspect," Steiner says in an April 18, 1980 ruling. "I feel the payment (of $13,000 to Katie) on the eve of filing … is highly suspect from the point of view of a fraudulent conveyance."
Just six weeks into the Chapter 11 filing, Judge Steiner decided Previs couldn't be trusted to conduct his own affairs during the bankruptcy and appointed a trustee to take over.
In 1983, after several prospective deals had fallen through, Judge Steiner concluded Previs wasn't going to be able to make good on his reorganization plans. Over Previs' vehement protests, the judge converted the Chapter 11 reorganization into a Chapter 7 liquidation.
During the entire case, Previs battled with his court-appointed trustee, routinely filing challenges to trustee decisions. In 1985, he sued the trustee, alleging malfeasance that he says cost him over $1 million in lost value to his estate. That claim was later dismissed when Previs failed to show up for a pre-trial conference. His appeal of the dismissal was denied.
When the protracted case finally ground to an end in 1988, Previs had already set in motion the chain of events that would culminate in another Chapter 7 bankruptcy just two years later.
The Litigation Blues
Previs has spent a lot of time in court over the past two decades. According to court records in eight Washington counties, he's known to have been a party to at least 41 civil lawsuits -- not including his two federal bankruptcy filings -- since 1979. In those suits, Previs has been the defendant 30 times. He's been the plaintiff eight times, and in three cases his status is unclear.
Typically, those cases have been brought by companies, banks or individuals who had lent money to or performed services for Previs or one of his many corporations and weren't paid. Some are the sort of small-change disputes that often arise between business people in the normal course of commerce.
But others reveal a pattern of failing to honor financial obligations on a sizeable scale.
A few examples …
"That's all in the past"
Asked about the bankruptcies, lawsuits and charges of unscupulous dealings, Previs says islanders have no need to worry about the financial stability of the marina project.
"That's all in the past," he says. "From my perspective, there's not a problem paying for this, either building it or holding onto it."
Previs says his current financial position is strong, and that of his Seavestco partner Bill Anderson is even stronger.
"As a matter of fact, Bill can pay for this project without financing, and may," Previs adds. "Bill has backed a number of projects of mine financially, and every one of them has been successful."
"We've got nearly half a million dollars into this project into this already," Previs continues. "Each of us has paid our share of the bills generated as a result of what we're doing here. And this is a non-financed deal. It's an out-of-pocket deal."
Where there's smoke …?
All businesses have their ups and downs, and developers are particularly vulnerable to the vagaries of the real estate market and the volatility of large-scale cash flows.
But, taken as a whole, Randy Previs' documented history can be fairly said to raise legitimate red flags for anyone affected by his business deals.
Over the next three weeks, The Island Times will take a closer look at that history …
Coming Next Week …
Part Two: The Bankruptcy from Hell
Previs' 1980 bankruptcy was extraordinarily long, contentious and expensive. It covered nearly eight years and the official file is a brick of paper that stands more than two feet high. Eleven years after it ended, lawyers involved in the case remember it as The Bankruptcy from Hell.
And in a Sept. 1983 hearing, Judge Samuel Steiner placed the lion's share of the blame for the legal nightmare on Randy Previs.
"Beyond that, it seems to me like you have been one of the major problems in this case, right from the start," the judge told Previs. "A great deal of work and effort that has gone into this by the trustee and his attorney has been as a result of your activities. One could infer from what's gone on here that you've attempted to thwart the trustee and the creditors at almost every step in this case."
Coming Feb. 23…
Part Three: "Oh, what a tangled web we weave …"
Between 1980 and 1985, with his financial affairs supposedly under the supervision of a court-appointed bankruptcy trustee, Previs legally obligated himself for hundreds of thousands of dollars in loans and professional services in an effort to salvage his investment in a property on the shores of Lake Washington in Kirkland. His efforts to build Marina East, a 22-unit luxury condominium complex and marina, collapsed in a tangle of liens, foreclosures and lawsuits that led directly to another bankruptcy in 1990, in which creditors were left holding the bag for $1.25 million.
Coming March 2…
Part Four: More of the same
More lawsuits, the Anacortes story and a curious land deal or two.
|This article is copyright 1999 The Island Times. Reposted here with permission.|