Holms Inspires Misplaced Trust
When Allan Holms walked through the showroom door a year and a half ago, Rick Utter trusted him with tax payments and the company account without making much effort to find out about him.
He wasn’t the first businessman to trust Holms, then regret dealing with him.
“Allan is probably one of the best salesmen you could ever meet: very, very charming, and a sharp dresser. He could sell ice to Eskimos,” said Roy Stanley, former owner of Roy Stanley Chevrolet in Kalispell. Stanley sold his dealership in 1992 to Holms, who changed it to Great Northern Motor Car Co.
The Kalispell Police Department and Flathead county attorney investigated the dealership because several consumers complained that Western General Warranty Co. did not receive payments for their purchased warranties.
Darla Eckert, a Kalispell resident who bought a Toyota from Holms in 1993, purchased an extended warranty on her ‘91 MR2 for $1135. When her speedometer broke months later, Sam Johnson of Encino, Calif.-based Western General told her he had never received payment from Great Northern.
“We were told the dealer was out of business,” Johnson said. Because Eckert had financial statements proving she paid for the warranty, Johnson agreed to fix Eckert’s speedometer to avoid legal hassles. He said he still has not received payment.
When asked about the dispute and at least four others like it, Holms denied responsibility.
“I had management in Kalispell that screwed up. When I found out (about the unpaid warranties), I paid them,” he said.
Similarly, Holms diffused blame for the 18 Spokane car buyers forced to drive for weeks with expired temporary plates. The consumers, all of whom bought used cars from Holms, alleged that Holms didn’t pay the Department of Licensing for their plate and tab fees.
“When it ended, I paid them out of my own pocket. Everyone will forget about this whole thing soon enough,” Holms said shrugging.
Holms also dabbled in dentistry and welding, among other ventures. In 1980, he bought American Dental Company of Missoula, valued at $7 million, and changed the name to American Dental Manufacturing Co.
Glendale Federal of California repossessed the company and by 1987 it was worth a scant $292,189. By 1988 Holms’ attorneys said it was worth nothing. In a less than a decade of Holms’ direction, a $7 million company became worthless and the funds have never been accounted for, according to court records.
“He just comes in like a white knight and people buy into his program,” said Tom Thompson, grandson of the co-founder of American Dental Company of Missoula.
Holms would not answer questions about the dental business. When first questioned, he denied that he had bought or sold any business in the past eight years and said he’s never filed for bankruptcy.
“I’ve been a business consultant for a long time. I haven’t been in business since 1987,” he said in a June interview.
He added that he didn’t count the Great Northern venture in Kalispell - or Great Northern Leasing in Missoula - because he wasn’t involved in the daily running of those businesses. He also said he didn’t count two new Chapter 11 bankruptcies filed in the past two weeks - Newco Corp. and Kal Miss, Inc. - because they weren’t personal bankruptcies.
But court records show that Holms was working in the late ‘80s and early ‘90s. Holms was busy from 1988 to 1992 with litigation and bankruptcy filings for one of his many umbrella companies, A.G. Holms of Washington Inc.
When a group of North Dakota investors sold their welding company to Holms in 1981 on a promissory note of almost $2 million, they assumed Holms would pay the note in $15,056 monthly installments, according to court records.
Instead, Holms declared bankruptcy and attempted to absolve himself of the debt he assumed for Fargo Cylinder Gas & Welding Equipment, Inc. The 1988 bankruptcy case filed by A.G. Holms of Washington Inc. evolved into a fouryear ordeal that one attorney for the creditors described in court memorandum as “a multiple corporation shell game and tax dodge.”
Attorneys for Holms’ largest creditors alleged that Holms was filing for bankruptcy in order to avoid paying a $1.8 million debt to Jack Holden and three other co-owners. They claimed that Holms - who then owned a pair of Jaguars, sport-utility vehicle, 5-acre ranch in Missoula, $60,000 worth of other property and at least eight investment companies - could pay off creditors with personal funds.
Further, creditors’ lawyers argued that the purpose of Chapter 11 is to reorganize and strengthen a failing business. But A.G. Holms of Washington Inc. was nothing but a defunct skeleton that the owner had no intention of reorganizing, they said.
“Mr. Holms is, obviously, a very shrewd businessman that knows how to play the shell game with the shell corporation,” said Holden’s Spokane attorney John Krall, according to 1988 bankruptcy court transcripts.
“I am not saying that he is dishonest, but he is clever and shrewd, and he is obviously using this ploy to his best advantage,” Krall concluded.
In 1992, a judge forbid Holms from filing Chapter 11 and dismissed the case. Holms’ detractors might say the verdict upholds Krall’s image of Holms as a crafty entrepreneur who exploits federal bankruptcy policy.
Holms, however, had another explanation. When confronted Thursday with court documents proving that his companies have a history of bankruptcy, he conceded that, in fact, some of his companies have filed for Chapter 11. But he denied it was a bad-faith attempt to avoid creditors.
Actually, Holms said, the dismissal wiped his record clean and now he can swear that none of his companies have ever gone bankrupt.
“The company didn’t declare bankruptcy. (The case) was dismissed,” he said before driving away in a gray Lexus. “We sat around a table and negotiated a settlement. Everyone came out happy.”
Holms said he failed to mention that in the past two weeks his Newco Corp. and Kal Miss, Inc. filed for bankruptcies because he was unsure if they would be dismissed, too.
As Holms blazes across the Northwest, officials are watching. The Department of Revenue is studying Utter’s delinquent taxes during Holms’ tenure as manager.
Although he has no criminal record and he has been cleared of all complaints filed in the Montana Consumer Affairs Unit, some agents see his on-the-move ethic as disturbing.
“When he sold his Missoula business, he moved out right away,” said Bill Henecke, investigator for the Montana Titles and Registration Bureau in Helena. “He just kind of folded his tent and disappeared in the middle of the night.”
, DataTimes