Meridian Mortgage founder has questions in his past
Darren Berg compiled an impressive record as an entrepreneur in recent years, raising an estimated $175 million for a series of mortgage...
Darren Berg compiled an impressive record as an entrepreneur in recent years, raising an estimated $175 million for a series of mortgage investment funds while his Seattle-based Meridian Group conglomerate launched software startups, a "green" home-building firm, and a fast-growing and well-respected luxury bus line that catered to West Coast sports teams, resorts and tour companies.
But several Meridian Mortgage funds — and Berg himself — slid into Chapter 11 bankruptcy in late July amid a flurry of lawsuits claiming he misled investors. At least two suits claim that Berg didn't use money raised from investors in the way promised, and there are allegations that money is missing from the mortgage funds.
Now investors might be wishing they'd known about earlier minor blemishes on his record.
According to Oregon court reports, Berg has a 1987 felony conviction for theft over a $433 bad check he wrote to Nordstrom; he paid only after a criminal charge was filed. After failing to perform the court-ordered 50 hours of community service, the 25-year-old Berg was fined an additional $1,150.
A more current matter is the claim on several of his companies' websites that he graduated from University of Oregon. The school says there's no record he did.
In the bus world, there's the impression that Berg's education went even further.
He "paid his way through law school driving buses," reported Metro Magazine, which covers bus and rail transportation, when it profiled "10 Innovative Motorcoach Operators" in 2005.
"Berg is a graduate of the Lundquist School of Business at the University of Oregon and of the University of Oregon School of Law," said a speaker biography for Berg at a conference held last year by the National Limousine Association, a trade group for ground-transportation companies.
But UofO spokeswoman Julie Brown said Berg only attended from fall 1980 through spring 1982, and got no undergraduate or graduate degrees.
Berg, in a brief telephone interview, declined to address questions about his education or the Oregon conviction.
"In light of a million complicated issues that stand to affect 500 people's lives, I frankly can't believe you're focusing on a $300 check I wrote in 1987. I would expect more from the business page of The Seattle Times," he said.
Instead, he said, the emphasis should be on the businesses he's built and the 500 jobs they created.
Berg added: "I am 100 percent committed to working cooperatively with Mark Calvert, the (bankruptcy) trustee, to maximize the recovery to investors. I believe I should be given some credit for being passionately committed to doing the opposite of what others have done in this situation.
"Let's see how much money we can get back to these investors — that should be our focus."
Berg blamed "a collapsed mortgage market and a collapsed real-estate market" for losses to the investment funds, but declined to discuss the problems further.
Four Meridian Mortgage funds were formally ordered into Chapter 11 bankruptcy this past week after claims by investors that they had not been paid the June interest payments expected from the pools of mortgages that the funds own.
Berg sought personal Chapter 11 protection last Tuesday after attorneys for one group of investors in a separate lawsuit obtained a court order and began seizing his cars, furniture and other possessions.
To competitors in the small world of private bus companies, Berg's troubles came as a surprise.
MTR Western, the Meridian bus company, calls itself "one of the largest luxury motorcoach companies in the western United States."
It had 167 of the costly buses, according to a January 2009 report in Metro, and operates from Seattle to Southern California, as well as Vancouver and the Canadian Rockies.
MTR has polished its high-end image with deals to serve major professional sports teams and sightseeing companies, and has touted a commitment to minimizing its environmental impact.
"MTR Western has reduced its emissions by more than 50 percent over the past 24 months by buying 74 new motor coaches outfitted with new generation... engines," according to a 2008 company posting.
One competitor praised Berg as a personable and highly visible player in the business.
Neither Meridian Group nor MTR Western are in bankruptcy.
But Calvert, the bankruptcy trustee for the mortgage funds, said Berg has pledged to make bus-company assets available to help pay the funds' creditors.
Seattle Times researcher David Turim
contributed to this report.
Comments? Send them to Rami Grunbaum:
email@example.com or 206-464-8541.
Furniture & home furnishings
Affordable Massage Training! Get Licensed! ...
AKC and APRA shelties
POST A FREE LISTING