Salt Lake City, USA - A judge has ordered the state of Utah to pay off $4.6 million in debt incurred by an accountant tasked with managing a land trust once run by jailed polygamous sect leader Warren Jeffs.
Accountant Bruce Wisan sought payment of the United Effort Plan Trust debts from the courts in June. The debt is for expenses incurred since those working for the trust were last paid in 2008.
The money is owed to lawyers, Wisan's own Salt Lake City accounting firm, an engineering and surveying firm, a public relations firm, and others hired for trust-related business. Wisan alone is owed more than $1 million.
The Utah Attorney General's Office has fought the request, but 3rd District Judge Denise Lindberg said in a court ruling issued Monday that the state is best positioned to cover the debts, which could be repaid later from trust assets. Lindberg noted that state trust laws allows for payment of debt by another party when "justice and equity" require it.
"This is one of those admittedly rare instances... As the court sees it, as between the state on the one hand and (Wisan and others) on the other, the state is clearly better situated to bear this burden while trust administration issues are finally resolved through the court processes," she ruled.
It ordered Wisan to compile a detailed accounting of the outstanding debt and submit it for review by the court and state officials. Lindberg said she will then determine whether to approve, alter or reject the requests and will consider input from the attorney general's office.
"Once the court has made the determination, it will be the state's duty to pay the obligation timely," Lindberg said.
Lindberg has approved all of Wisan's previous requests for payments without alteration.
"I think she lacks the legal authority to order the state of Utah to come up with the money," Utah Attorney General Mark Shurtleff said Tuesday. "I'm very upset, disappointed and surprised by her ruling."
Shurtleff said his office will meet next week to consider whether to appeal. Shurtleff contended Wisan's request for payment violated other state and federal court orders blocking trust management activity until pending lawsuits are resolved.
"We don't have the money. We would have to go to the Legislature for it," he said.
In court papers filed in June, his office also said the request was made simply to protect Wisan's own interests, not to preserve trust's assets.
Formed in the 1940s, the trust holds more than $100 million in property — mostly the land and homes members of the Fundamentalist Church of Jesus Christ of Latter Day Saints — but no cash. The property is in Hildale, Utah; Colorado City, Ariz.; and Bountiful, British Columbia.
The Utah courts seized control of the trust in 2005 amid allegations by state attorneys that Jeffs and other faith leaders had mismanaged its assets.
Jeffs, 55, is the faith's president and prophet. He is on trial in Texas on sexual assault charges for alleged wrongdoings with underage church girls. A court has entered a not-guilty plea on his behalf and Jeffs is representing himself.
Wisan was court-appointed to manage the trust and was to be paid from trust assets. The FLDS have balked at his management and have mostly refused to pay court-ordered monthly occupancy fees for living in their homes. Without cash, Wisan has proposed selling off trust land, but the sales have been blocked by state and federal court lawsuits.
A settlement agreement negotiated by the attorney general's office and proposed in 2009 that would have had the FLDS assume the debt and regain control of the trust was rejected by Lindberg.
In her ruling, Lindberg contended that in recent years, Utah's attorney general has "substantially altered" the state's position on the court's administration of the trust and has acted in ways that undermine Wisan, despite nominating him for the job of managing the trust.
Shurtleff rejected Lindberg's characterization and said that over the past two years he has worked to resolve the trust dispute so that an ever-increasing mountain of debt could be avoided.
He said he supported earlier rulings from Lindberg that the expenses be paid by the trust and disagreed that she must now order payment to protect trust assets. In her ruling, Lindberg contended that if the debt remains unpaid, the trust is at risk of being left "without someone to manage it, attorneys to defend it or other professional assistance."
"There's no imminent threat to the assets because a stay is in place," Shurtleff said.
Rodney Parker, who represents the FLDS in trust matters, declined to comment.