Joint Purchase By Three Investors At Foreclosure Auction Deemed Bid Rigging By Colorado Appeals Court

In Aspen, Colorado, The Aspen Times reports:

• A foreclosure auction on an Aspen condominium unit was tainted by bid rigging, the Colorado Court of Appeals concluded in a 54-page order issued last week. The unit sold at a Feb. 27, 2008, auction conducted by the Pitkin County trustee.

• The bid rigging occurred, the court determined, when three individual bidders — Mike Seguin, Debra Mayer and Tom Griffin, who was representing an Avon businessman — formed a limited liability corporation called Aspen Alps 123. The LLC claimed ownership of the unit, located at 700 Ute Ave., with a winning bid of $1.86 million, which was the amount Seguin had bid. “Then they agreed to stop bidding and form [Aspen Alps 123] to purchase the condominium unit,” the appellate court said. The ruling added that “because the three bidders intended their agreement to eliminate further competition among them, we conclude that they engaged in bid rigging.” The three had not been associated with each other until they formed the LLC, the court ruled.

• According to state statute, “it is illegal for any person to contract, combine, or conspire with any person to rig any bid, or any aspect of the bidding process, in any way related to the provision of any commodity or service.” The appellate court's decision reversed a previous ruling made by a Pitkin County district judge, who determined that joint bidding occurred. Joint bidding is a legal means of bidders pooling their resources together to buy a property they otherwise could not afford.

For more, see Appellate court: Aspen auction tainted by bid rigging.

For the ruling, see Amos v. Aspen Alps 123, LLC.