Utah developer Terry Diehl files for Chapter 11
Courts • Records show he owes $43 million to creditors ranging from banks to casinos.
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Developer Terry Diehl, a former member of the Utah Transit Authority board, filed for Chapter 11 bankruptcy Friday, and public records show he owes more than $43 million.

Diehl's largest debt is with America First Credit Union in Ogden, to which he owes a total of more than $23 million for three separate loans he personally guaranteed. But the list of creditors includes everything from Las Vegas casinos to a woman seeking spousal support. Local construction and development companies are also owed large amounts, according to Diehl's list of creditors that hold the 20 largest unsecured claims.

Diehl has filed for bankruptcy at least once, in 1992. Chapter 11 bankruptcies are most commonly filed by businesses but can also be used by individuals seeking court protection from creditor lawsuits while they restructure and reorganize.

Calls to Diehl and several of his creditors were not returned Friday afternoon, and his attorney, Blake Miller, declined to comment.

The developer owes $11 million to Bodell Construction Co. of Salt Lake City; $1.49 million to South Mountain, LC, a company he helped found; $800,000 to Kaysville Development; and $350,000 to Cache Valley Bank. He also owes $500,000 for several cars, $72,000 in spousal support, and a combined $450,000 to the MGM Grand and Aria casinos in Las Vegas.

Diehl previously has been sued over some of the listed debts, including in a 2011 case in which Diehl was ordered to pay $2 million to developers South Mountain and GEM. The plaintiffs accused Diehl of diverting the money into a retirement account. Both are among the top 20 creditors.

The filing in U.S. Bankruptcy Court for Utah comes after a seemingly successful week for Diehl, with Cottonwood Heights City agreeing to allow his Tavaci property to disconnect from the city to seek more favorable zoning restrictions in Salt Lake County.

Diehl had claimed that since the housing crisis of 2008, the 43 single-family homes planned for Tavaci would not allow him to recoup his investment on the property at the base of Big Cottonwood Canyon. Diehl had hoped to secure the right to build about 300 condos, as well as a boutique hotel, restaurants and shops. Cottonwood Heights leaders balked at the high density but had offered a compromise of about 150 residential units.

Cottonwood Heights Mayor Kelvyn Cullimore Jr. was surprised when he learned of the bankruptcy filing, though he said evidence of Diehl's financial troubles had surfaced previously in unpaid taxes.

"I would think that if he was in that much financial trouble, he would have taken what we offered and moved forward with his development," Cullimore said. "I guess we unwittingly did him a favor by terminating that litigation."

Reporter Tom Harvey contributed to this report.