Wednesday, October 22, 2014 - Loading…

Published: Friday, 8/24/2012 - Updated: 2 years ago

Solar-panel maker Willard & Kelsey told to pay $5M loan

Perrysburg firm again in arrears

BY KRIS TURNER
BLADE BUSINESS WRITER

COLUMBUS — The Ohio Air Quality Development Authority on Thursday recalled a $5 million loan from Willard & Kelsey Solar Group, marking the second time this month a state agency has demanded the Perrysburg company return taxpayer funds.

Willard & Kelsey has until Sept. 3 to repay the more than $5 million balance of a July, 2009, loan from the authority. The loan was called due because the solar-panel manufacturer regularly missed or made partial payments to the state. It owes the authority more than $1.1 million in back payments.

This is the first time in the authority's history it has called a loan due. The discussion preceding the decision regarding Willard & Kelsey's loan was held in a closed session that lasted for about 90 minutes Thursday morning. The board unanimously voted to close the meeting because it was deemed a legal matter.

"For these folks, at this particular moment, they don't have the capital to make it go," Gayle Channing Tenenbaum, chairman of the authority's board, said after the meeting. "Do we hope down the road that could turn around for them? Absolutely.

"For right now, they need to be responsible in terms of the loans that they have acquired and figure out a way to pay those loans back."

Last week, the authority offered Willard & Kelsey a deal in which the company had until Wednesday to agree to pay $1 million and make a personal or corporate commitment for the remainder of the loan balance. Willard & Kelsey was unable to make the $1 million payment, Ms. Tenenbaum said.

Willard & Kelsey Vice President of Development Mossie Murphy wrote in an email Thursday that the company did not wish to comment. Michael Cicak, the firm's chief executive officer, did not return a call seeking comment.

Willard & Kelsey has faced staffing, production, and financial issues since 2009, a year after the company was formed.

In an annual report filed with the state, the company said it had created only 59 jobs.

A state document obtained by The Blade through a public records request stated that in 2009, the company had revenues of $500,000 — a grant from the state — and a loss of $4.2 million.

A Blade investigation found that company executives received about $1.4 million in loans or payments from company funds in 2008 and 2009. Internal company documents obtained during the investigation also show executives spent funds to attend Detroit Tigers and Pittsburgh Steelers events and to buy airline tickets for family members.

William Mitchell, the firm's former CEO, had said the company used state loan funds to compensate executives. If true, those payments would violate the company's state loan agreements.

Mr. Mitchell was fired from Willard & Kelsey in 2009 and died in 2011. Willard & Kelsey executives have denied misusing state loan funds.

The Ohio Air Quality Development Authority has probed the financial viability of the firm since May with the help of GBQ Partners LLC, a Columbus accounting firm. Beth Savage, director of financial advisory services at GBQ, spoke during the authority's meeting and said GBQ agreed with the decision to call the loan due.

"Our recommendation to this board today would be to support the resolution that was just made basically calling the loan," Ms. Savage said. "We do support the date of Sept. 3 for demand for payment. We would also recommend you continue to analyze the situation."

GBQ did not submit a written report to the authority and has communicated its findings verbally, said Todd Nein, interim executive director of the authority.

GBQ examined financial records and company projections and had numerous conversations with Willard & Kelsey executives, Ms. Savage said.

Earlier this month, the Ohio Department of Development called a $5 million loan it granted to Willard & Kelsey due because of partial or delinquent payments. Willard & Kelsey has until Sept. 5 to make that payment. If it fails to pay, the money will be collected by the Office of the Ohio Attorney General.

If Willard & Kelsey does not pay the air quality development authority the remainder of its loan balance by Sept. 3, the collection process is unclear, Mr. Nein said. The authority is working with its lawyer to determine the best way to recoup the money if that happens, he said.

Contact Kris Turner at: kturner@theblade.com or 419-724-6103.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories