Disputes over the language of Buckeye Silicon's $1.4 million loan agreement prompted the air authority's board to seek a second legal opinion on the contract. The air authority wants to clarify when the company was supposed to start repaying the state and whether it should be making principal payments on the loan.
The five months of missed loan payments also could be a part of that discussion.
"Have they defaulted or have they not according to the terms of the contract? That's what we're looking to see," said Gayle Channing Tenenbaum, chairman of the air authority's board.
One question is whether a delay in the delivery of key equipment triggered a change in loan payment dates for Buckeye Silicon. That date would determine whether the company makes interest-only payments, larger ones on the principal, or is in default.
The board has yet to decide whether the state attorney general's office or a private law firm will handle the matter, Ms. Tenenbaum said. She hopes to have the issue resolved before the board's Sept. 11 meeting.
If a private firm is hired to review the contract, it would add to escalating costs being incurred by the air authority that relate to Buckeye Silicon.
Buckeye Silicon began to miss loan payments in December, 2011, and was delinquent through April of this year. The company paid $1,890 in April to cover the missed December payment and paid for the other missed payments June 4. Those payments totaled $10,052.
"The only time they produced any results is when they heard GBQ was going to come," said Jeff Jacobson, a member of the air authority's board.
The air authority is probing Buckeye Silicon's financial viability with the help of GBQ Partners LLC, a Columbus accounting firm.
The firm also examined Willard & Kelsey Solar Group, a Perrysburg solar company that has faced financial troubles. The state has agreed to pay GBQ up to $100,000 for the two investigations.
The reports for both those companies have been oral, and the air authority has not commissioned a written report at this time.
Buckeye Silicon, which was expected to begin making principal payments of $25,163 in May, only has made partial payments since that time.
The air authority's board is trying to determine when the firm was required to pay its loan back, which is an essential part of determining when interest-only payments end and principal payments begin.
"We are [in the] process of contacting and working with the attorney general's office in order to clarify issues related to the loan agreement between the company and the authority," Todd Nein, interim executive director of the air authority, wrote in an email to The Blade. "Specifically, when the clock started ticking on the repayment on the principal of the loan, the company had an unexpected delay of delivery of the equipment, which was not delivered for a year after the loan was signed.
"This is directly affecting the repayment schedule."
The state attorney general's office declined to comment on the matter because it would relate to a specific inquiry, but did say it acts as legal counsel for all state agencies.
Buckeye Silicon produces polycrystalline silicon and got its start at the University of Toledo's alternative energy incubator in 2009. The company is owned by Sphere Renewable Energy Corp. of Las Vegas and is on Ryder Road off Nebraska Avenue in South Toledo.
Buckeye Silicon took care of the delinquent payments once it was informed about them, said Mark Erickson, a manager at Buckeye Silicon. Mr. Erickson would not comment on why the payments were missed.
"The important thing is once it came to our attention, we caught up with our payments," he said. "We are current now."
Mr. Erickson said Buckeye Silicon wouldn't have a problem covering the full principal payments of $25,163. The company is in production and its machinery is operational, he said.
In addition to the air authority financing, Buckeye Silicon also received a $1.3 million loan and was approved for a $239,000 grant from the Ohio Department of Development. It only received $4,867 of that grant because it did not create the 75 jobs called for in the grant contract.
Mr. Erickson said 75 jobs was a projection and the company is working to overcome the difficulties faced by the solar industry.
Buckeye Silicon employs four people -- its loan contract with the state Department of Development calls for the creation of nine jobs total -- and has made good on its loan payments to the department.
The contract between Buckeye Silicon and the air authority was written by USA Energy Advisors, which handled the loans awarded under the Advanced Energy Job Stimulus Program. USA Energy Advisors also informed the company of its delinquent payments on behalf of the air authority.
The fees for those services are being calculated by the air authority for The Blade.
Even if the air authority hires a second lawyer to review Buckeye Silicon's contract, it will be worth the cost, Mr. Nein said.
"There's always a concern about spending dollars, but it also is something we have to make sure we are doing right, and having this expense is going to be value added," he said of hiring a second lawyer and GBQ.
Contact Kris Turner at: email@example.com or 419-724-6103.