The Ohio Department of Development has given Willard & Kelsey Solar Group until Oct. 26 to repay more than $4 million it owes from a $5 million loan. The decision was revealed Wednesday, the same day on which the department previously demanded full repayment be made.
The Perrysburg solar-panel manufacturer has missed or made partial loan payments since September, 2011, and is in default on its loan. In an Aug. 6 letter, department officials demanded repayment of the loan by Wednesday.
The balance of the March, 2009, loan is $4,135,855, and the decision to extend the payoff date was made by the top department officials.
"The Ohio Department of Development continues to work diligently to ensure the state receives payment on the outstanding loan while remaining business-friendly to the needs of the company," department spokesman Katie Sabatino said in a statement released to The Blade. "Willard & Kelsey officials have laid out a course of action to repay all state loans by Oct. 26, 2012. The state does not risk additional exposure by allowing the company the opportunity to succeed in raising funds.
"If the company is unable to do so, the loan will be referred to the attorney general's office for collection."
Willard & Kelsey has received numerous deferments and reductions of the loan payments. The company received $10.5 million in state funding, of which $5 million was a loan from the Ohio Air Quality Development Authority. Another $500,000 was a grant from the development department.
Willard & Kelsey has facedstaffing, production, and financial issues since 2009, a year after the company was formed.
A Blade investigation revealed the firm's executives were compensated with more than $1.4 million in company funds in Willard & Kelsey's early days, and company credit cards were used to buy airline tickets for family members, luxury furniture, and trips to Detroit Tigers and Pittsburgh Steelers sporting events.
The Blade learned of the executive compensation and credit-card charges when it obtained financial documents and records maintained by the late Bill Mitchell, Willard & Kelsey's former chief executive officer. Mr. Mitchell also alleged the company's executives were paid with loan funds from the Department of Development. If true, the payments would violate the loan agreement.
In previous interviews with The Blade, Willard & Kelsey executives have denied misusing state loan funds. Mr. Mitchell, who was fired from Willard & Kelsey in 2009, died in July, 2011.
Michael Cicak, Willard & Kelsey's chief executive officer and chairman of the company's board, did not return a call or email seeking comment Wednesday. Mossie Muprhy, the firm's vice president of development, said the company had no comment.
Ms. Sabatino said the company approached the state department with a plan to convert its debt into equity and said it can repay its state loans by next month. Willard & Kelsey, which had reverted from a production phase to a research-and-development phase, also told the department it plans to become operational, Ms. Sabatino said.
The move to defer the company's payment to October comes after the Ohio Air Quality Development Authority demanded repayment of its loan to the company in an Aug. 24 letter. Willard & Kelsey has been delinquent on loan payments to the air authority since December, 2011, and owes $5.1 million by next Wednesday.
The company is in default on its July, 2010, loan with the authority.
Willard & Kelsey was unable to pay $1 million to the air authority last month, which was part of a deal the authority was willing to strike with the company instead of demanding repayment of the loan in full. The air authority examined the financial viability of Willard & Kelsey with the help ofGBQ Partners LLC, a Columbus accounting firm, before making its decision.
GBQ supported the authority's decision at a Aug. 23 meeting to call the loan due.
Gayle Channing Tenenbaum, chairman of the authority's board, said the Department of Development's decision does not affect the air authority, which plans to proceed with collection of the loan funds. The authority had not been presented with alternative financial information from Willard & Kelsey as of Wednesday, she said.
"At this point, there is nothing that would indicate we are changing our plans," she said.
Contact Kris Turner at: email@example.com or 419-724-6103.
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