State auditors to probe Willard & Kelsey's use of funding

Perrysburg company missed loan payment


The Ohio Department of Development is sending auditors to Willard & Kelsey Solar Group this week to examine the company's finances and use of state funding.

The Perrysburg solar-panel manufacturer failed to make a $109,328 payment this month on a $5 million loan from the department, which prompted state officials to probe Willard & Kelsey's financial practices.

An ongoing investigation by The Blade into Willard & Kelsey's operations revealed last month that top executives paid or lent themselves about $1.4 million in company funds, and the firm's former chief executive officer, William Mitchell, claimed company officials were paid with the state loan funds. If true, the practice would violate the firm's loan agreement with the state. Mr. Mitchell was fired from Willard & Kelsey in 2009 and died in 2011.

No timetable has been set for the audit, said Katie Sabatino, spokesman for the state Department of Development. The purpose of the audit is to gain a better understanding of how Willard & Kelsey spent its money, including the $5 million loan, she said.

Michael Cicak, Willard & Kelsey's chief executive officer and president of the board, and Mossie Murphy, vice president of development, did not return calls or emails seeking comment Monday. Marvin Robon, the firm's Maumee lawyer, also did not reply to emails sent Monday.

State officials attempted to withdraw Willard & Kelsey's loan payment May 10 from a company account using an automatic debit, but the transaction was rejected because the account contained insufficient funds, according to an email from Sandra Bovard, loan operations officer for the department's Office of Strategic Business Investments. The email was obtained through a public records request filed by The Blade.

According to the email, Mr. Murphy told the state Willard & Kelsey changed banks, and that was the reason the account contained insufficient funds. The company was given until Friday to submit its new banking information, and the funds were slated to be withdrawn Monday.

Willard & Kelsey did not submit alternative banking information to the state by the close of business Monday, and the Department of Development was unable to collect its loan payment, Ms. Sabatino said.

The company was making interest-only payments of about $7,673 on the loan, per an agreement reached in fall 2011. Willard & Kelsey's payments were reduced because it was having difficulty paying back the department, Ms. Sabatino said. That agreement ended in April and Willard & Kelsey was expected to make its first full payment this month.

Officials at the Ohio Department of Development are deciding whether to increase the interest on the loan or call it due — two options they have under the company's loan agreement.

"If some adjustments can get a company where it needs to be so it can succeed and create jobs, we will carefully consider that," Ms. Sabatino wrote in an email.

In addition to the $5 million loan from the state, Willard & Kelsey received a $5 million loan from the Ohio Air Quality Development Authority, making recouping the loans a tricky process for the state.

If the state calls the loan due, it would claim its collateral at Willard & Kelsey. When the Ohio Department of Development finalized its loan agreement with the company in March, 2010, it claimed some of the company's solar-panel machinery as its collateral.

The Ohio Air Quality Development Authority also tied collateral on each loan to different pieces of equipment at Willard & Kelsey. If one of the state agencies calls its loan due and pulls its collateral, Willard & Kelsey might not be able to produce a product and repay its other state loan.

The authority also is trying to collect on its loan. The company owes more than $800,000 in missed loan payments.

Willard & Kelsey sent an incomplete, interest-only payment that was three months late to the state in March. The company was supposed to make a full payment of $466,000 in December, 2011. It also failed to make another $466,000 payment March 30.

The missed payments prompted the authority to begin the process of hiring an accounting firm to evaluate Willard & Kelsey.

Ms. Sabatino said missing loan payments is uncommon, and Willard & Kelsey's fate is an ongoing discussion at the department.

"Our goal is always job creation in a fiscally responsible way," she wrote in an email.

The missed loan repayment is the latest problem that Willard & Kelsey has encountered with its state funding.

The company sent in a late and incomplete progress report to the department this month.

The report was meant to assess whether Willard & Kelsey had created the 400 jobs it promised under the Ohio Department of Development loan agreement.

However, Willard & Kelsey laid off most of its work force in January.

Contact Kris Turner at: or 419-724-6103.